Forex Blog (4 сообщения)

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Forex Blog My Forex experience and some Forex related information that might be useful to other traders http://www.earnforex.com/blog рекомендовать друзьям >>

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• Dollar Gains on Better Orders, Housing, Consumer Confidence
  

  The  U. S. dollar rose against the euro after the important statistics came out in U.S. today. Although the daily gain is almost absent, EUR/USD went significantly down from its daily maximum at 1.5753 after the news releases and is now trading near 1.5683 level.

  Durable goods orders rose unexpectedly in June — they gained 0.6% after 0% change in May and negative (-0.3%) forecast for the last month.

  Michigan sentiment index, which measures the consumers confidence, rose significantly in July — from 56.4 to 61.2. It was expected to remain at 56.4 level this month.

  New home sales declined 0.6% in June compared to May’s 533k (annual rate), but the May value was revised up from 512k, so the current 530k is actually a good surprise for the market participants.

  Posted on Forex blog.
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• Trade Assistant — Multi-Timeframe Forex Indicator
  

  Trade Assistant is the second multi-timeframe indicator after TRO MultiPar, which I’ve posted in April. I’ve found this indicator on the forex-tsd.com forums; it was originally created and posted there by Tom Balfe. As with other multi-timeframe indicators it looks very nice and informative with the table output layout of the buy/sell signals. It can be attached to any timeframe chart and it works well with all currency pairs. Trade Assistant will show you the signals for M5, M15, M30, H1, H4 and D1 timeframes. As the base for its signals it uses Stochastic Oscillator, RSI and CCI (Entry and Trend signals). I noticed that when all four indicators show the same signal for the whole timeframe and the neighboring timeframes, it can produce some nice profit. The only problem is that you need to enter positions just right after the signals have switched to a good combination and exit immediately when they have changed. Overall Trade Assistant is one of the most interesting MetaTrader indicators I’ve encountered in months.

  

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• EUR/USD Gains after Decline in Jobs, Home Sales
  

  EUR/USD gained a little today, correcting from the previous daily drawdowns, after the jobless claims and existing home sales statistics was released today in the United States. Dollar was standing at a strong upward position on the Forex market for the last today, but today it reacted sharply on the fundamental data and after a high intraday volatility lost somewhat to euro.

  Initial jobless claims soared from 372k to 406k last week after consensus forecast of 380k; the previous week claims were also revised up from 366k.

  Existing home sales declined in June. They fell 2.6% from 4.99 million to 4.86 million (annual seasonally adjusted rate). The average forecast was a fall to only 4.95 million.

  Posted on Forex blog.
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• Reversing Forex Strategies and Expert Advisors
  

  Many traders encountered strategies and expert advisors that produce highly stable loss as the result of their trading. The majority of those traders at least once considered a possibility of reversing the strategy/EA by switching the buy and sell orders, hoping to reverse the strategy’s results. In almost every case this tactic would fail and the results of the reversed expert advisor would be no better than before. The problem is that not every Forex strategy or expert advisor can be successfully reversed. The Forex strategy should be symmetrical to be reversed right.

  Reversible (or symmetrical) Forex strategy is the strategy where:

  1. Buy and sell orders don’t depend on each other.
  2. Entry points don’t depend on the previous positions’ profits.
  3. Order closing doesn’t depend on price (no stop-loss or take-profit).
  4. The strategy itself shouldn’t endorse only long or only short orders.

  Reversible strategies exit positions depending on the time — usually it’s either a certain amount of the new bars closed or a new signal generated. In theory stop-loss shouldn’t be used at all, but in practice if it’s used only for securing position from the extreme price movements and is rarely triggered it won’t hurt the reversibility (the same can be applied to the take-profit parameter too).

  Example 1. Simple reversible EA — it opens a new position after opening of the new bar, closing the previous position simultaneously. To determine the direction of the position the expert advisor checks the Close-Open difference of the previous bar and if it’s positive it goes long, if negative — goes short. It’s rather stupid strategy but it’s only an example. We won’t take into account the broker’s spread in this example. This EA first went 2 times long and then 3 times short with the results being: +10, -40, +5, +5, -20. The total loss of this expert advisor would be -40 pips. As we see this is a reversible EA (it complies with each of the four conditions for reversibility), so let’s try reversing it. Now we’ll go long on negative Close-Open difference of the previous bar and short on positive. On the same bars as above we’d get: -10, +40, -5, -5, +20. That’s exactly +40 pips — a reversed strategy produced a reversed result (with spread wider than 0 it would be another result, but for the sake of the example spread is ignored here).

  If you back-test or forward-test a reversible strategy and get a negative profit over months, you can turn it to positive simply by reversing this strategy. But unfortunately it’s not that easy. Often the reversible strategies will produce almost zero profit/loss over a long period of time — in this case reversing is useless. There is a strict and quite obvious rule to find out if the reversing would be justified. If the loss in pips for the period is significantly greater than the spread multiplied by the number of trades made for the period, then this strategy is worth reversing; in other cases you’ll still get your margin eaten by the broker’s spread.

  Example 2. The strategy from the first example produced 40 pips loss with 5 trades. If it’s EUR/USD pair which usually has 2 pips spread, then you get only 10 pips (5×2) of loss produced by the spread. So, reversing the strategy in this case will change -40 pips result to +30 pips — definitely a good result.

  Example 3. Consider a reversible strategy that produced 500 pips loss over 6 months of backtesting. The currency pair used in the test was GBP/JPY (7 pips spread) and the number of positions opened and closed during this test was 70. If we reverse this strategy and run the back-test again we’d get only 10 pips profit (500 — 7×70). Such reversing isn’t justified as the gain lies within the normal profit/loss fluctuation range.

  If you try to reverse asymmetrical Forex strategy, most probably, it will produce the same result as before due to its inner mechanics. At least all lossy expert advisors that I’ve back-tested in my MetaTrader 4 tester remained lossy after reversing. That doesn’t mean that everyone should stop developing irreversible strategies and switch to symmetrical. Each of those strategy types has its own advantages and disadvantages. Just learn to distinguish one from another and use it accordingly.

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