Free forex signals

Free forex signals

An idea occurred to me the other day that you may be able to make a profit trading currency by using some of the free forex signals offered.

My approach is slightly different than just relying on a signal company’s prediction though.

I thought that if you could sign up for a few services and only trade the signals that all the services agree on, you may be able to make consistent profits???

Now, I HAVE NOT tested this out but the logic behind it is that if all the signal services you sign up to for alerts suggest the same trade then you trade it because it may carry some extra accuracy weight.

Free Forex Signals System

So for example, service A,B and C all agree that the USD/CAD will rise over the next hour.

You then place your binary bet or spread bet.

If only 2 of the services [let’s say A & C] agree that the price will rise you only place half your normal stake or trade half your normal point size.

Obviously you’d have to find the free forex signals yourself, but there might be an opportunity to be had here.

If you do a Google search for free forex signals you’ll get the idea.

I have never used a signal service, free or paid. Vince Stanzione does indeed offer trades but it is not really a signal service, it’s more of a learn to trade portal. So I’m not going to count that.

For people that are just too unsure or are not confident enough to rely on their own selections, this may be ideal.

It’s been done on Horse Racing

I know that a similar type of thing has been done with horse racing.

It was something like, If 6 tipsters all recommend backing the same selection then it’s so many points that you bet, or you back a place for a given runner if 3 or more tipsters fancy a horse with win odds of 4/1 minimum.

As said, you’ll have to develop this idea on but it may carry some weight with some trial and error.

Learn to Trade Price Action

Learn to trade price action

One of the simplest and most effective ways to start trading is to learn to trade price action.

Price action Trading or PAT relies solely on the actual price of any given market. There are no indicators on your charts. Not even simple moving averages.

Instead of using any such indicators, you will speculate price movement by the current and recent price, occasionally trend lines and simple candle stick formations.

We don’t use technical indicators when trading price action because any indication of price movement using these indicators relies on past prices.

As we are only concerned with the actual current price and direction when trading price action, these indicators become redundant.

The actual price movement itself is all we will be relying on. The price doesn’t lie.

You can easily use the free charts on yahoo to trade price action, they are more than adequate for this type of trading.

If you traded the price action and managed to achieve a 50% strike rate you could safely assume that you could make consistent profits.

Also, by placing a stop at 100 points and only take a profit at 200 points and above means that you are taking odds of 2/1 in your favour every time you trade.

So using the above statistics conservatively, you place 100 bets and 50 lose, but you win 2 x more than you can lose with your other 50 winning bets. The edge and the odds are in your favour, giving you have a positive returns.

How to trade the price action

As said, PAT is very easy to do, there is nothing complicated about trading the price action. Here’s a good example of how simple and effective this strategy can be.

Looking at this chart of the GBP/JPY we can see that the recent trend is down. We can also see that the price has been making higher highs over the recent shorter term.

You can also see that the very last candle has rebounded from the resistance line and formed an inverted hammer candle.

If I were trading on this information I’d expect the price to move down from this recent resistance and resume its downward trend.

 

 

learn to trade

 

As you can see from this next chart this is what happened.

Price action trading

These charts all have a similar pattern and price action movement after reaching support or resistance lines and forming certain candle patterns.

Spinning top

 

Learn to trade price action

Now even though I was correct at predicting this price movement, another trader that sees the exact same chart may take a completely different view of direction. This trader may have decided that the price was going to rebound.

It is important that when you are trading price action that you rely on your judgment and blank out other opinions.

Price action trading can also be used on falling prices just as effectively.

Candle Patterns

You can trade price action charts by trading candle set up patterns very easily. There are many candle formations that people use, but the ones I have found to be most reliable are these.

bull morning star bull abandond bull engulf bull hammer

These candle formations often spell a reverse of direction and can be very useful when trading our 4 hour candles. I find the doji and the hammer are awesome chart signals.

So far…

a, we have higher highs or lower lows

b, we have support or resistance from our drawn lines

c, we have a certain candle formation formed

d, we have identified trend direction

Other Price Action Factors

There are some other useful factors to consider in depth when trading price action.

Time frame of trading

I have found the minimum time frame on the charts that creates the most reliable consistency is the 4 hour charts.

The lower the time frame the higher the chance of random results [losing the edge]

If you are using fixed odds to trade then you will use the higher/lower bet and trade in 4hr increments. So 4,8,12. I find I am using 8 hours more than others.

The thing is, with fixed odds higher/lower bets you are right or wrong. There is no middle ground. So the longer the time frame you use the more chance you have for a result.

Once you are wrong you are wrong. But if things are going really slow and the price is moving sideways you have more time for things to move in your favour. Thats why it’s better to use longer time frame candles like 4 hour. You have a greater chance or a better edge.

Imagine it like this

The ten minute candle is very thin in width; the 4 hour candle is much thicker.

All of a sudden someone decide to put a ton of gold on the thin 10 minute candle. The candle just can’t handle the weight and it crumbles and gets pushed away.

Now this same someone puts another ton of gold on the 4 hour candle. But because the candle is so much thicker it doesn’t crumble away to nothing. It may move very slightly but it stays stable.

This is essentially what is happening to the candles on your charts.

The smaller the time frame the less buying or selling [weight] the candles can withstand, hence faster and more erratic price movements.

Become an Expert                  

Far too often, new traders try to trade all different pairs, indices, stocks. DON’T. Slow down and stick to trading the same few.

You will over the years become an expert at looking at that one particular pair for example.

Some charts that I look at and I’m trading you can read like a book. you just get a feel for them. Like you find yourself saying “yes the price does that, it’s OK, I’ve seen it before”.

You know what to expect and this one element of trading can make all the difference to your success.

In fact since I started developing a day trading system I have concentrated on a single currency pair to trade. The results improved.

It’s boring

You might be thinking that it’s going to be a boring old journey trading just the one chart for the next 10 years and beyond. Well that’s trading, it’s boring. If you want excitement go play roulette.

You will have the chance to trade other opportunities, of course. But understand that it’s better to become a master price action trader using one stock, currency pair or indices and make money consistently over time than it is to trade anything that moves and make far less… and more importantly learn to trade far slower.

Some things are easier to trade.

currency pairs volatility

Some currency pairs, stock and indices are actually easier to trade than others.

Here are the easiest currency pairs to trade listed by daily range in ticks.

You can also try trading the DAX as this can regularly through up some great trading opportunities.

Also, if you do your homework you’ll find certain stocks perform really well for price action trading.

Paddy Power is a great place to start.

 

Slight edge and time

If you have been reading the blog for any amount of time you’ll know that I preach to you about how slowly overtime is the best way to make profit’s. It is again the same with price action trading. Trade once a day with a slight edge in your favour, compound your profits and over time you will increase your wealth.

You can read one of the most repetitive books ever written here. OK i may be having a dig at the style of the book, it is very repetitive, but I seriously remembered the lessons taught. So much so that it is on that fact alone that the book is worth it’s weight.

Stop losses and Setting target profits

As mentioned briefly at the beginning of this post, with this type of trading you will benefit from setting targets and stop losses.

If your target profit is 200 ticks then your stop loss should be a maximum of 100 ticks.

Using the above criteria you are firmly dictating that the odds on any trade will always be 2/1 in your favour. This essential also reduces the strike rate needed to be profitable.

You will often find however that your stop loss will be far less than 100 ticks.

If you look at this gold chart you can see that the stop loss can be set at the resistance line at the very end of the current movement 1256.6 [around 45 ticks] as your entry is around 1261 even though your upside is a potential 200 ticks. That’s a great edge.

The reason that you use a profit target trading the price action is that it makes it [price action trading] completely mechanical. You are not going to let profits run here. You have no need to panic over where to take profits if the price starts to move back against you.

You have set rules and these are in place to try and make trading more profitable and less emotional over time.

Gold price action

Where to trade? Spread bet or Binary

You can trade the price action by spreadbetting the position and setting stops and targets as explained above, or you can place simple fixed odds bets on a daily/weekly basis.

Each have there own pros and cons, simplicity is fixed odds and greater profits [at least in the beginning] is spread betting.

How often can you trade?

You are not going to trade everyday. That’s all there is to it whilst you are starting out and trading a single currency for example.

You have to be patient and wait for the signals and entry points. Or else you’re just plain gambling.

The opportunity to trade is not going to be clear every day. Even though the opportunity to trade is there every day. When in any doubt as to what way you think the market is going to go, leave it out for the day. Only trade when you are sure. Don’t look for what isn’t there.

 

So in summary

  • Identify the current trend direction.
  • Look for the price approaching a support or resistance level
  • Identify a candle formation at the level
  • Trade the rebound or…
  • Trade the price breakouts
  • Set stop loss
  • Set take profits
  • Rinse repeat

 

7 Trading Blogs I Always Read

 Trading Blogs
I’m often asked if I follow any other traders online… of course I do. Although there is only so much anyone can absorb and read on a weekly basis.
When I first started trading I used to try and read everything and anything from so many different trading blogs… anything to gain an edge and a bit more knowledge. Now there are only a few I follow on a regular basis.
You should find at least a couple here that you will be able to take something from. 

The Trading Blogs I Always Read

Bullbearings 

I like to stay tuned into this because it predominantly UK contributors, written in plain english it is a breath of clean air. I do not take trading advice from any of the writers on the site [other than Vince] I use the the site to keep my eye on the overall picture and stay current.
Sometimes a headline is all you need to read and I like to do that.
You can also use it for a bit of research.

The Naked Trader 

I like this site, I like Robbie Burns. 
You can get some good trading ideas from Robbie and a brief insight into why he has chosen a stock or opened a spread bet. 
You can also research anything that Robbie is trading and do your own evaluation of his positions.
It’s good practice for newbie traders.
I personally like Robbies style of writing as it’s light hearted and often amusing. 

Stock traders Almanac 

I’ve mentioned the stock traders almanac numerous times on the blog. This is one blog that you must read and also one book that every trader must have a copy of. 
The almanac has many statistically sound and proven systems and opportunities that you can incorporate into your trading. 
I also like the way that it is a family business that has been handed down.
I met and spoke with Jeff Hirsch at one of Vince Stanziones seminars. He’s a nice guy and is also very genuine. 
The Stock Traders Almanac is a must.

Morpheus Trading 

I haven’t been reading this blog as long as the others I have mentioned, but it’s a great blog about trading price action and swings.
The blog posts are interesting and informative
There is a little bit to much marketing on the site for me, but that may be something that appeals to you if you decide on this shorter term style of trading.
You can sign up for the alert service and it comes with 30 days free. I have not tried anything that is paid for on the site but the trading strategy is sound.
Also, if you are unsure or even intrigued by trading ETF’s then this is a good place to start your research.

Trading Sim

A thorough day trading blog that i flick back to now and again to see what they are up to. I like the way that they try to explain their chart reading and go to great levels to make sure that nothing is missed.
Again, not everything is free but what is free you’ll be able to take a lot from. 
I like reading the posts from Alton Hill. He seems genuine and has a passion to teach that comes through clearly.
Since starting my day trading system search and development I have used some of the ideas and theories to aid my own research.

Mellon on the Markets 

Not essentially his own blog but you can also follow him on https://twitter.com/jimmhk jim mellon has an estimated wealth of over 850 million and is often referred to as the UK’s Warren Buffet.
His ideas and visions are well worth staying up to date with. He is focused on the developing world and the opportunities that may present themselves.
Good stuff.
And last but certainly not least.
I’m a subscriber to Vince’s premium service so read those blog posts, but his main blog is great for the newbie traders. Not full of a million and one strategies to choose and try, but more focused on trading opportunities and a traders mind set. 
Quick tips and videos that can help you understand trading at your own pace.

A slight edge in financial trading systems

 

If you are looking to trade the markets over the longer term [1-3 months +] then the edge you need for your financial trading systems to be successful will be far less than if you were to trade a shorter time frame.

So what is the edge? The edge can be defined as any factor that you can apply to your trading strategy that will help you gain profits over any time frame that you are trading.

A slight edge in financial trading systems

At first glance, these long term charts supplies most of the information you need to place a trade with higher expected win rate than that of losing.

We are simply going to buy the positions in the expectancy of the price rising.

Financial trading systems

 

 

Trading apple stock

 

In fact if we look at these charts in the final quarter of the year it will be interesting to see what the profit and loss is by simply trading above and below the 200 day SMA?

Now if we look at some 1 minute forex charts that are popular with day traders we can see that it will require a much greater edge if available to make accurate decisions.

1 minute trading system

All the above price movement occurred in less than an hour. I have tried trading these time frames and it is madness.

To give us an idea of direction we will probably need to use far more indicators and our speculation needs to be analysed in far greater depth.

I feel that this type of trading [or at least to me] seems to be more like guesswork.

Even if you think that you may have an edge likelihood is that there isn’t one. With so many underlying variables trading 1-5 minute charts seems random.

Furthermore, even if there was an edge I think that the speed that the markets move creates further problems, especially if you are spread betting.

[Using binary will be your best option here as you can place the bet and leave it alone].

Panic Trading

With spread betting though and using these time frames the psychological demons of trading are queuing up to have their say.

Shall I close, add more, wait, exit, oh no 3 ticks in the wrong direction this is a disaster… close out for 5 ticks loss after your spread and the price goes back in the right direction. You enter again and pay another 2 points spread.

This is a good example of what a new day trader goes through.

It’s the quick fire decisions that hammer new day traders.

They panic and get it all wrong under pressure. Even though they may know what the correct action to take is. They don’t do it.

“Always sell what shows you a loss and keep what shows you a profit. That was so obviously the wise thing to do and was so well known to me that even now I marvel at myself for doing the reverse.”

Jesse Livermore

 

Trading Under Pressure

Financial trading quizImagine that you are taking a general knowledge quiz. And your specialist subject is dogs. Each question is asked every 1 minute.

You have time to think about the answer and the likelihood of you getting the answer right increases.

You are asking your subconscious if the answer is stored there in your brain, if you know it the answer is given.

If you don’t know the answer you may even be able to make an informed guess. Almost like using chart indicators for your brain.

Many of the questions you get correct because you have time on your side.

Now imagine the same sets of questions are being asked. But now you only have 5 seconds to get the correct answer.

This is a totally different prospect. It’s unlikely you will get as many or anywhere near as many correct answers.

You may well know the answers but under stress you just can’t give the right answer quick enough

This is much like how day trading and longer term trading results differ. The results are in direct correlation to the time that you have to make informed decisions against ill informed decisions under stress.  At least that’s my theory.

It’s simple that the longer your day trade is the more successful you will become. Trading 1 minute charts is difficult trading 4 hour charts is much easier.

I’ve proved countless times that it’s far easier to trade the long term, that’s why I recommend Vince’s style of trading.

That said, I am starting to see options trading the shorter term, although nothing using charts under an hour really.

My day trading research

As you know trying to find a winning day trading strategy is taking a lot of my time up at the moment; I’m happy that it is and I’m enjoying the challenge greatly. But there is only so much that I can do.

Little Acorns

So for the next few months I will not be placing any little acorns bets.

It’s purely because I need to be totally focused and little acorns is something that I’m using very little cash on and reward ratio is lower to my other current interests.

I will most certainly be keeping an eye on the results though [via some of the racing blogs] and will get back to it soon.

If you are using it, keep going, it really works even at level stakes.

I have noticed a few ways that might increase strike rate but it means studying the form in detail. And this adds to selection time. I will do a separate post on this soon.

Charting packages

I’m also testing out some new charting packages that are cheaper than sharescope. I thought it may be beneficial to new traders to have some other good chart options that will not cost them £50 a month.

I’ll keep you updated on my findings. At the moment I’m trying TradingView, it’s around 29 euros a month for live prices and it seems OK. Another I’m trying is Prorealtime. You can get a free trial for both and pro real time is free if you have an IG account.

 

A week after Brexit

Life after Brexit

Life goes on after Brexit.

What a week after Brexit… not that the Brexit had anything to do with what I was doing. It just shows you how quick everyone adjusts and moves on. Be honest, how often did you think about it this last week? Nowhere near as much as before the vote I bet.

Anyhows, I have just had so much on as well having home improvements on-going. Sometimes it’s Friday before I know it.

Euro 2016

Well what happened to the England team? That was the worst display I can remember from an English national team. In all honesty though, I do blame the manager.

He was never a success in the premier league so how on earth could he possibly carry the England team forward? Why did we choose him?

Anyway, I’m glad Hodgson has gone, he didn’t have a clue and was sooooooo boring.

Personally I think we need a younger manager with far more attitude. Let’s see who’s in line?

I am still chipping away at trying to find a day trading system that will work. It’s seriously hard work though.

More often than not I’m finding that many of the trades that I identify are far more profitable leaving them up to a week and more.

So what starts out as a day trade winds up not one unless you are trading the dailies of course. Then you start again the next day and pay another spread. I’ll get there though.

The Markets

The markets seem to be steadying but I’m not sure about anything long term at the moment. I’ll stay with Silver for now and another that Vince recommended.

Vince Stanzione has made some other really good calls that I wish I had traded. That’s how it goes though; you’re never in on all the winners. There will be more opportunities soon enough.

He [Vince] did a good video recently that highlights some common questions that are raised about technical analysis and random outcomes.

Well worth a watch as you may understand why it has been so difficult to produce a short term system.

Other online opportunities

I’ve recently started selling more products online.

I say started selling but should really say listed some more items on Amazon. If you don’t know anything about selling on Amazon, I’m using their FBA service. I think it is going to be huge. You can read about it here.

You might remember, years ago I started selling on eBay. I turned a £100 start up into over £30,000 turnover in just over a year.

Well I’m going to do something similar on Amazon but they [Amazon] do everything for you, like taking payments, shipping and customer service.

This means that if I can source a winning product I will have far more time to look for other products and build on this.

One of the main reasons I stopped selling on eBay was because of having to deal with the customers. Some are just so horrendous. They treat you like dirt.

By using Amazon FBA I’ll avoid all of this.