Trader Insights

One of the most frustrating things about constructing a trading system can be the absolute freedom to use whatever indicators and values you like. While this can initially sound positive, the virtually limitless combinations of variables can become quite overwhelming. For example, if you like the concept of the SPY 10/100 SMA Long Only System…

Repainting indicators are one of the most common problems facing would-be EA designers. Sometimes it seems like an indicator has its thumb on the market. It perfectly predicts when the market will go up or down. So making an EA run off of the indicator is a no-brainer. If this sounds familiar, you need to…

Day trading is challenging. Don’t let anyone tell you otherwise. The odds are stacked against you, and the risk of loss lurks at every turn. That’s why it’s important to understand the ground rules of day trading. Start with your Range One of the most common mistakes with day trading is failing to identify the…

A Martingale forex strategy offers a risky way for traders to bet that long-term statistics will revert to their means. Forex traders use Martingale cost-averaging strategies to average down in losing trades. These strategies are risky and there are no long-run benefits. But with no long-term benefits, why do traders make use of this system?…

Much research has gone into pinpointing the causes of mechanical trading systems failures, especially after the fact. Although it may seem oxymoronic (or, to some traders, simply moronic), the main reason why these trading systems fail is because they rely too much on the hands-free, fire-and-forget nature of mechanical trading. Algorithms themselves lack the objective…

Stochastic oscillators can be a valuable tool for mechanical forex traders. However, traders often make the mistake of using stochastics together with numerous unrelated indicators with questionable results. Like some other traders, I’ve found that using a single stochastic oscillator usually doesn’t produce consistent winners. The good news is that a dual stochastic forex trading…

What can we say about trend lines? Is there any trader in the world that hasn’t used them? I seriously doubt it. We’ve been told time and again, “Trust the trend line. The trend line is our friend.” The visual appeal of a trend line is just irresistible. We all enjoy the confidence felt when…

One of my greatest trades came out of trading a news event. I sold USD/JPY several years ago when it traded at 118.75. I knew there was an important G7 meeting over the weekend, so I placed an anticipatory sell stop expecting a volatile weekend session. Over the next several weeks, the yen gained on…

When trading in FX, trying to find the perfect currency pair can be time-consuming. Of course, you’re looking for the pair on the verge of producing the next lucrative trade. Many times it’s hard to decide which pair is the one with the most momentum. And even if you do invest all your time homing…

Candlestick charts can provide an abundance of information to the trader. However, an oftentimes overlooked aspect of these charts is the trading information provided by longer wicked candles – especially when it comes to stop placement. This is an opportunity particularly overlooked by newer traders who tend to decide where to place their stop based…