One of the strongest signals in trading is convergence-divergence. Many traders call convergence “bearish convergence”, and divergence – “bullish divergence”.

Convergence arises, when a straight line, drawn through two local minima on the oscillator (from left to right - the first one below the second one), and a straight line, drawn through two local minima on the chart (from left to right - the first one above the second one) converge.

Divergence arises, when a straight line, drawn through two local maxima on the oscillator (from left to right - the first one above the second one), and a straight line, drawn through two local maxima on the chart (from left to right - the first one below the second one) diverge.
    
In our opinion, the most effective method is detection of divergence between fractals and oscillator (Stochastic, Macd, RSI, Momentum, Power RVI etc.) – “fractal divergence”.

Many principles of the financial market originate in basic principles of mathematical analysis. The fractal theory in mathematics is based on the fact that phenomena, which surround us, often consist of the self-repeating things – a lift, a tree, a coastal line; all these things are vivid examples of fractal figures. A fractal in mathematics is an infinite geometrical figure, each fragment of which is repeated at scale reduction.

VIDEO - Fractal divergence explanation (MetaTrader 4 Indicator STO-Div)




Fractals – one of five indicators of Bill Williams’ trading system, allowing to find out a trough or a peak of the price chart. An up fractal is technically described as a series of at least five consecutive bars, in which two bars with lower maxima are situated directly before the highest maximum and right after it. The opposite configuration (a series of five bars, in which two bars with higher minima are situated directly before the lowest minimum and right after it) corresponds to a down fractal.






Fractal divergence between Fractals and Stochastic Oscillator (MetaTrader 4 Indicator STO-Div)

Metatrader indicator Sto-DIV shows fractal divergence by Stochastic indicator . When divergence arises between Stochastic indicator and the price it means forthcoming end of current trend. The signal to buy comes when new Low-fractal is below the previous one, and corresponding Stochastic meaning is above the previous one The signal to sell comes when new Up-fractal is above the previous one and the corresponding Stochastic meaning is below the previous one.


Fractal divergence between Fractals and Stochastic MACD (MetaTrader 4 Indicator MACD-Div)
Metatrader indicator MACD-Div indicates fractal divergence by MACD indicator.When divergence appears between MACD and the price, it indicates a high probability that the current trend will finish soon. A signal to buy is when a new Low-fractal is formed below the previous one and a corresponding MACD value is higher than the previous one. A signal to sell is when a new Up-fractal is formed above the previous one and a corresponding MACD value is lower than the previous value. The indicator has a lot of customizable settings.



STO-Div Indicator Parameters:

int Width.Min = 1;	Minimal width of model, bar
int Width.Max = 25;	Maximal width of model, bar
int Height.Min = 15;	Minimal height of model, pips
int Height.Max = 1000;	Maximal height of model, pips
int KPeriod = 21;	Period (bars quantity) for %K calculation
int DPeriod = 12;	Period (bars quantity) for %D calculation
int Slowing = 5;	slowing
int MaxBars = 1000;	Max bar restriction
int Shift.Arrow = 40	arrow shift , pips
int Shift.Dot = 20;	point shift , pips
int Shift.Line = 0;	line shift, pips

We can add extra alerts for our Indicators: pop up alert, e-mail alert and sound.




Best regards,
BJF Trading Group

        

The forex market is clearly one of the most liquid markets of all. By far, this is quite the largest economic market in the world. It is only appropriate that before you plunge into this business, you should have only the best techniques up in your sleeve. There are Metatrader expert advisors available that will help a trader in his quest to success. As long as the trader himself does his homework and selects the best Metatrader, there is a great chance that he will flourish in the business.

Traders, particularly the beginners can seek the assistance of a good Metatrader indicator so that they can be an accomplished trader like the ones who have thrived in this economy. Online forex trading is a complicated world yet many are still venturing here because they believe they will be able to achieve great profits in return. A forex Metatrader expert advisor uses a methodical trading system that will just about eliminate several risks in the business and at the same time, it offers a way for traders to have a steady leverage for the trading process. An expert advisor or EA plays a vital role in the achievement of one’s goals, which is why it is only right that you choose from the various selections available. Bear in mind that whenever there is money, there will always be scammers and self-proclaimed great systems around.

 
Most Metatrader expert advisors are free of charge so take this opportunity to examine which of them works best for you. With the top Metatrader indicator, you will be able to study securities’ quotes while its network allows you to develop and use the automated strategies in trading. These kinds of programs provide brokerage services and an EA that does the trading for you. Typically, there are a lot of traders in the world who lose their money because they do not know how to properly manage their money. They are probably not aware of the general rule in forex trading which is to grab the profits quickly and then cut the losses immediately. Unfortunately, this will really be difficult because of the natural traits of humans.

 
Therefore the traders should be able to take profit consistently no matter how much it is. In addition, you should steadily look for those currency pairs that will give you a winning trade. All that and more can be done if you have make use of a Metatrader indicator. At iticsoftware.com/, there are a number of Metatrader expert advisors that you may want to try.

Regards,

Boris

        

Appearance of important macroeconomic indicators, as a rule, causes high volatility in the currency market; in turn, there is a temptation to trade in a period of appearance of news. Classical literature on the fundamental analysis recommends to avoid trading in the period of publication of significant data, as it is a high risk-bearing trade. In our opinion, a well thought-out approach to trade on news can provide you with a number of good transactions in a month.
    In this article we will consider technical aspects of trade on fundamental news. It is necessary to make a reservation that you should learn theoretical foundations of fundamental data analysis before applying technical tactics of trade on news.
    Before starting consideration of separate strategies, we will allocate a number of general principles which we should follow at opening of positions on news:
- opening of position should not be done manually straight after appearance of news, but by means of pending orders set up in advance;
- it is obligatory to set up “small” stop loss at 10-20 pips;
- the profit is also should not be fixed manually, but by means of pending order – take profit, or by means of trailing stop;
- it is better to be at the terminal and to watch further developments of events at the moment of appearance of news;
- When choosing data for trading, you should give preference to news, which will lead to strong movement in the market with high probability.

Let's explain, why we recommend to work exclusively on pending orders in the period of appearance of news.
The first reason. As we mentioned before, the appearance of news causes splash of volatility in the currency market. In this case, you simply will not have time to join the movement in time. No trader has reaction as quick as lightning. The market will be faster in any case.
    The second reason is actually the other interpretation of the first one. A broker receives different prices from several largest banks, and then selects the closest variant to the price requested by the client. And the broker executes requests in the following sequence: 1) stop loss; 2) take profit; 3) other pending orders; 4) transactions "on demand", i.e. entry into the market "manually". Thereby, after the broker executes all pending orders, the price of entry into the market, offered to you, can be much worse than the quotation, requested by you. Pending order guarantees that the transaction will be opened exactly at that price, which you used to set up the order.
    We’ve also emphasized above that at transactions on news the size of stop loss should be minimal. This results from the fact that after appearance of news the price moves quickly and in one direction. Moreover, 10-15 pips stop loss will provide quite favorable risk/profitableness ratio for the transaction.
    Now let’s examine the principle of setting up take profit. Here we should take into account the average swing of price movement on one or another news. Trace on history the average number of pips that the currency pair, chosen by you, passes on economic indicator data. When take profit is set up, you should also take into account significant support/resistance levels.

News Trading Strategy 1

 

This strategy includes setting up two pending orders in opposite directions – buy stop and sell stop. It would be better to plan the transaction on trade on news in advance; however we recommend to set up pending orders several minutes (!) before appearance of news. All pending orders, which were set up earlier and are not the part of strategy of trade on news, should be removed on the threshold of publication of significant data.

    Then a question arises: on what distance from active market price should we set up pending orders? We will consider possible variants:

 

1) The simplest way – on equidistant distance of 10-20 pips.

 

2) Taking into account the nearest support and resistance levels. We recommend to use this variant, if the current price has come nearer to strong support/resistance levels.

 

3) The third variant seems to be the most reliable. Often enough the price is traded in a narrow range in day of appearance of significant news, before publication of value of indicator.

If it is really so, i.e. you see clearly formed corridor (volatility is very low in the market before appearance of news), then it really makes sense to open a position on news. In this case pending stop orders should be set up outside the bottom and top borders of the range, formed within day.

    You must set up minimal stop loss and take profit, taking into account volatility, when you use any of these three variants.

Using the strategy 1, it is important to close position in time. If you see, that movement of the price of has exhausted itself, it would be better to close position manually. In any case, trade on news assumes holding of position in the market from 30 minutes up to one hour.

 

Example: “Tragic reverse” on Nonfarm (pic. 1).

 

The data on the employment market in the USA for November, 2006, were published on Friday, December, 12th, 2006. Level of unemployment unexpectedly rose from 4.4 % to 4.5%. Such data had to bring pressure to bear upon dollar, and that happened. EUR/USD exchange rate rose approximately on 80 points within an hour after publication of data. According to the principles of trade on news, which we considered above, the transaction on news should have been closed after an hour from the moment of publication of news. If you didn’t do it, you would be overtaken by the strongest reverse: almost one and a half pattern. Certainly, such reverses are quite rare phenomenon, which is almost impossible to predict. However accurate following the rules of trade on news would help you to keep profit and to avoid loss.

 

Friday 08.12.2006

 

 

Picture 1. EUR/USD, М30 (each candle каждая was formed for 30 minutes)

 

 

News Trading Strategy 2

 

    This strategy includes opening of position in one way – in the most probable direction of price movement from the point of view of tools of technical analysis. Here trends are used quite actively. So, for example, opening of position in the direction of day charts movement is possible.

    The position can be opened several minutes before publication of news, having set up minimal stop loss and take profit, taking into account volatility.

    You can set up pending order as an alternative variant, but only in one direction. Requirements on setting up stop loss and take profit remain invariable.

 

Retracement

 

We recommend the following: avoid trade on retracements. If you missed the main movement at publication of data, it would be better to refrain from trade on news at all.

Conclusion

 

Trading on news can give you some good transactions every month and, thereby, to increase the set of tools in your trading strategy. Transactions on news are attractive because of quite high potential of profit and minimal risk.

Metatrader Expert Advisor "News Trader"

This adviser trading principal is based on economic news and is a very useful tool in the portfolio of every trader.  In a given time, several minutes in advance of the news issue NEWSTrader places two different orders. There is a special mode within the adviser which allows to delete one pending order in case if another pending order was made. Several intervals are possible.

The following type of orders can be used:

MarketOrders = false; //open buy and sell market ordrers true/false
StopOrders = true; //open buystop and sellstop pending ordrers true/false
LimitOrders = false; //open buylimit and selllimit pending ordrers true/false

OCO = true; //One-Cancel-Other mode for pending orders

extern int Dist = 50; //distance from the market price to set pending orders  

There is also trailing stop added.

The advise can work both on five-digits and four-digits quotations.

extern bool Acc5Digits = false; //set true if your broker provides 5 digits for EURUSD

Read more about MT4 expert advisor NewsTrader

Post your questions about about Fundamental News Trading and MT4 Expert Advisor "NewsTrading" on our   MT4 Forum

Regards,

BJF Trading Group

        

Neural MT4 EA Introduction

We are glad to bring to your attention new Neural Network Tools. This tool is based on the neuroX library. It is possible to realize neural network1 of practically any topology on the basis of this library. What are the advantages of Metatrader Expert Advisors, based on neural networks, over usual Metatrader Expert Advisors?
    Usual mt4 EA are programmed on the basis of the algorithm, which is based on certain trading strategy. Metatrader EA, which are based on neural networks, are not programmed in the full sense of this word: they are trained. Possibility of training is one of the main advantages of neural advisors over usual advisors. Training is a finding of links between neurons. In the course of training such Metatrader Expert Advisor is capable to reveal difficult dependences, and also to execute generalizations, and in case of successful training Expert Advisor can find true result on the basis of data, which were absent in the training sample.
    If neural metatrader EA is trained correctly, it can predict future behavior of price on the basis of several previous values (patterns2) or on the basis of factors existing at the present moment.
Such Metatrader Expert Advisor is capable to allocate and generalize latent dependences; usual ЕА is incapable of doing it.
    Accurate prediction is possible only when the previous changes somehow really predetermine the future. Therefore it is necessary to note that the neural network should be retrained after a certain operating period for more exact prediction.
    Use of Kohonen maps3 in the network allows to examine the sample (price or other additional data) for many times. Each examination of sample is called “a training epoch”. Initial data (historical data, quotations) are divided into two parts during training: the training sample and the testing sample (as a matter of fact, the testing sample replaces forward test for such Metatrader Expert Advisor).
    So, all our Neural Metatrader Expert Advisors consist or will consist of two basic nodes: neural net, organized by means of NeuralX.dll, and the advisor, which forms a signal for training.

Important! The trained network is saved in the directory Metatrader\tester\files\ and has the filename extension .nnb

    All buyers of advisors, based on NeuroX.dll, can exchange the trained networks and discuss the work of advisors on our forum 24fx.us. We will also train and publish networks on the forum as far as possible.

MT4 NeuroX.dll Description of parameters (This information is given for the developers.)

There are several components in the neuroX.dll library for MetaTrader4, which are created in MQL4 language and used for realization of expert systems of analysis and prediction of the financial market.

The agreement on call of exported functions for scripting programs:

int NewNeuro( int NeuroType ); // Creation of object NeuroID >= 0 or -1 error
int NeuroAgent( string AgentName ); //  Creation of AgentID >= 0 or -1 error
int NeuroLoad( string FileName ); // Creation and load of file NeuroID or -1
string GetProperty( int ObjectID, string Property ); // Reading parameters
bool SetProperty( int ObjectID, string Property, string Value ); // Record
bool NeuroSave( int NeuroID, string FileName ); // Saving data in file
bool NeuroInit( int NeuroID, double& Layers[], int Count ); // Initialization
// Input in network NeuroID data vector Data, OutCnt output и InCnt input
bool NeuroPattern( int NeuroID, double& Data[], int OutCnt, int InCnt );
// Network training using input data | Data, OutCnt output и InCnt input
bool NeuroTrain( int NeuroID, double& Data[], int OutCnt, int InCnt, int Num );
// Calculation in network NeuroID - return in Data, OutCnt outputs on InCnt inputs
bool NeuroCompute( int NeuroID, double& Data

Types of neural components - parameter NeuroType for function NewNeuro()

#define NT_SOM 1 // Self Org.Map Kohhonen.
#define NT_BPR 2 // Back Propagation
#define NT_HOP 3 // Net Hopfild
#define NT_LPF 4 // Low Pass Filter
#define NT_KLF 5 // Kalman Filter
#define NT_GEN 6 // Genetic Algorithm
#define NT_WNN 7 // Wizard Neural Network

Protection of Neural MT4 EA

Sale of advisors with open mql4 code was a policy of our company for several years. Lately we incur losses because of resale of our advisors through fraudulent web sites, exchange of advisors and their use in the championships under other names.

In order to protect our intellectual property we were forced                                                                                                                                                                                                                                                                                                                                                                                                                                                              to protect our advisors by server-based guard. So, you can use the advisor only on one computer, but, at the same time, we do not limit the number of brokers or accounts, i.e. we do not limit the number of metatraders running on one computer (PC, VPS or Dedicated server). For registration of the bought advisor you just need to enter yours e-mail address in a registration window, which opens at the first start of the advisor.

In case of changes of hardware on your computer we will update information about new hardware and re-register you.

MT4 Expert Advisor "NeuralScalpingEA"

Now let’s speak about new NeuralScalping MT4 expert advisor in detail.
The expert advisor consists of the unique scalping expert advisor, which is based on in-depth analysis of the sample by means of overlap of multilayered flat channels that not only gives a chance to identify the price maximum and minimum on a certain time interval, but also allows to estimate the market tendency, i.e. if the market dies away or vice versa. Neural part also analyzes sample in the same time interval and takes a decision to open order or not to open it on the basis of the accumulated knowledge. Options also allow to open order at negative signal of the neural networks, but with changed StopLoss and TakeProfit and smaller lot. It allows to protect the deposit in a better way.

The expert advisor was created for work with currency pairs having low spread, for example, EUR/USD. In order to prevent the pernicious influence of the expert advisor on the market, the number of copies in sale is limited.  MT4 EA NeuralScalping BackTest

1. Artificial neural networks — mathematical models and also their program or hardware realizations, created using principle of organization and functioning of biological neural networks —networks of nerve cells of a living organism. This concept was developed at studying of the processes proceeding in a brain at thinking, and at the attempt to simulate these processes.

2. Patterns – characteristic parts of time charts of prices, which are examined during the technical analysis.

3. Such networks represent the competitive neural network, working on visualization and clustering. It is a method of projecting the multidimensional space in space with lower dimension (two-dimensional); it is also used to solve problems of modeling and prediction.

        

Sphere of neural networks’ financial applications is actually boundless. Any goal concerning manipulation of financial tools, whether it is currency or securities, entails risks and needs to be estimated and predicted thoroughly. How quotations of the basic currencies will change tomorrow? Will outwardly successful company give credit back? How to choose profitable and at the same time reliable “investor’s portfolio”? Analytic departments of financial (and not only financial) companies have to solve all these and hundreds of other problems, using all kinds of analytic instruments. It is no mere chance that financial applications make up quarter of neural networks products market (let’s remind that size of global market of neural networks increases on 40% annually and exceeded 600 million dollars in 1994).

 

Neural networks appeared in Russian market exactly in financial sphere. Fifty neural networks software suites have been sold in Russia for the last quarter, and overwhelming majority (about forty) have been bought for financial use (twenty – for banks). And after such “big shots” as Inkombank, Autobank, and  Eleksbank turned their favorable eyes on neural networks, apparently, that the process of further distribution of neural networks came into self-generation mode (it seems that arguments like “I want the same toy Alexander has” are in common use not only among children). Many companies use neural networks software suites not only for solving concrete tasks, but also for not to be behind competitors in mastering of new weapon.

 

But why are neural networks so attractive? What makes them so good for solving various tasks on prediction and discernment? Not going into details, we can say that currently there are four essentially different approaches for solving tasks of analysis.

 

Firstly, if data are interdependent and their volume is rather small, you can use classic analysis methods (for example, correlation methods). Secondly, you can create an expert system, using rules “if…then”. Thirdly, you can use methods of fuzzy logic (they are in fashion today) and operate with qualitative characteristics, such as “majority”, “reliable”, “some”, etc. And, at last, fourthly, in cases, when input data volume is vast, you have no idea about their interconnections, some part of information is distorted and some part of information is lost, then neural networks will help you. You only have to enumerate factors, which essentially influence the forecasted value, and to find enough examples describing behavior of these values in past. Neural network will “be adjusted” on the given totality of examples by itself, minimizing summary error of prediction. Moreover, analysis of adjusted network allows to find hidden dependences between input and output data, which often remain “behind the scenes”, when using traditional methods. Assuming that character of interconnection between specified parameters won’t essentially change for some time, you can use adjusted and trained neural network for short-term (and sometimes long-term) prediction.

 

“Well, it is not for us…”, - disappointedly says reader, who was nearly fascinated by cold shine of “perfect weapon”. Our financial market is formed solely by ruble rate, and ruble is unpredictable. And also we have mysterious parliament, peculiar taxes, grandiose financial pyramids, extremely simple advertisement, and many other things that make business look like roller coaster “in Russian style”. It is the real truth, but let us give some more precise definitions.

 

Firstly, ruble as well as any other currency (including various coupons, levs, tugriks, etc) can be predicted quite well – we only need high-end computers and one dozen of experts. Game on the world currency market has turned into a war of supercomputers a long time ago. Stories like legend about Soros, whose daring game brought him one billion during one day, gradually become a thing of the past. And when you read in the “Financial Times” that yen “dropped” dollar on two points, it means that yesterday supercomputer of some “Sakura Bank” beat its competitor from “Chase Manhattan” (or vice versa).

 

Secondly, we are not as exceptional as we think we are. Our history saw many events: local conflicts, revolts of interregnum, big scandals around false corporations, etc. Scenarios of their development and influence on financial market are studied well enough. Besides, an entire system of macroeconomic indicators, like Dow-Jones average or S&P 500, has been worked out for many years; they are sui generis “barometers” of current state of market. Many of these parameters have been punctiliously recorded since 1901, and databases of reports for several last months are the object of brisk trade. You might answer that there were no such indicators in Russia. Believe us – they will appear in the nearest future, before you collect dividends from your voucher.

 

At last, thirdly (and it is the most important thing), state of financial market is not determined by one (even dominating) parameter, but the sum total of processes of different nature that have various speed of response. For example, dollar rate can fall down within one hour (it happened more than once), but broker’s expectations, reflected in futures’ quotes for the following month, will change much more slowly. And if you have a tool for assessment of speed of this process (neural networks) and iron nerves, you will have enough time to prepare and play competently and skillfully. Eventually, what is more important for you – to predict “black Tuesdays” or to get stable profit?

 

Let’s study the use of neural network in financial prediction, using concrete example – prediction of currency futures rate. Company that had successfully used neural networks software suite Brain Maker Pro for its internal tasks, decided to try it for prediction of futures quotes on Moscow Commodity Exchange in March, 1995. Futures contract quote on $1000 with June date of payment was chosen as the object of prediction (input parameter of neural network). Input parameters for training of network were changes of futures rates during May, June, and July for the last four trading days (dynamics of the last day was taken into account as a separate parameter, evaluated using special formula), and ruble-to-dollar rate for four days. Training data included forty last trading days (two months). After six and a half thousand steps of training algorithm (it took 3 minutes of calculations) the neural network showed quite adequate reaction on all set of given parameters, i.e. it was trained.

 

Then the neural network was used for ten days for prediction of today’s futures rate for June. The calculations were made when the current dollar rate and the last quote of May futures had become known. As a rule, there was about one hour left till trading on June futures. The result was unexpectedly accurate: the network didn’t once make mistakes in predictions of change tendencies (decline or growth), and deviation of real rate from predicted rate made up no more than 10 rubles in nine cases from ten.

 

Of course, such method can also be used for playing on GKO, for currency dealing, and for many other applications. But the given example is quite typical, because it shows some interesting rules of work with neural networks. Firstly, experience has shown that in spite of simple interface of neural networks they are very delicate and began to obey to their owners only after 2-3 weeks of intensive study and “adaptation”. Secondly, when choosing toolkit, pursuit of low prices does not prove its value. Of course, you can use so called “student” version of neuron network suite for $300, but for new task adjustment you will need high-end professional suite like BrainMaker Pro, OWL or something similar. Thirdly, analytic tools of neuron network suites open new opportunities for study of parameters of tasks, as an adjusted network accumulates in itself hidden regularities of a subject field. For example, in the given example with futures the neuron network suite was also used for analysis of influence of current dollar rate’s fluctuation on futures quotes with delayed date of performance. There was found quite an unusual regularity: on the level +30 rubles for bid there comes a kind of “saturation” of brokers’ expectations, and further growth of rate does not affect futures quotes (generally, it can be explained, however it is quite problematic to find such dependence, using traditional analytic methods).

MetaTrader Expert  " Neuro 1" showed moderate results for more than 4 months real account tests. It is based on simple Artificial Intelligence model and few simple indicators, which feed the network with information. It has small TP to cut profit very fast and the optimization showed that with current parameters of market if he finds the wave he can cut allot! If market conditions doesn't met the profit needs it will sleep. The sleep time also being controlled by Neural Network and you can never say when it get "the good mood" again. Read more>>>

 

And what is about responsibility for decisions making? It is clear that the price for mistake in financial operations is too high! We advice you (following the Americans) to use the following method: if neural network suite shows approach of “black Tuesday”, and, on the contrary, your broker is sure in success – trust broker. If he makes mistake, you won’t lose (because your broker is, probably, quite experienced, and together with him majority of competitors will make mistakes, too) – your neural network suite, which predicted financial collapse correctly, will also predict a winning game strategy. If the neural network makes mistake, you won’t lose, too; you’ll just once more note that computers can’t be trusted. Besides, there are a lot of tasks, where the price of one mistake is not so high, and you have some time to make additional adjustments. For example, Inkombank specialists are seriously thinking over use of neural network suites for selection of the most optimal places for opening of new branch offices. From methodological point of view such approach is safe: undoubtedly, the net will make choice among good variants easier, and knowingly bad variants can be set aside by the expert himself.

 

If to formulate the place of neural networks in arsenal of your financial tools in one phrase, we can say, that the neural network is a prompter for skilful analyst.  Neural network won’t help looser, but good broker can improve his game in many times.

BJF Trading Group

http://iticsoftware.com

        

What is scalping? Scalping is a trading strategy based on taking profit of 2-15 pips. Majority of scalping systems is based on opening of orders from borders of channel during quiet time on market. What is important to take into account when creating scalping trading systems?

 

Spread is a difference between Bid and Ask, i.e. between buying price of currency and selling price of currency. Of course, if we are going to create trading system aimed to bring profit of about 3-5 pips, even 1 pip difference in spread is very significant. Pip price is quite important, that is why the development of systems for pairs like EUR/GBP (pip price is high) is made very often. Quotes are also vitally important. What does it mean? I think it is no secret that many brokers filter (smooth) their quotes. If we compare ticks of global quotes supplier and almost any broker with Metatrader 4 platform, the difference will be obvious. Thereby brokers make functioning of scalping systems almost impossible. Maybe you saw systems added in monitoring on little-known servers; the profit curve of these systems is almost a flat line. Probably, someone even bought such systems and was very disappointed, when such system rapidly spent his deposit. This is the way how small brokers attract clients, demonstrating smooth quotes in demo version. But if you open an account in such “office”, the probability of that you won’t have the same quotes in reality or won’t get your win. Your account will be frozen. Dishonest developers of expert advisors also use this scheme. They monitor their simple advisors on such quotes and sell them to beginners.

 

Advice 1: you should buy only advisors with forward test on Alpari, InterbankFX, and Fxdd servers or servers of other major broker.

 

How to choose quotes. Comparison of quotes is not simple. Our company has developed DDETool metatrader program for this purpose. Using our program you can make a real-time import of quotes from Metatrader program to any program with of DDE server support, for example, to MS Excel. MS Excel resources give you an opportunity to make any analysis of ticks and to choose broker. Some brokers do not allow to earn money using scalping. 

 

DDETool  use example  

  

Install DDETool on  terminal: AlpariUS. These brokers are often recommended as the most appropriate for scalping. Let’s import data of both DDETool in MS Excel. We can make a real-time comparison of quotes (ticks) of several brokers: it is possible to write scripts and to compare quotes using MS Excel or accumulate ticks  and make a comparison.

 

Surely you want to ask why we do not compare minute quotes.  Here is the answerJ. Brokers can correct quotes from history, so only the real-time comparison of ticks gives us a real picture.

  

It is necessary to understand that broker is not on your side, and any trading advices should be considered very carefully. Only having good tools of analysis (metatrader software) and trade (metatrader expert advisors) you can beat broker on his territory.

 

 

 

 

 

 

 

Advice 2: you shouldn’t work with brokers who do not permit to use scalping even using ordinary expert advisors.

 

Accuracy of input in scalping systems is the guarantee of system’s success. I know some well working scalping systems, and their input point is chosen in different ways. For example, input is realized from High and Low in popular Stomper EURGBP metatrader expert advisor, and input is realized from linear regression channel in metatrader expert IntellectualPro and the channel is optimized by many iterations (it improves quality of input).

 

Output also can be realized in different ways:

 

-         Fixed take profit and stop loss (EA Stomper)

-         Take profit and stop loss pulled up along channel borders of linear regression (EA IntelectualPro).

 

Selection of trading terminal for scalping. We can adapt (rewrite) expert advisor from Metatrader 4 trading terminal to any other trading terminal of broker who has API, for example, forex.com or dukascopy.com. We recommend this way for traders with big deposits.

Best regards,

BJF Trading Group

        

Regression in probability theory and mathematical statistics, the average value of the dependence of any value from some other values or from a few variables. In contrast to  functional dependence y = f (x) when the value of each independent variable x corresponds to a certain value have, with regard regression to the same value x can match as the case may be different from values.The general form of each type of regression is:

Linear Regression: Y = a + bX + u
Multiple Regression: Y = a + b1X1 +  b2X2 + B3X3 + ... + BtXt + u

Where:
Y= the variable that we are trying to predict
X= the variable that we are using to predict Y
a= the intercept
b= the slope
u= the regression residual.

In multiple regression the separate variables are differentiated by using subscripted numbers.

Regression takes a group of random variables, thought to be predicting Y, and tries to find a mathematical relationship between them. This relationship is typically in the form of a straight line (linear regression) that best approximates all the individual data points.
            Multiple regression is a mathematical technique used in both technical and fundamental analysis. The technique uses a number of variables to predict some unknown variable.  In technical analysis simple regression of price changes over a period of time can also help identify what has been acceptable in terms of valuation levels and project those acceptable levels into the future.  Different time periods produce different regression results and can help identify potential price projections when the major long term trends of the market change direction.
           
Linear Regression Channel consists of two parallel lines, equidistant up and down from the line of linear regression trend. The distance between frame of the channel and regression line equals to the value of maximum close price deviation from the regression line.


 
Second-power (Parabolic)  Polynomial Regression Channel


 
Third-power  Polynomial Regression Channel



Metatrader Indicator i-Regr


Degree - power of Polynomial:   1- linear; 2- parabolic; 3- Third-power



 
Metatrader Expert Advisor based on Regression Channel Metatrader Indicator
 
If price lower than under line - Buy
If price bigger than upper line  - Sell




TakeProfit by average line.
Stop Loss = 0 but you can set Stop Loss
Trend Protection: If  D1 candle (for previously day)  bigger than 150 pips – trade prohibition and  close all opened position.
 
 
 
Warning: The Expert advisor e-Regr was not adjusted and not optimized. Read more about metatrader expert advisors optimization.
 
I agree to answer a couple of additional questions and get i-Regr metatrader  indicator and e-Regr metatrader expert advisors via e-mail for FREE!
 
Best regards,
BJF Trading Group

 

        

Scalping system Metatrader Expert Advisor  Stomper GBPUSD
Working mechanism:
 -  Determination of the channel limits within 15 minutes time frame (m15)
 -  Orders (opposite to the trend direction) opening occurs after the reaching the channel border with
 -  Totally automated system - no human involvement needed - In case of the internet connection or power breakage the programmed take profit starts from one pip or more.
-   Optimal chose of VPS (Virtual Private Server, Dedicated server)
-   Consists of the several modules which several modules which makes the work more efficient
-   Automated adjustment for different ( total 5), option of manual adjustment if the function is turned off
 
The advisor is being tested on a real Alpari account – which means it works on the filtered quotes. We recommend to choose the broker with 2 pips spread on EURGBP.
We have tested Expert Advisor on different brokers and received excellent results.

Back tests Comparison Table

METATRADER BROKER	EURGBP Spread, pips	Maximal drawdown, %	Expected payoff	Strategy Tester Reports:
Alpari UK (UK, US)  www.alpari.co.uk, www.alpari-us.com,	2	2.89	31.03	Click to view
***FXDD "MT extreme" account (USA) www.fxdd.com	2	5.77	16. 75	Click to view
MIG Invest (Swiss) www.migfx.ch	2	3.41	40.29	Click to view
ATC-FX-Pro (USA) www.atcbrokers.com	2	5.06	10.94	Click to view
Advised Trading Platform (Swiss) www.advisedtrading.com	2	4.83	44.53	Click to view

 
***- FXDD  EURGBP spread only on "MT extreme" account

My chat with FXDD Live Support.
English Support: Welcome to FXDD Live Chat. How may I help you?
Boris: Hi, I would like to open MT extreme account with eurgbp spread 2 pips Is it possible?
English Support: Live or Demo?
Boris: live and demo
English Support: please send us an email request to sales@fxdd.com
Boris: ok thank you
English Support: anytime

Customer testimonial - Expert Advisor "Stomper" trading performance result.

HI everybody,

I have purchased "stomper" expert advisor developed by iticoftware.com and noticed the ration of profitable and nonprofitable deals
(90 to 10 . I work only on eurgbp pair and was attracted by the fact that this software works on eurgbp
I tested adviser on demo accounts within three companies - withdrawal condition - 50% from the deposit, with MM. Later I received a special adjusted version for my broker - Alpari - of course for free. In a month long test I was impressed with the result. Although the withdrawal amount was quite risky taking into account the accuracy of the market entrance I was really impressed with the results.
The company has a very good reputation however I wanted to check my results with the results of the backtest that the company present on it's web.
In a word I am very satisfied with the product and will put on real account. My account Manager - Boris spend more then enough time to satisfy all my
requirements. This is the first company I can really recommend and which I consider to be very professional with a very professional products.
The report are attached:
Alpari UK Trading Performance
ICVEctor Trading Performance
Akmos Trading Performance
 
Our Trading performance

REAL account monitoring:



Demo account monitoring:



We have conducted a research and figured out the ways of risks reducing.  To decrease the risks we have changed some of the settings and prohibited  trading  on Mondays and Fridays - the days when unpredictable movements are possible.

Visit our Third Party MetaTrader expert advisors page for more information

 
Best regards,
BJF Trading Group, iticsoftware.com s

        

The Adaptive Moving Average
 
A dynamic and accurate indicator is such that makes a moving average more receptive to volatility changes.
 
The simplification of the market highs and lows into a more comprehensible trend followed by the even price data, are the true function of Moving Averages. However, the process of getting even data brings in lag: with a longer look-back period of a moving average, the average tracks behind the changes in the direction of price increases. Alike, with a shorter look-back period of a moving average, the response to price changes is quicker but, as the movement of minor prices change directions, a loss can be predictable.
 
The appropriate length of a moving average might not be seen every one, if this week it is showing an appropriate length, the next week’s length might be inappropriate, with the change in the market trend. But there is a potential way of dealing with this issue, use the moving average that can be adjusted with the volatility of the market by broadening the sideways movement of the market and going for a more choppy way of trading, thus making things less responsive, and when the market is seen to be trending, there is a cut that makes the market more responsive.
 
In the book Smarter Trading, by Perry Kaufman (Mcgraw-Hill, 1995), a thorough method of an adaptive moving average calculation has been stated that fits the role. Let us see how it works with the help of an example and also let us make a comparison between this and the Simple moving average or SMA. First, we take the two different look-back periods of two different SMAs. This will be compared and the attributes of each of these will be highlighted. Here, the price that is crossing the moving average is not of primary importance, rather, the identification if the trend is done with the help of the moving average’s direction.


 
Example- 1
 
The figure 1 shows a 30 min bar chart of the USDJPY  pair with the help of five-bar SMA (red) and 30-bar SMA (blue).
 


 
The fig.2 also shows a similar price with an exception of an added adaptive moving average or AMA. The AMA tends to adapt to the volatility of the market and switches to short-term-look-back period when the market is showing an upward or a downward trend and with the sideways movement of the market the changes to a long-term-look-back period.
 
 
From exponential
 
AMA was designed by Kaufman to track the noise and its degree in the following trend. An example, if there is an advancement of the market with small and countered moves, with very less noise you would also want to closely track the moving average that has a shot look-back period.
 
But, the market shows a sideways movement and the closure tends to reverse from a period to the other, then you would like to have a longer look-back period with high noise; this will allow you to filter out the excess noise and also avoid wrong signals. The modification of the EMA is what Kaufman technique is meant to do. An algorithm is given to adjust the smoothing constant or SC of averages per the ratio of the market direction to its volatility.
 
The formula is:
 
EMA= SC* (close-EMA _(-1)) + EMA _-1
Here,
 
SC is the smoothing constant
 
Close is the closure bar.
 
EMA _(-1) is the EMA reading of the previous bar/
 
The value of smoothing constant is either 0 or 1 and helps in determining the length of the EMA. The formula used for the conversion of SMA look-back period to an EMA smoothing constant is:
 
SC=2 / (n+1)
 
Here, n refers to the look-back period in SMA.
 
For example, an SMA of 10-period is equal to an EMA having 0.1818 smoothing constant, using the above mentioned formula sc= 2/ [10+1].
 
There is a point if difference between SMA and EMA. The EMA is calculated by taking out the difference between the EMA and the close. As such, if the close is higher than the EMA, for the first time, the difference will be positive and the EMA will rise up. Alike, if the lose is lower than the EMA, for the first time, the result is negative and the EMA will go down.
 
An SMA changes its direction not only because of its relationships but also because of the close being used in the average calculations. For an SMA of 10-period, the present close will be only one tenth of the total; 10 closes which are used to calculate the indicator. The result is that the SMA is not responsive ton the quick changes in price. The EMA are a better option to deal with these issues.
 
To adaptive
 
The AMA can make the EMA more responsive to volatility and trend, by building on it. The formula used is-
 
AMA= c* (close_t-AMA _(t-1)) + AMA _(t-1)
 
The difference of the EMA and the AMA calculations is the adaptive part of SC and is denoted by “C”. First, we need to calculate the efficiency ratio, which is the price direction ratio to volatility of price.
 
Direction = close _t – close _t-n
 
Here,
 
Close_{t =} current close
 
Close _t-n = close n bars ago.
 
Volatility = SUM {absolute value (close_{t –} close _(t-1)), n}
 
This formula gives the sum of the absolute values of one-bar close-to-close differences of n bars. Kaufman says that n is equal to 10.
 
For example, if a currency pair has closed 10 bars up in a row, the ER would then be equal to 1 as the volatility and the direction are equal. If the market showed either upward or downward movement to close without any change after 10 bars, the ER would be equal to 0.therefore, it can be said that the more the market tends, the higher goes the ER, and the more the market makes a sideways movement, the smaller the value of ER.
 
The ratio can be used as scaling constant based on the trend and its degree, between 0 & 1, but not in case of trend that is moving up or down. We will preferably take an absolute value of volatility / direction, to avoid the direction from being a negative number. The ratio should not show a scale of -1 and 1.
 
The further step is to make a boundary for the AMAs length; the shortest length (fast) and the longest length (slow) of look-back periods will be reflected (these are technically unlimited). The formula mentioned below is used to make a range for the smoothing constant of an average (ssc)-
 
ssc = ER*( fast _sc – slow _sc )+ slow _sc
 
Here,
 
ER is the efficiency ratio
 
fast _sc is the fast EMA smoothing constant
 
slow _sc is the slow EM smoothing constant
 
Call to mind the EMA SC using the formula 2 / (n+1) to derive an approximate number of bars in an SMA n bar. Kaufman has suggested a range of AMA from that of a fast two-bar-lock-back period to a slow 30-bar-lock-back period, thus giving smoothing constants as results-
 
fast = 2 / (2+1) = 0.6667
 
slow = 2 / (30+1) = 0.0645
 
Therefore, ssc = ER* (0.6667 – 0.0645) + 0.0645
 
If you note a trending market, then it is likely that the ER will be close to 1 and ssc will be subjective to the fast ssc. If the market shows a sideways, then the ER is close to 0 and the ssc will be subjective to the slow moving constant.
 
Finally, it was also noted by Kaufman that if the market shows a sideways trading movement, it would drive the AMA to perform like 30-day EMA, the AMA to be following the up and down edge. The effect can be reduced by squaring the ssc. Therefore:
 
C = ssc ²
 
And then finally,
 
AMA = C* (close _t –AMA _(t-1)) + AMA _(t-1)
 
 
Flexibility and responsiveness
 
The strength of AMA lies in the fact that it can respond to the changes in the conditions o the market, which is an issue with studies using fixed-look-back periods.
 
While using a fixed look-back period it seems like we are fitting the market to a template. As the market tends keep on changing it is very difficult to settle down for a static approach. Adaptive studies and its usage is a very potential way of resolving such issues and improving results. Also, the AMA is ideally the best for the smoothing of other indicators.
 
 
First and Second Derivatives


 
First Derivative show  velocity of  moving (AMA Kaufman) change
Second Derivative show  acceleration of  moving (AMA Kaufman)  change
 
We have developed First and Second Derivatives for AMA Kaufman Metatrader Indicators



BJF Trading Group

http://iticsoftware.com
and © kroufr

 

        

Money Management is a big factor in any trade. In any trade two different traders can do the money management separately even they are not in the same trade. If we talk about two draftee traders who has the best high chance set-up, as well as both of them are on the different side of the trade so that result can be know easily it might be happen that they will not lose money in future. It is also possible that if both of the trader’s direction is towards each other they will not earn money or they stop to earn money. Some people say that what is the difference in between them? What is the factor which separates the experienced traders from amateurs? A proper management of money only is the answer.

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Forex Scalper Stomper REAL Account Trading perfomance:

 

Read More about Metatrader Expert Advisor Stomper EURGBP>>>

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Some time each person has to lose something to gain something. As when a person wants to get fit then he has to take the healthy food like this for money management people has to pay something. Some time people have to have their eyes on their position and they have to take the risk of loss. Some people even love to do it. This activity some time looks like a troublesome as it is not a pleasant activity. It does not mean that we should take loses for a very long time it will affect on our success.  It is not easy to recover from the loss the above table shows you that if a person gets the loss of 50 % then he has to earn the 100 % on his capital to come at his/ her original position. So it is not easy to recover from loss.
The big One
            Many people ignored this thing while they know about the fact mentioned in the above table. In some magazines there are lots of stories of many traders who loose their money in the trade and their profit for two to five years was finished by taking a wrong decision in trade. If you r management is poor enough then it will result into a not stopped loss.
There are many traders in the world that started their career knowingly or unknowingly watching the Big One. 
Many people believe that only one trade will make them a milliner and they will get a life which is care free and in a very young age they will get retired and will have a luxuries life but in the traditional market this dream of people is rock hard.
Nobody can forget the about George Soros who “broke the bank of England ” by just shorting a pound away and by doing this only he became the owner of $1-billion profit with in one day only but does not happen always. Many people have seen that most of the times people gain a big loss instead of big win. They lose the game in their life such that, they would never be able to come back into the game.
Learning Tough Lesions


If traders stop losses then they can easily overcome these fates and control them. Larry Hite was one of the biggest trader in 1989 he also advised that time that you must never take a risk of more than 1% in your trade. By using this theory they won’t loss their complete capital even if they get wrong twenty times. 
After that also they will be the owner of at least 80% of their equity if every time they get wrong.
But there are very few traders who follow this rule continuously. As a child learns that he should not touch a hot stove otherwise he would be burnt like this only many traders learn this lesion of not to take a major risk on their equity.
When you are going to enter in this trade then you must use your speculative capital. When you begin your business and the novices ask you that with how much amount do you want to start your trade at that time you must select an amount which would not affect your life materially. Now divide this amount by five because it may be that in some few starting chances you would be wrong. So in the beginning of trading you must not invest your full amount.
 
Money management style
            We can mange our money successfully in two ways. First one is a trader must take many regular as well as small stops and attempt to gain the profit from it by winning some chances. Another way is that he /she opts for many small squirrel-like gains and takes noncontiguous but big stops. He /she must thinks in the way that a big loss can be recover by many small profits. If a trader opts for first method then it generates several instances of psychological pain, but it produces a few moments of happiness also. While by opting second option, the trader will be offered many small instances of happiness and there will be the experience of big losses. 
By using this method it is also possible that a trader will get loss for a full wear or a complete month. But the method you opt for also depends on your personality. The FX market provides you one benefit that it allows both of the style equally and a retail trader does not have to pay some extra cost for it. As FX is a spread-based market so each transaction has the same cost and it does not take care of the size of the trader’s position.
Ex. In EUR/USD a 3 pip spread will be encountered by most of the traders which is equal to the cost of 3/100^th of 1% of the original position. This cost will not be common, in the terms of percentages, it does not mean that the traders wants to deal in 100 units lots or one million unit lots of currency. It means if a trader want to invest the $10,000 then the spread will cost $3 while if he is investing $100 only then the spread cost will be $0.03. Main problem arise when it comes to the commission because this amount vary according to the number of units in 100 units commission charges are 2% while in case of 1000 units commission charges are only 0.2%. This variability affects the trader very much and it also affects the transaction cost.


Four type of Stops
If you start your business once and you also select a serious approach to your business then there are four stops for you as follows.

1. Equity Stop-
In all of the stops this stop is very simple risk of the trader is determined before trading this amount is only the amount of his / her account or single trade. With the help of a common metric we can know easily that this risk is only 2% of any account on any given transaction. Means on a transaction of $10,000 a trader can have the risk of $200 only or 200 points.


There are many violent traders in the market who may consider using 5% equity stops but this amount does not consider the upper limit because if that person is wrong for regular ten times then he would get a loss of 50% that is a huge amount.
 
2. Chart Stop
If we analysis it technical we can find a lots of stops there which are driven by the price action of the chart or by various indicator signals technically. There are many technically oriented traders in the market who loves to mix these exit points with the regular equity rules to formulate chart stops.
 
3. Volatility Stop
Volatility is a more complicated edition of the chart stop. Chart stops uses volatility rather then price action to set-up the risk factors. Main concept behind it is that when environment is very much volatile, when prices traverse wide ranges, every trader like to work on the condition which is currently in the market. He does not want that any variation of the market should affect his/ her stops. This is applicable in both of the situation when environment volatility is low or high.
 Bollinger band is one important way by which we can easily know the volatility. It utilizes the regular difference to know the variance price.
4. Margin Stop
The fourth stop is margin stop which helps the trader to invest his / her money properly and at a very low risk.  This method is very much effective in FX if it is used astutely even it is the most unconventional money management strategy in all other strategies.
FX market operates 24 hours a day which is not the trend of any exchange market. So FX dealers as soon as receive the margin calls they can settle their customers position easily. As computers in FX market automatically close out all position if any customer is going into negative balance, customers never can get the negative balance into their accounts.
But is the customer wants to use this strategy then he / she has to divide his /her money in ten equal parts. 
Ex. If a customer has $20,000 then he will have to open the ten accounts of $2,000 each with his FX dealer. At the time of transaction customer can rope only $2,000 and the remaining $18,000 will be in his bank account.
 
A trader can control one regular 200,000 – unit lot because most if the FX dealers offer 100:1 influence. So $2,000 would allow him to control $200,000. Though, even a 1 point move against the trader would trigger a margin call because $2,000 is minimum amount that a dealer requires to trade.
 
Conclusion
            By all of above examples we can reach on a conclusion that FX market is very much flexible and money management in this market is also flexible. Money management varies very much according to the market variation. The one and only widespread rule of the market is that if a trader want to get succeed then he has to try all of the form available in the market. He must practice all the forms to get succeed. 


We can add your own money management or our MM

 

Money Management Parameters:
extern string _tmp2_ = " --- MM section ---";
extern bool EnableMM = true; //switch on dynamic lot yes/no
extern double LotBalancePcnt = 10; //calculate lot = 10%balance
extern double MinLot = 0.1; //minimum permissible lot
extern double MaxLot = 5; //maximum permissible lot
extern int LotPrec = 1; //   1 - for standard account  (lot 0.1); 2 - for mini accounts (lot 0.01)

www.iticsoftware.com