Ninja Trading

What is it not necessary to do?

For maintenance of protection of the rights of investors some methods of business management in the industry of securities are forbidden and strictly punished. They are:

1) Recommendations to clients about purchase or sale of concrete securities if he is not adjusted with financial possibilities, the investment purposes, experience of the client and his age.

2) Acquisition or sale of securities without the permission of the client.

3) Transfer of the client’s money from one fund in other.

4) Distortion, concealment or inability to open essential facts, which concern investments. For example, risk or the costs connected with investment in a security, the financial information on the company, securities ratings, etc.

5) Removal of money resources or securities from the account without the preliminary consent of the client.

6) Establishment of increased commission or other payments at acquisition or sale of securities.

7) Warranties to clients that they will not lose money at fulfillment of certain transaction; certain price predictions or sharing in losses of the client.

Private bargains between the broker or the client if they can infringe upon existing rules of NASD, in particular, if these transaction are done without notice or permissions of representing firm.

9) Fulfillment by a brokerage office of the bargains before it will be executed the customer order.

10) When markets-makers don’t set limit-warrant of the client in the quotations.

11) If they don’t show due diligence to follow that the warrant of the client is executed under the best price in existing market conditions.

12) Acquisition or sale of a security with use of insider information, concerning the issuer.

13) Use of any manipulations or roguish actions or the adaptations connected with prompting in acquisition or sale of safety stocks.

According to rule of NASD Conduct Rule IM-2110-5, any of brokerage offices has no right:

- To co-ordinate the prices (including quotations), bargains, trading reports (including agreements on delay and discrepancy, agreements on maintenance of the minimum spread or the size of a lot) with any other firm or the physical person connected with a brokerage office;

- To ask other brokerage office to change the price (including quotations) in situations when one market maker asks other to move or adjust quotations shown to it to requests of other;

- To participate, expressly or by implication, in any behavior, which threatens, forces, intimidates or tries to affect in the inadequate image other firm or the physical person connected with a brokerage office (including attempts to regulate, support the price or quotations in any automatic systems operated by NASDAQ to trade or other behavior, which counteracts or prevents failure of competitive activity of other markets-makers or market participants).

It is only a small part of what cannot be done on the American stock market. SEC and NASD control observance of rules of behavior on the American stock market. And violators are rigidly punished.

More than 20 million of individual investors, working directly with the broker companies, seldom have the reason to complain. However, naturally, there are cases, when the client believes that he was offended. In this case it is important, that the complaint has been considered fast, fairly and effectively. The trust of public on financial markets in many respects depends on it.

If you believe that with you have been treated illegally, to begin with you should contact the manager of your broker. If explanations of the broker do not satisfy you or he does not wish to accept proper measures, write the complaint – and the American law will protect you.

It is a must to gather as much knowledge about Forex market as possible. Because this info will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be rock solid guarantee against losses, in particular on Forex, but sometimes even one Forex books can save you much money.

As trade of trends uses a trend component in movement of the prices, successful trading systems use a number of methods for identification of trends. The idea of use of the independent filter of trends is popular. It is algorithm which preliminary estimates dynamics of the prices and defines in it presence of a raising, lowering or lateral trend.

There are various approaches to working out of filters of a trend. Some methods, such as sliding averages, include indexes of presence of a trend in technology of inputs. Others (not recommended by me to use) try to predict forthcoming change of a trend and consequently giving an input signal still while the trend moves against this signal.

Many traders try to complicate a problem of identification of a trend. They investigate the various freakish mathematical equations and methods of the analysis of last movements of the prices for more exact definition of a present condition of a trend. I insist for that it is useless. As well as all things in trading, simplicity should be first of all.

Certainly, speaking about trend existence probably it only concerns a certain time window. But if you have already defined this time window, there is nothing difficult in definition in this time interval of presence of a trend. The prices or moving upwards during this time, or decrease downwards. You can look at the schedule and in most cases quickly to define it. What for complicating this process? It can be in case of a consolidation phase difficult precisely to define at a single glance what trend prevails. However there are no reasons for obligatory complication of process of definition of a trend.

At creation of the simple trend indicator there is one important question. What indicator of the price should be used for its designing? There are four choices – opening, closing, and the maximum and minimum prices. It is possible to use them separately and together. Whether it can help to define special research what of these indicators or their combination carries out function of indication of a trend is better? Or they are equivalent in the ability to identify a trend?

I have originally executed such research in the book which is called “The Dow Jones-Irwin Guide to Trading Systems 1989″
The research period made five years, coming to an end of June, 30th, 1987. Some time ago I have thought that it can be interesting to repeat this research with the new data.

The method consisted in creation of four simple indicators of a trend, each of which used various components of the price. For definition of their efficiency I have created for everyone simple trading system. When the indicator shows presence of an ascending trend system opens a long position and holds it until the system will not show presence of a descending trend. During this moment the system closes all long positions and opens the short.

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Let me to tell you about simple, but effective methods of an entrance in the market. They – one of the best though are simple and plain. These methods well show themselves, confirming efficiency in great majority of cases, when other techniques give in, submitting false signals or forcing us to doubt correctness of the decision. They are selected as a result of studying of methods of a correct entrance in the market. Described entry points equally well work in any markets: Forex, futures, safety stocks. And it is not necessary to forget about stop-loss warrants.

Trade in a trend.

Trade in a trend often is represented as a simple thing. All of us know an old indisputable truth: “Trend is your friend”. But the entrance in an item not at the beginning of just an arising trend usually looks problematic and dangerous to the majority of investors. The reason is hidden in the psychological barrier arising at the majority of people from exchange community, which hardly revises the point of view at an existing trend.

At the begun rise in prices after descending movement, everybody waits for catastrophic falling, therefore with pleasure sells, and at any fall in an ascending trend, it seems to all that the prices will go above and consequently all are ready to purchase at each correction. For this reason the majority of investors enter into purchases almost at the top and sell almost in the market basis. In the middle of a trend often there is a tranquility of investors; they forget about care of safety of the profits, which they have got on trading accounts.

Purchases in rising and sales in a going down trend at the majority of traders do not coincide with a market rhythm. Pay attention, we do not consider cases, when trade forms at the moment of trend origin. Now we speak about how it is necessary to behave in a trend. And for this situation the best methods of an entrance in the market are based on use of trend lines with application of support or the resistance, advanced by means of the last complete movements. So, here are two best points, allowing enter into trade with high probability of success at rather small share of risk in a market trend. In each of them is supposed application of limit warrants, and only occasionally – market, if for this purpose there are strong reasons.

Purchase from a line of an ascending trend at the third contact.

The ascending trend is advanced, when the prices rise. We have a possibility to conduct a line with an inclination upwards. It is conducted on two consistently increased bases of the price bars having an absolute bottom rather at least of two previous and two subsequent bars. The best moment for an entrance in the market arises at the third contact of the price trend lines. In this point, unconditionally, it is necessary to purchase – and only to purchase.

Using such technique, it is necessary to find out beforehand price levels, which can be various – depending on during what moment there will be a contact of the prices with a trend. The best variant – to use day schedules where for each day there will be a price level. More exact adjustment can be conducted, using hour or 30-minute schedules. But thus it is necessary to consider real possibilities of the software as bad quality of software can deform the forecast very much, give wrong price levels for an entrance.

It is important to gather as much info about Forex market as possible. Because this knowledge will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be a 100% guarantee against losses, especially on Forex market, but sometimes just one Forex books can save you much money.

What differs the casino from the stock market? Some people don’t see basic distinction in them. However, most likely, it is necessary to agree with people, who come to absolutely certain conclusion: the casino is much easier.

Case with roulette.

Disputes on the topic, if the stock market is the concentrated expression of state of affairs in economy, or this is casino, don’t stop many years. Thus under “casinos” understand full accident of trading results and senselessness of investments as word in the action. Opponents say that the stock exchange is not casino, and it is that place where everyone, having put mind and diligence, can grow rich. And both sides use word “casino” with some neglect.

Before to join the one or another point of view, we will try to understand mechanisms of functioning of stock exchange and casino. Probably, detailed consideration of internal mechanisms will allow change opinion both on casino, and on the stock market.

In the beginning we will more detailed stop on casino. For example, we will disassemble case with roulette. The client simply stakes on odd and even, on red or black, and also on any concrete numbers. He stakes. In any case still until when the ball will stop, he in accuracy knows the sum, which he can lose.

If, having received negative result, the client of casino wishes to continue game again, and then he won’t lose more than stake. The sum of the maximum prize also is known in advance, as probabilities of outcomes for each stake are known also.

And now we will address to job of the trader. In the majority of books for beginners it is necessarily noticed that the profit at stock exchange can be as much as big, and you can loose everything also. Each trader has the trading system, which submits the signals of opening and closing of positions. In each case the sum of profit and the loss are various. The trader himself defines the potential income and the maximum losses, which he is ready to accept at failure.

Rate principle.

Let’s imagine the elementary trading system, which is based on day schedules. We will assume that the trader opens position in the beginning of exchange day and closes it in the end. Intraday fluctuations for many safety stocks reach several percent; therefore the potential profit is considerable. In growth of the market the quantity of the days closed with gain, exceeds number of days, in which prices fell. And, on the contrary, on the bear trend the quantity of “negative” days surpasses quantity of “positive”. It is very simple and, apparently, profitable system, however you will not always meet the person wishing to use it. The reason is that in different days the price pass different distances. And one day against trend can absorb the saved up profit of previous days. Here it is necessary to recollect casino. If the gain or falling of each day always had identical value, similar systems would be efficient. The system could be profitable if the rate principle was observed – the loss and profit are known in advance. Really, the difference between the favorable and unprofitable days, increased by rate size, defines the sum of profit of similar system. Rate principle is one of the main advantages of casino before the share market.

It is vital to gather as much information about currency exchange market as possible. Because this knowledge will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be a 100% guarantee against losses, especially on Forex market, but sometimes just one Forex books can be of big service to you.

Trade in market lateral movement to many people is represented dangerous enough and ungrateful business. Attempts to apply break strategy work badly, and quite often develops such plot: after filling of stop warrants the price some time moves in the necessary direction, and turn round then, bringing the investor loss as a result. Not many people can buy from the bottom border of a trading range and sell in its top area – psychological pressure is too great because generally it is necessary to trade against a current trend. But there is one strategy, which works extremely effective on safety stocks, futures or the currencies, which designated the trading corridor and have begun movement in it.

The technique is constructed on the simple fact, saying that in a trading range at any increase above the border, dividing it in half, the market becomes stronger and is inclined to growth. Simultaneously with it, any fall below the specified line leads to easing of the market getting the bear properties. Thus, there is a possibility to use this border zone between the bull and bear market for short and intermediate term trade.

Trade from the middle of the range.

There are some rules for border zone use:

- To buy, if the market rises above the middle (50 % corrections) of the last complete market movement.

- To sell, if the market falls below the middle (50 % corrections) of the last complete market movement.

This technique is poorly applicable for trade with time frameworks over several days. More likely, it approaches for intraday trade and for cases of deduction of a position no more than 2-3 days. But the analysis in any variant should be made on day and even week schedules.

It is usually not difficult to reveal 50 % border of one, and it is even better – two consistently appeared last complete market movements, but there is a question: “What is it possible to use for acknowledgement reception?” Unfortunately, the simple answer on it does not exist – usually near to this border zone a little that specifies in unambiguity of the future events, and the market as a whole looks ready to move to any side. Therefore, to help to understand, how it is necessary to operate, viewing of behavior of the market can only during passage of the border dividing the bull and bear moods, including change of its character during this critical moment. Fortunately, online trade possibilities allow doing all of it, without resorting to a conclusion of the prices to the schedule. The entrance in trade by the given technique has a logical point of an exit, which prompts the revealed trading range, where the position needs to be closed. Other variants assume an exit near to any of levels of Fibonacci – depending on kinds on profit and possible losses.

Hope you will find the proper method of trade for you and will trade profitably.

It is vital to gather as much info about Forex market as possible. Because this knowledge will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be a 100% guarantee against losses, in particular on Forex market, but sometimes just one Forex books can be of big service to you.

It is necessary to recognize that in designing of indicators prevail methods of mathematical interpretation of the price, and in mechanical trading system designing the main is chance. That is, as a matter of fact, projecting mechanical trading system, we quite often search for law in casual features of behavior of indicators. It, by the way, that only thing that makes related “classical” mechanical trading system with connectionist technologies on which basis is developed notorious “black boxes”.

Thereupon it is necessary to notice that it is possible to adjust results of testing of trading system under demanded result. But it does not mean at all that it will show the same results on the real account. The first condition of viability of trading system – it should be tested on the greatest possible time interval, which your provider of the data only can give.

There is an opinion that at reception of statistical advantage the time interval matters only, it is unimportant with what period of the schedule. This is obvious error. Yes, day schedules sometimes happens easier to analyze, than intraday. But for testing of trading system happens most important quantity of bars or candles, instead of testing time. We will speak, a candle for the program – the basic unit of duration of testing. In particular, on Forex optimum results are reached, as practice shows, on hour schedules. It is especially necessary to watch slumps of the schedule of profitableness. It is better, that the result of testing was less, but more stable. A slump should not make more than 10 % – a management of broker offices usually puts such conditions for traders in civilized countries.

If a trend is lateral.

Turning figures of lateral trends seldom repeat with mathematical accuracy. Therefore before the developer of the system trading on a trend there are two problems: a filtration of signals and restriction of losses on purpose that slump has become covered by the subsequent profit.

In general, it is necessary to look not at digital results of testing, and for a profitableness curve. In an ideal the profitableness curve should give aesthetic pleasure with the constantly raising line to the developer of trading system.

It is better to enter into the market not on that bar on which the signal stands out, and on the following when the signal will already be fixed and will prove to be true. For this purpose in the program only it is necessary to include a corresponding option. Let it will reduce results of your testing, but it is necessary to remember that at testing you investigate “a dead” retrospective show, and at trade in real time deal with the real market, which behaves like a live being. In practice in any case it is not possible to reach more than half of that sum, which has been received during optimization.

In summary, it is necessary to notice that at trade in the stock market where the nature of launch and falling of safety stocks absolutely different, it is impossible to use the trading systems, which are giving out signals in both sides. For generation of signals it is better to use two systems: one for the purchases, the second for sales. Good luck!

It is a must to gather as much knowledge about Forex as possible. Because this info will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be a 100% guarantee against losses, especially on Forex market, but sometimes even one Forex books can be of big service to you.

Having finished market research, the trader should know if it will go bull or on lowering. Besides, by this time he should solve, what part of the capital should be enclosed in the transaction. And, at last, last step is actually purchasing or contract sale. It is the most complicated part of all process of trade in the margined markets where determination of the concrete moment of opening and closing of positions should be as more as possible exact. The final decision concerning that as well as where is included into the market should be based on a combination of technical factors, principles of capital management and stock market order type.

Feature of determination of exact time of an input in the market and an exit from it on the basis of the technical analysis consists in very short-term character of this analysis and is determined in the days, hours and even minutes, instead of weeks and months. But in all cases the same technical tools are used. Further is considered general provisions of such analysis.

1. Tactics of actions at breaks.

There are three variants of actions of the trader at breaks of the prices:

# to take a position beforehand, anticipating break;

# to open a position at the moment of break;

# to wait inevitable recoil after break.

There are pros and cons of each of three approaches; the combined approach is sometimes applied. At work with several prizes the trader can open on one position on each of three stages. It is possible to take a small position before expected break, then to purchase still right after break and, at last, to open additional positions during insignificant falling of the prices during the correction following break. If the trader trades small positions its decision will be affected first of all by two reasons:

# he is ready to risk what means on this transaction;

# how much aggressively he will act.

The most conservative trader in this situation will open a long position on recoil of the prices. But, as it is paradoxical, waiting tactics also can appear risky – in the sense that, expecting recoil, it is possible to drop in general input moment in the market.

2. Crossing of trend lines

The given signal allows entering into the market or leaving it early enough, especially when there is a crossing of the significant, repeatedly “checked up” trend line. Certainly, thus it is impossible to forget and about other technical factors.

In case of trend line use as level of support and resistance long positions open at falling of the prices to level of a steady ascending trend line, and short – at elevating to level of a descending trend line.

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Open/Close Indicator:

It is an alternative trend indicator which was created years ago. It evaluates the relation between an opening price and by closing in the last business day. Thus it has a certain advantage for our research, including an opening price in calculations. It is the unique indicator of a trend which uses an opening price.

Comparing the sum of the prices of closing to the sum of opening prices for the certain period, it is possible to receive the good indicator of a trend based on the relation of opening and closing.

Use based on Open/Close Indicator trading system gave an average profit on all markets at a rate of $31, thus profitable were half of markets, and on one there has come ruin.

Combination of indicators:

The last test tried to use all accessible components of the price (opening, a maximum, a minimum, closing) for trend definition. The combination from Momentum, Directional Movement and Open/Close was the trend indicator. When all three indicators measured for duration in 34 days, showed simultaneously upwards, was considered that the ascending trend takes place. It remained in effect until all three indicators did not show simultaneously downwards. In this point there was a trend revolution downwards. Results of the given research indicate that the combination from indicators was the best indicator of a trend.

Such very simple trading system was profitable at averaging of results of the auctions within 10 years, indicating that actually exist suitable to use in trade trend plots in the general price range in the market. Use of more refined trading systems and their trade in the more carefully selected markets can improve your results considerably.

Trade system on MACD:

One of the simplest methods of trading in the presence of a trend. On the schedule it is used MACD 12/26 with an alarm line 7. The input is carried out: Sale – at the MACD move from a hump downwards, at care MACD below an alarm line. Pose closing passes at crossing MACD “signal” upwards.

At achievement of low bottom MACD, at closing next “turn” and already a pose opens “long” is covered at MACD crossing. And again, before formation MACD of top..Forex trading indicators. The system works well at a bright trend on four hour or day schedule, however the majority of traders advise to refuse from MACD at flat trend.

The interval, and slightly other parameters of an alarm line and MACD are for this purpose necessary for 15-30 mines. I suggest you to trade by coefficients and to look what will be received. The given instrument has some latent possibilities. Any way everything depends on desire of the trader to find the own weapon…

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Those who need forex investment propositions – visit this managed forex trading site.

The success or failure is defined by understanding of risks and rules, ability to use them. Risk of bankruptcy of the company is always above, than the government one. There are much more various external influences, which can affect a safety stock cost. Accordingly, risks at financial speculation with safety stocks of the companies above, than with currency. Legal questions, on the contrary, are better worked out in the stock market. High volatility of currencies, for example, is connected not with the currency, and with trade conditions (a leverage 1:100).

The success or failure at financial speculation is defined by a likelihood estimation of risk of separate financial tools, trade conditions, execution of transactions and other operations. Mathematics, the psychology and a correct estimation of risks define an overall performance of the trader, instead of the financial market on which he operates.

You should know that brokers always insure accounts of the client. They worry about their reputation. Usually companies insure accounts of clients on the segregated account against bankruptcy for any external reasons. A difference is only in the one matter, what insurance company is used? Because it will be necessary to receive money from that company.

Anybody insures against risk of loss of money as a result of financial operations. From bankruptcy are not insured either clearinghouses, or brokers working in the various financial markets. The same is with problems with payments of the insurance company – especially if it is very far from you. A choice of the broker – always risk, which is necessary for considering at decision-making. Distinction in quotations of various information systems in the currency market is shown often enough (the reason in organizational structure of the Forex market) and does not exceed several points. Here there is no danger for you.

In all financial markets (currency, stock, future) for increase in the profit brokers use a delay performed by the order. It is necessary to be afraid of it.

Further is a spread. It is important not the spread, and its relation to base. During strong movements the size of a relative spread increases in all financial markets. And it is difficult to estimate, where more. Count – and be convinced. Margin requirements. A leverage 1:100. The higher the leverage, the more risk. It is an axiom. But it is only in the event that you do not observe a risk-management rule. Infringement of margin rules is punished equally in all financial markets – liquidation of positions. Operations in all financial markets allow you to earn money. The matter is in you, first of all. You should be ready to risk and to work hard in the stock market, if you want to have stable income.

It is a must to gather as much info about Forex market as possible. Because this knowledge will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be rock solid guarantee against losses, especially on Forex market, but sometimes even one Forex books can be of big service to you.

Jayson Yankovsky has 20-year-old experience of trading. Trading in futures, options and currencies since 1987, he is constantly upgrading his knowledge. He is the author of several trading systems, has trained many other successful traders and often publishes the analytical paragraphs in various newsletters. Besides, he has published the book “Trading rules which work”. Twice a day he conducts on-line analysis on the market, ensuring to traders fundamental and technical estimations of a current situation.

Each trader had a bitter experience of placing of stop warrants too close to the market. Actually, it has no significance, whether there was this stop warrant for an exit from lossing or the advantageous bargain, frustration arises, when the stop warrant is executed, and soon after that the market continues to move in the same direction in which the bargain has been concluded.

You have accepted loss which, probably, could turn subsequently to profit, or have reduced the profit. From all aspects which to me were required to be developed at formation of my trading approach, I have possibly spent most of all time for improvement of placing of stop warrants, than for something else. After long considering of this question, I have come to a conclusion that the problem consists not in, whether there should be a stop warrant as trade without restriction of losses is “constant expectation of accident”. Actually, the problem consists in an effective utilization of stop warrants to maximize the probability meant by your trading approach.

I have considered psychology of stop warrants, and I believe that any trader can improve the application of stop warrants simply applying them less aggressively. Here are the rules which I recommend:

1. First of all, you should understand once and for all that stop warrants are not obligatory. The certain way to transfer wearisome recession of the assets is a trade in general without protective stop warrants. In my opinion, it includes “mental stops”.

The purpose of installation of the fixed stop warrant should not be exclusively connected with an exit from the existing bargain. It needs to be considered as a part of the good-thought over trading approach. If we are ready to admit to ourselves that we can not know for certain, whether there will be a given concrete bargain advantageous your use of stop warrants will be simple a recognition of this fact. You, as the serious trader, always should have the protective stop warrant irrespective of, whether you expect that it will be the warrant on an exit from a trading item which at you is opened now for trade during the day.

At least, exhibiting of the stop warrant against your open position guarantees that if, for any reason you drop something before leave the bargain or will exhibit the stop warrant for the night, you will be protected.

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