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If you trade the forex markets regularly, chances are that a lot of your trading is of the short-term variety; i. From my experience, there is one major flaw with this type of trading: h igh-speed computers and algorithms will spot these patterns faster than you ever will. When I initially started trading, my strategy was similar to that of many short-term traders. That is, analyze the technicals to decide on a long or short position or even no position in the absence of a clear trendand then wait for the all-important breakout, i. I can't tell you how many times I would open a position after a breakout, only for the price to move back in the opposite direction - with my stop loss closing me out of the trade. More often than not, the traders who make the money are those who are adept at anticipating such a breakout before it happens.

Forex non directional trading

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You gave an example of — pips which you also stated could be devastating. I certainly understand that and would agree with you. What I am wondering is, are there ways to determine when is the best time to turn on the EA? To me, logically, the ideal place to turn on the EA would be in the middle of the trend. Also, what about time frames, a trend in a 15 minute chart might only be only a small retracement say in a 4 hour chart. Should time frames be considered? This has always been a bit unclear to me.

Your answer is appreciated. By the way, I have already had very good success using the non-directional method of trading. I am following your personal method of trading the non-directional method. Thanks for sharing that method, it sure works well!

Just wanted to say thank you for such a great EA. Also watch the relative strength of currencies. It is good to trade the strongest against the weakest when trading the directional way. Avoid the strongest against the weakest crosses as they are more likely to trend for the non directional method. The weekly and daily charts are best used to determine likely trends and likely trading ranges. There is no known way of accurately and constantly determining the start and strength of a particular trend.

This is not always possible because of the number of unknowns. You must be logged in to post a comment. It is successful because:- Firstly it follows a hedging approach where buy and sell directions are traded at the same time. Secondly it uses the powerful multiplier effect that often can allow trades taken in a sell direction to be positive even is the price has moved in a buy direction. Thirdly by trading both in a buy and sell direction the multiplier effect is in fact multiplied by 2 The biggest danger is a very quick and strong trend over to pips could be disastrous.

So the general principles are: Use account sizing that will allow for the financing of at least 30 open trades. Only use risk management processes after 30 trades are open and there is a danger of more open trades developing. So the Maximum open deal setting should be used to avoid more than 30 open trades. It will allow the next trade but close the trade with the biggest loss. Ignore stops and variable grid sizing.

They are mainly used for directional GTM trading. So how can one manage risk? The trigger to this article was a question posted on the forum: " why we should use bull credit put spread when you can just long call they both have limited loss both in long call you have unlimited profit why limited it with bull put spread? By Kim, April The words above are powerful because they're approach-agnostic. It doesn't matter if you're an old-school pit trader who swigs grit instead of coffee before the opening bell, or a Gen Y technocrat who codes trend-detection algorithms.

All traders live and die by The Four Words. If you consistently buy low and sell high, then you will be profitable. Earnings crush is the fall in implied volatility after earnings is announced. Typically, earnings announcements cause the price of the stock to move more than normal. The move will have more effect on short dated expirations since the day of earnings large move has more weight than the rest of the days with normal moves. In my previous article , I described a strategy of buying strangles a few days before earnings and selling them just before earnings.

In this article, I will show why it might be not a good idea to keep those strangles through earnings. Posted February 23, I understand why an options trader might prefer using a non-directional trading strategy rather than, as you phrase it, "bet on the direction of the markets or individual stocks".

These non-directional trading strategies certainly minimize your loss potential, but at the same time limit your profit potential. With proper risk management directional trading strategies can be even more profitable and you can unwind the trade at any point you see the market starting to move against you. With sufficient amount of research and analysis on a specific stock you can predict where the market won't go to in the allocated time frame expiration month rather than trying to predict where the market for that stock will go to in the allotted time frame.

There's a hugh difference in the two approaches. In the second approach, which I don't want to take, I'm making a guess at where I think the market will end up at the end of option expiration. That's the hardest game to win. Nobody is that good at figuring out the where and when of a market move. But, if you are somewhat good at having at least a general idea of which way the market is headed either higher or lower , you can also make a pretty good guess as to where the market probably won't end up at option expiration.

When you sell options, your only concern is for the market to not go pass the OTM option strike that you are short. That's the key. And when you have a general idea where the market probably won't end up at option expiration Posted February 24, There are many ways to trade options. Directional strategies might work for some people.

It is true that non-directional strategies usually limit your profit potential. But with directional strategies, profit potential is unlimited only in theory. It also impacts your position sizing. Also, don't forget that there are many types of non-directional strategies.

Some strategies bet that the underlying will not move much. Others like straddles need it to move - just doesn't matter which direction. The bottom line is that everyone should find what works for him and stick to it. There is no holly grail, only hard work and discipline. Your statements about non-directional strategies are well taken. I completely agree with you that everyone should find what works best for them and stick to it.

For me directional strategies have proven to be very profitable. Thanks again for your feedback. By large margin. I definitely cannot compete with those results. On the other hand, my results are fully documented. I still have to see directional strategy consistently producing similar results or even half of it.

I mean, not some absurd claims, but fully documented track record, with portfolio allocation etc. I'm certainly not the world's best trader, but at the same time I'm not making an absurd claim. Since I don't currently have fully documented trading results neatly tabulated to present at this point, I'll have to present them at a later date. To successful trading. Lets see your directional trading results in real time.

Kim is willing to discuss and share any new approach or idea in options trading. Are you too? Show us any and we can give you our opinion if you want. Posted February 27, Noah Katz. However, there is a "small" problem: when you sell a naked put, there is margin requirement. And the only way to calculate gains is return on margin. Unfortunately, internet is full of hype from people that will tell you what you want to hear.

In some cases it is ignorance, in others it is intentional misleading. Be very careful when someone makes absurd claims. Usually when you dig deeper, you find out the "fine print". Posted February 28, What you characterize as intentionally misleading was really a misunderstanding.

There are many recognized options trading experts that promote selling naked puts as a fabulous way to collect option premiums, which generates income for you while you wait to potentially purchase your stock at a lower level. How great is that? Someone will actually give you cash today in exchange for the opportunity to buy a stock at a lower price.

You can see it as sort of a consolation prize given to you for your patience as you wait for your stock to get cheaper. Naked put selling is a time-tested, legitimate, and popular strategy. You only want to sell naked put options on stocks you want to own. But since you are selling OTM put options on these stocks, it's unlikely you will be assigned the shares. Thus, the option contract expires worthless and you keep the full premium. So directional trading, like naked put selling, can be very profitable… potentially more so than non-directional.

Is selling puts good strategy? It's not a holy grail you profit less if the stock goes up a lot , but it's a great way to buy stocks at discount. However, I find it ironic that you advocate this strategy as superior to non directional trading while mentioning that non directional trading limits gains. Isn't put selling limiting gains as well?

With naked puts selling, this is not the case. As a side note, your claim "But since you are selling OTM put options on these stocks, it's unlikely you will be assigned the shares.

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Terraform global ipo date So how can one manage risk? Sign In Now. There are four basic types:. The high of a possibility of a return much higher than the risk-free interest rate cannot be matched. A few weeks ago, I got the following email from one of our former members: " I would like to share with you an article about "projected no risk trades" or "no risk trades". Why non-directional options strategies are a must have in trading portfolio Non-Directional strategy means a combination of options capable of making a pay-off that is indifferent to which direction the underlying is going to go.
Robot forex 2015 profesional live Sign in to follow this Followers 3. With sufficient amount of research and analysis on a specific stock you can predict where the market won't go to in the allocated time frame expiration month rather than trying to predict where the market for that stock will go to in the allotted time frame. You missed my point. The time decay while the volatility falls would tend to benefit. By Kim, May 2. I mean, not some absurd claims, but fully documented track record, with portfolio allocation etc.
Forex non directional trading Directional strategies might work for some people. Reproduction of news articles, photos, videos or any other content in whole or in part in pawn shop investing 101 form or medium without express writtern permission of moneycontrol. Since I don't currently have fully documented trading results neatly tabulated to present at this point, I'll have to present them at a later date. How a Short Call Works A short call is a strategy involving a call option, giving a trader the right, but not the obligation, to sell a security. One set would be in favor of Volatility going up and one would be in favor of Volatility going down. I understand why an options trader might prefer using a non-directional trading strategy rather than, as you phrase it, "bet on the direction of the markets or individual stocks". There are four basic types:.
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Non-directional trading Strategies with coach John White

Yes, There is! Futures hated Forex can do the non-directional trading with less margin problem. That is the main reason why FIFO and No Hedging. A more common news trading strategy is the non-directional bias approach. This method disregards a directional bias and simply plays on the fact that a big news. The GTM non directional GTM Strategy is a unique and unusual Forex trading strategy. It has been designed to basically trade any financial market that trades in.