Archive for April 8th, 2010

Improve forex strategies with consecutive losses

While searching for good forex systems you probably have noticed that some forex strategies have consecutive wins and consecutive losses. This often happens when market conditions changes. For example, strategy has many wins in a row when volatility or other factors are beneficial to the strategy and at some point in time it starts to loose. Losses often come in a row because something has changed in the market and strategy fails under new market conditions.

There are several ways to resolve this problem. You can find some indication of changed market conditions and do not trade at this time. However this is easier to state than to do. This leads to the easier solution which can be incorporated in any strategy. If forex system has consecutive wins and consecutive losses you can make it more profitable even without knowing the reason why it starts to fail. Money management helps here. More specifically – decrease factor.

What is decrease bourgeois in money management and how it can help you in forex? By using decrease bourgeois you can decrease your position size after defined number of consecutive losses. E.g. let’s state your usual position size is 1 lot and you decrease this size to 0,2 lot after one loss or several consecutive losses. It will minimize draw down during bad streak. You will go back to normal order sizing after the first win.

In order to comprehend superior how decrease bourgeois helps we can take example when 5 consecutive losses happen and make some easy calculations. Let’s state that your usual position size is 1 lot and you are risking $300 on one position. The total loss in bad streak would be:

Without decrease factor: 1+1+1+1+1 = 5 lots (5 * $300 = $1500 loss)

Decrease to 0,2 after 2 losses: 1+1+0,2+0,2+0,2 = 2,6 (2,6 * $300 = $780 loss)

Decrease to 0,1 after 1 loss: 1+0,1+0,1+0,1+0,1 = 1,4 (1,4 * $300 = $420 loss)

You can see that losses can be decreased several times. You need less time to recover from losses when market conditions becomes in favor of the strategy. It lowers the risk and limits draw downs. Sometimes it can even help to turn unprofitable strategy into profitable one.

Of course it can affect the profit as well so you should find the right combination which works: when to decrease and how much to decrease you can find out by testing the strategy.

This will not help strategies with evenly distributed wins and losses, but usually these wins and losses are not evenly distributed during time, so decrease bourgeois can help in those cases.

If you are interested in using decrease bourgeois in expert advisors, you can find a tool with this feature here. You can add decrease bourgeois to any EA which you build with this online tool.

You can create forex robot (EA) from your own strategy without any programming knowledge by using EA Creator online tool.

Forex Trade Software – Benefits of Forex Trading Software

Forex Trade Software

Forex trading software has a number of benefits. It can automate multi of the common tasks the current you will would like to perform when investing. Using this type of a program will grant its individual to look at trends and statistical analysis so that users can produce larger decisions. Forex Trade Software

It additionally grants you to trade online directly and overall, simplifies the investing process. If you select to invest on your own, the process can get pretty redundant and sometimes confusing, especially for someone who is just starting out. Forex trading software will make the process much easier and streamlined. Simply log into your computer, execute trades, look at the past transaction history and get advice. Forex Trade Software

This can establish to be extremely helpful and might give you the tiny extra something that you need to make larger profits. The capability to look at trends, your individualized history and perform statistical analysis grants you to take a much more educated and deliberate approach to investing. In this way, its investor will be healthy to do much more then simply making guesses. Forex Trade Software

Instead, with the tools in hand, it will help you reap more profits and have greater success. Your individualized information and that of the market will be presented in a well formatted and simple to read manner. This will grant you to know exactly where your investment portfolio stands, when and if there are any profits and how the market is performing. Forex Trade Software

Forex trading software will also grant you to trade directly online. In many cases, you will be healthy to do just about everything needed in order to get your trading career started and on track. Overall, the biggest advantage of this type of applications is that it simplifies the entire process. Most of the analytical tools that are built into the program will give its individual the greatest chance of being successful in making profitable trades. Forex Trade Software

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