Daily Recap of the Cowabunga System for Wednesday, 10/22/08

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http://AutomatedForexCash.info

It sounds like an interesting method. So I have tried on paper trades.

Too early to confirm if it will be good for long term but I have got some satisfactory results on paper.

I will try it out for a month or two before I start on some small trades. Forex is risky so I always prefer to be patient.

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Daily Recap of the Cowabunga System for Tuesday, 11/17/08

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Background: Fundamentals, with an investing strategy out of the Graham playbook (by distressed, unloved or otherwise underpriced securities). Risk is minimized by having a margin of safety, higher upside than down, and by buying into companies that can be understood and predicted down the line.

However, finding a good opportunity tends to leave at least some cash floating around. Aside from dumping it into a placeholder stock like BRK.B, moneymarket, etc. I am interested in utilizing, to some small degree, daytrading.

Basically:
(1) How is risk managed in security day trading? Forex trading?

(2) Do the few successful traders operate by intuition or determinism?

(3) How wide of a scope to most traders take? Ten stocks? One hundred? All of them? Similarly, how wide of a scope do forex'ers employ?

(4) Is there a way to get a hold of raw market data, outside of the wacky software like eSignal, etc?

Please do not try and pitch a trading system. Thanks.

Once you are able to learn the basics of online trading, you won't need to ask for specific details like the ones you ask. You would know how to figure out the answers for yourself. And of course, be able to trade profitably on your own.

A Free Basic Hands-on Training is available at http://finance.groups.yahoo.com/group/currencytrader/.

I am interested in learning this however there are so many different options to choose from. I would like to know what works and what are you opinions.

No.

The reason is simple: No serious vendor would offer Forex Trading Systems.

Here's why:

Though they call it the "Foreign Exchange" there is no exchange. Prices are NOT regulated or standardized as they are in the futures markets. In fact, when trading Forex you are trading against the broker and not against other traders.That's why they can "guarantee fills".

You are trading against the house, and the broker takes the other side of the trade. Keep in mind that you receive the forex quotes from your broker, and he can basically display any price.

Take a look at the following Forex quotes. All three screenshots were takes on Tuesday, March 21st at 3:30pm US Central Time.
I used three different websites to obtain the quotes:
** (I can't post graphics here. Please visit http://rockwelltrading.helpserve.com/index.php?_m=knowledgebase&_a=viewarticle&kbarticleid=42&nav=0 to see the graphics).**

Take a look at today's high of the USD/EUR currency pair:

* The first data source reports it at 1.2164.
* The second dat source shows 1.21595 and
* The third data source reports a high of 1.2166

That's a difference of 6.5 ticks (= $65!!!).

As you know, all indicators and trading rules are based on the following five data:

* Open,
* High,
* Low,
* Close
* Volume

There is no volume information available when trading Forex, so you're already limited when creating a trading system.
And then there's the difference between the data sources, which causes the following problems:

* False Signals
If your trading system is based on the high of the previous day, you would have to enter the market tomorrow at
…. uhm…. 1.2164? ….. or 1.21595? ….. or 1.2166? ….. or maybe something completely different?
* False Fills
Let's say your trading system gave you a signal to enter the market today at 1.2160.
If you'd be using broker No.2 you would have been filled, but what about Broker 1 and 3?
Probably no fill there.

Do you see the problem?

How can a serious vendor offer a trading system, if you get false signals and false fills?

Daily Recap of the Cowabunga System for Monday, 11/03/08

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