Problems between simulation results and actual trading result. Below are some issue that need to be address.a) Bid-Ask spread.
This spread is normally between 2 to 4 pips for major currency pair USDJPY, EURUSD, USDCHF, GBPUSD, etc but when there are news and major movement, the spread will increase to 5 to 9 pips and 10 - 15 pips and even 16+ pips and more. This means when you buy, you already receive negative 16+ pips on that trade.
Simulation does not cover this spread as the bid-ask is always base on
the latest spread in the MT4 server. Thus, news created wide pips spread
are not able to capture and the buy-sell trade are not accurately
simulated. This change in pips has to be taken into account when
simulating by taking 2 measures. Number 1 is to set the spread limited
in your EA to below 8 pips to execute a trade. Anything more then 8 will
not execute any trade. Number 2 is to set your profit or trigger level
-9 pips then your usual profit level when simulating. This will make
sure the spread is take into account.b) Server availability.
This is limited to the market demand, as more trade enter, the server will be overloaded and cause server busy when you want to buy or sell a currency. Then you have to execute the trade again. In case, the spread will change and affect your trade profits. Different server will have various spread and ask at the same time.Server busy will cause your trade to be invalid.
Simulate does not cover the server busy. So you have to code in a server busy reply from server and to wait 1 or 2 seconds before retry executing the trade again using "IsTradeContextBusy()". This will allow your EA to retry again when encounter server busy. You may want to have up to 5 times or 1 minute of retry.
c) Log in. This is due to the internet connection with the MT4 server. The account is consistently ping to maintain its loggin status. When internet connection is disrupted, the auto log in will continue and at times you will see a couple of login entry in your journal.
Simulate does not over this login portion. So you have to code in to get data from the server via "RefreshRates()", This will allow the EA to try login your account prior to executing any trade.
Lastly, if you take into account the above issue, your simulation results can be a benchmark to your live trading result. Thank you
While most books on trading deal with general concepts and shy away from specifics, Forex Patterns and Probabilities provides you with real-world strategies and a rare sense of clarity about the specific mechanics of currency trading. Leading trading educator Ed Ponsi will explain the driving forces in the currency markets and will provide strategies to enter, exit, and manage successful trades. Dozens of chart examples and explanations will guide you each step of the way and allow the reader to "look over the shoulder" of a professional trader hard at work at his craft.
This book provides traders with step-by-step methodologies that are based on real market tendencies. The strategies in this book are presented clearly and in detail, so that anyone who wishes to can learn how to trade like a professional. It is written in a style that is easy to understand, so that the reader can quickly learn and use the techniques provided.
Editorial Reviews
From the Inside Flap
In recent years, traders have turned to the foreign exchange market
expecting to capture substantial profits. While the high availability
of leverage within this arena can improve your chances of making money,
ultimately the success of your endeavors depends upon how well you
understand and operate within this market. Nobody knows this better than
author Ed Ponsi. As a professional trader and leading educator of
traders, Ponsi has developed a proven approach to trading today's forex
market, and now, with Forex Patterns and Probabilities, he wants to
share it with you.
While most books on trading deal with general concepts and shy away from specifics, Forex Patterns and Probabilities provides you with real-world strategies and a rare sense of clarity about the specific mechanics of currency trading that will allow you to take advantage of both trending and range-bound markets.
Written in a straightforward and accessible style, Forex Patterns and Probabilities will help you make the most of your time in this market. You'll be introduced to a variety of elements that are essential to forex trading success and discover the best ways to enter, exit, and manage trades. Dozens of chart examples and explanations will guide you each step of the way and allow you to "look over the shoulder" of a professional trader hard at work at his craft.
Divided into four comprehensive parts, this detailed guide:
While most books on trading deal with general concepts and shy away from specifics, Forex Patterns and Probabilities provides you with real-world strategies and a rare sense of clarity about the specific mechanics of currency trading that will allow you to take advantage of both trending and range-bound markets.
Written in a straightforward and accessible style, Forex Patterns and Probabilities will help you make the most of your time in this market. You'll be introduced to a variety of elements that are essential to forex trading success and discover the best ways to enter, exit, and manage trades. Dozens of chart examples and explanations will guide you each step of the way and allow you to "look over the shoulder" of a professional trader hard at work at his craft.
Divided into four comprehensive parts, this detailed guide:
- Explains the playing field of the forex market, using powerful metaphors that relate trading scenarios to situations in everyday life
- Outlines several specific trading strategies—including the FX-Ed Trend Technique—designed for trending markets
- Delves into a variety of non-trending trading techniques—from the volatility-based Squeeze Play to the hedge fund–inspired Interest Rate Edge—which are all based on unique market tendencies
- Offers an insider's view on how to emulate the behavioral patterns of successful professional traders—and how to escape the mindset of the amateur
- And much more
From the Back Cover
Praise for Forex PATTERNS & PROBABILITIES
"Ed has the experience, he has the knowledge, and he has the ability to wrap it all up into one of the most useful and insightful books on trading that I've read. You're going to be a better trader with the help of this book."
—Rob Booker, independent currency trader, and author of Adventures of a Currency Trader
"This book is a must-read for any equities trader who is trying to learn the ins and outs of the forex markets. Ed has the rare gift among traders and educators to take complex trading theories and break them down into interesting and easy-to-digest trading concepts. I have personally had the benefit of studying live with Ed, and I found this book a great review of my live courses with him and now use it as my main forex reference book in my trading library. Ed you truly are the rock star of the FX markets. Well done!"
—Michael J. Di Gioia, cofounder, the Results-Driven Financial Network
"Forex Patterns and Probabilities is one of the best practical forex trading books I have read, and I have read a good many forex books! Ed thoroughly teaches those areas that cause most difficulty for new traders, from economic fundamentals to technical trading to the psychological aspects that are so important but ignored by so many new to trading. Peppered throughout with anecdotes from the trading and non-trading world, Ed's easygoing, homespun style gets his message across very effectively. This work is destined to become essential reading for both new and established traders."
—George Hallmey, Director, www.Clickevents.com
"Ed Ponsi is a complete teacher! Forex Patterns and Probabilities covers it all for forex and trading in general. This book will teach you the foundations, the tactics, the pitfalls, and the 'real' world of forex. As Director of Education for the Online Trading Academy, I understand the importance of education and trading knowledge. . . Forex Patterns and Probabilities, while focused on forex, allows the reader to see the nuances of trading in general—fundamental, technical, psychological, plan management, and a strong, healthy dose of risk management and discipline."
—Mike McMahon, Director of Education, Online Trading Academy
"Ed has the experience, he has the knowledge, and he has the ability to wrap it all up into one of the most useful and insightful books on trading that I've read. You're going to be a better trader with the help of this book."
—Rob Booker, independent currency trader, and author of Adventures of a Currency Trader
"This book is a must-read for any equities trader who is trying to learn the ins and outs of the forex markets. Ed has the rare gift among traders and educators to take complex trading theories and break them down into interesting and easy-to-digest trading concepts. I have personally had the benefit of studying live with Ed, and I found this book a great review of my live courses with him and now use it as my main forex reference book in my trading library. Ed you truly are the rock star of the FX markets. Well done!"
—Michael J. Di Gioia, cofounder, the Results-Driven Financial Network
"Forex Patterns and Probabilities is one of the best practical forex trading books I have read, and I have read a good many forex books! Ed thoroughly teaches those areas that cause most difficulty for new traders, from economic fundamentals to technical trading to the psychological aspects that are so important but ignored by so many new to trading. Peppered throughout with anecdotes from the trading and non-trading world, Ed's easygoing, homespun style gets his message across very effectively. This work is destined to become essential reading for both new and established traders."
—George Hallmey, Director, www.Clickevents.com
"Ed Ponsi is a complete teacher! Forex Patterns and Probabilities covers it all for forex and trading in general. This book will teach you the foundations, the tactics, the pitfalls, and the 'real' world of forex. As Director of Education for the Online Trading Academy, I understand the importance of education and trading knowledge. . . Forex Patterns and Probabilities, while focused on forex, allows the reader to see the nuances of trading in general—fundamental, technical, psychological, plan management, and a strong, healthy dose of risk management and discipline."
—Mike McMahon, Director of Education, Online Trading Academy
About the Author
Ed Ponsi is the President of FXEducator.com and is the former chief trading instructor for Forex Capital Markets. He is an experienced professional trader and money manager who has advised hedge funds, institutional traders, and individuals of all levels of skill and experience. Ponsi is featured on the FXEducator.com DVD series, Forex Trading with Ed Ponsi. He is a dynamic public speaker who has appeared on numerous television and radio programs, and is a frequent guest lecturer at trading conventions and seminars around the world.Forex Patterns and Probabilities: Trading Strategies for Trending and Range-Bound Markets (Wiley Trading) Click here to read amazon customer reviews and rating
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