There are different time frames available in Forex Trading. The MetaTrader Software has these time frames: 1 minute, 5 minutes, 15 minutes, 30 minutes, 1 hour, 4 hours, 1 day, 1 week and one month.
Each time frame could be represented by ONE candlestick. For instance if we are trading in a 1 hour chart we will have a higher price (in this hour), a lower price (in this hour), an open price (in this hour) and a close price (in this hour). It applies for all the different Time Frames. The time frame is just a perspective used to see different behaviors in a currency pair, but all the additional functions available in the MetaTrader (Indicators, Currencies, Orders, etc) are applied exactly in the same way in all the time frames.
You should be asking about which time frame to use? There is no a general answer to this question, the answer depends on your trading technique. The trading technique is determined by your budget and your Risk Aversion Coefficient. The budget is the initial amount of money you are ready to invest in your Currency Trading. The risk aversion coefficient, using the concept created by Arrow-Debreu, is the reluctance of a trader to accept a deal with an uncertain payoff rather than another deal with a more certain but lower payoff.
Each trader has a preferred time frame and they use one longer and one shorter than this one, for instance if a trader prefers a 1 hour chart, he use the 30 Minutes and the 4 Hours charts because the same technical indicators could give different signals across different time frames.
The personal abilities of each trader will ultimately determine how to create his personal trading technique. There are no two identical trading techniques in the entire world and it is not something that you create in one day.
Saturday, November 14, 2009
METATRADER 5 - CHANGES & UPDATES
In the world of Forex, say the word "MetaTrader", and anyone who has been trading for any length of time immediately knows exactly what you're talking about. Over the past few years, MetaTrader 4 has become one of the world's most popular Forex trading platforms, and for good reason. The sort of features one looks for in any piece of software exists in this program: flexibility, ease of use, and the ability to upgrade. With the ability to include charting, news, alerts, as well as a host of indicators and automated strategies, MetaTrader 4 is now supported by numerous brokers around the world. While the back end support and technology varies, the software is very much the same. The main benefit, however, is the online community dedicated to support, technology, and added features where one can find answers to any and all questions. MetaTrader 5, with its updated features, is the natural next step for this trading software.
In recent years, many traders have begun to utilize the ability to customize or program automated trading strategies in MetaTrader. As trade execution, technology, and trader expertise has increased, this option has begun to appeal to many, as it helps ensure the fundamentals of a given strategy are executed without the influence of emotion. The expedite this process, MetaTrader 5 incorporates a fundamental change in the programming language to ensure more efficient operation, and increased speed in script execution. For those developing Expert Advisors, the all-new Intellisense system offers traders and programmers the ability to incorporate pre-written strings of code to speed the process, as well as a feature to automatically de-bug faulty entries. Additionally, an updated and enhanced strategy tester is included for EA development.
In addition to the major changes in code, MetaTrader 5 also contains some other minor enhancement which make for a more complete trading experience. The program now includes additional indicators, with increased customization options, but more importantly for those focused on the charts, the timeframe settings have been expanded for improved analysis.
With all of these changes, MetaTrader 5 improves on the already excellent MetaTrader 4 platform, but takes all of the features traders want, and expands and improves them on all fronts. As always, Tradeview Forex will continue to offer industry leading support and technology to ensure our clients the best trading experience with the newest technology. Stay tuned for the MetaTrader 5 official release date.
In recent years, many traders have begun to utilize the ability to customize or program automated trading strategies in MetaTrader. As trade execution, technology, and trader expertise has increased, this option has begun to appeal to many, as it helps ensure the fundamentals of a given strategy are executed without the influence of emotion. The expedite this process, MetaTrader 5 incorporates a fundamental change in the programming language to ensure more efficient operation, and increased speed in script execution. For those developing Expert Advisors, the all-new Intellisense system offers traders and programmers the ability to incorporate pre-written strings of code to speed the process, as well as a feature to automatically de-bug faulty entries. Additionally, an updated and enhanced strategy tester is included for EA development.
In addition to the major changes in code, MetaTrader 5 also contains some other minor enhancement which make for a more complete trading experience. The program now includes additional indicators, with increased customization options, but more importantly for those focused on the charts, the timeframe settings have been expanded for improved analysis.
With all of these changes, MetaTrader 5 improves on the already excellent MetaTrader 4 platform, but takes all of the features traders want, and expands and improves them on all fronts. As always, Tradeview Forex will continue to offer industry leading support and technology to ensure our clients the best trading experience with the newest technology. Stay tuned for the MetaTrader 5 official release date.
LEADING AND LAGGING INDICATORS IN FOREX TRADING
There are two groups of technical indicators available in your MetaTrader 4 trading platform: Leading and lagging indicators. In this article we will present to you a brief description of these technical trading tools.
A Lagging indicator is the graphical representation of a mathematical expression that generates signs of a new currency price tendency according to information received in the past. "Lag" is a statistical feature in time series that means that past values of a random variable (currency pairs, in this case) content lagged information that determine the actual value of that variable. The most famous lagging indicator is called "Moving Average"; it is just a mathematical average of the last K prices (determined by the trader according to his preferences). The main concept behind these lagging indicators is using information received in the past to show a new trend price that has begun now.
A Leading indicator is the graphical representation of a mathematical expression that predicts future values of random variable taking all the information contained until the last period of time. Your Forex trading platform has many Leading indicators; in a past article, we gave a description of one of the most famous leading indicators: The stochastic oscillator; as you should remember this indicator gives you two bands, if one of these bands is broken you have a potential sign of an overbought or an oversold currency market. The main concept in these indicators is that "the present is as the past, in probabilistic terms", it means that the probability of an increase of the price above a determined value is the same today than yesterday. This statement is a source of dispute among many mathematicians across the world; in a future article we are going to review some statistical tools to review this statement in Forex Trading.
You must know both, leading and lagging indicators, to determine if you prefer to use only one or both kind of technical indicators. Certainly, it is not clear that leading or lagging indicators have better results, you must discover it!
A Lagging indicator is the graphical representation of a mathematical expression that generates signs of a new currency price tendency according to information received in the past. "Lag" is a statistical feature in time series that means that past values of a random variable (currency pairs, in this case) content lagged information that determine the actual value of that variable. The most famous lagging indicator is called "Moving Average"; it is just a mathematical average of the last K prices (determined by the trader according to his preferences). The main concept behind these lagging indicators is using information received in the past to show a new trend price that has begun now.
A Leading indicator is the graphical representation of a mathematical expression that predicts future values of random variable taking all the information contained until the last period of time. Your Forex trading platform has many Leading indicators; in a past article, we gave a description of one of the most famous leading indicators: The stochastic oscillator; as you should remember this indicator gives you two bands, if one of these bands is broken you have a potential sign of an overbought or an oversold currency market. The main concept in these indicators is that "the present is as the past, in probabilistic terms", it means that the probability of an increase of the price above a determined value is the same today than yesterday. This statement is a source of dispute among many mathematicians across the world; in a future article we are going to review some statistical tools to review this statement in Forex Trading.
You must know both, leading and lagging indicators, to determine if you prefer to use only one or both kind of technical indicators. Certainly, it is not clear that leading or lagging indicators have better results, you must discover it!
AGGREGATED VALUE, KEYNES AND CURRENCY TRADING
One of the most popular critiques to Forex Trading, used by Economists from many countries across the world, is based on this question: Is Forex economic wealth?
The economic argument that supports this critique is that Forex trading is a Zero sum game, so there is not aggregated value in this market. Economists quantify the Gross Domestic Product (GDP), as the total sum of the aggregated value of one year in a specific country. For instance if a shoemaker buy leather for 10 Dollars and produce shoes for 50 Dollars, the aggregated value in this case is 40 Dollars.
The absence of aggregated value argument used by Anti-Forex Economists has one problem: Even if Forex Trading is a Zero sum game, it is not the only aspect to be considered in a business evaluation. We will use Keynes theory to reject this Anti-Forex argument.
John Maynard Keynes wrote in 1935 one of the most famous books in the history of Economic Theory: The General Theory of Employment, Interest and Money. In this book Keynes uses this argument "Money is an asset with special functions in the economic system. Specifically, the Financial Markets supply funds from over liquid sectors to those with lack of money for investment. Even if there is a gap between real and financial transactions, Financial Markets are an essential part of any Economic structure in the world"
Keynes presents an important function of Financial Markets, he clearly recognizes the gap between real and financial transactions and the potential absence of aggregated value, but he strongly believed in the necessity of powerful financial markets to transfer money from sectors with surplus to sectors with deficits of money.
Currency Trading markets are a potential opportunity to invest your money and work hard to obtain positive results; obviously there are winners and losers, just like any other business in the world, but Forex as a Financial Market has that favorable characteristic described by Keynes. Unfortunately this argument is not considered by Anti-Forex economists and they present a biased perspective of the problem.
The zero sum argument is not the only one aspect to be considered in a business evaluation. Forex could be Economic Wealth, it depends on you!
The economic argument that supports this critique is that Forex trading is a Zero sum game, so there is not aggregated value in this market. Economists quantify the Gross Domestic Product (GDP), as the total sum of the aggregated value of one year in a specific country. For instance if a shoemaker buy leather for 10 Dollars and produce shoes for 50 Dollars, the aggregated value in this case is 40 Dollars.
The absence of aggregated value argument used by Anti-Forex Economists has one problem: Even if Forex Trading is a Zero sum game, it is not the only aspect to be considered in a business evaluation. We will use Keynes theory to reject this Anti-Forex argument.
John Maynard Keynes wrote in 1935 one of the most famous books in the history of Economic Theory: The General Theory of Employment, Interest and Money. In this book Keynes uses this argument "Money is an asset with special functions in the economic system. Specifically, the Financial Markets supply funds from over liquid sectors to those with lack of money for investment. Even if there is a gap between real and financial transactions, Financial Markets are an essential part of any Economic structure in the world"
Keynes presents an important function of Financial Markets, he clearly recognizes the gap between real and financial transactions and the potential absence of aggregated value, but he strongly believed in the necessity of powerful financial markets to transfer money from sectors with surplus to sectors with deficits of money.
Currency Trading markets are a potential opportunity to invest your money and work hard to obtain positive results; obviously there are winners and losers, just like any other business in the world, but Forex as a Financial Market has that favorable characteristic described by Keynes. Unfortunately this argument is not considered by Anti-Forex economists and they present a biased perspective of the problem.
The zero sum argument is not the only one aspect to be considered in a business evaluation. Forex could be Economic Wealth, it depends on you!
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