Williams %R indicator – another excellent technical trading tool

Many stockmarket technical analysts and chart watchers use the well known Relative Strength Index (RSI) as a reliable overbought/oversold indicator, but there are various other highly useful tools out there, and an excellent and simple one is the Williams Percent Range technical indicator.

This was developed by Larry Williams, an expert in trading and systems analysis, and is a slightly different way of evaluating overbought and oversold market conditions. As with the RSI the %R always falls between a value of 100 and 0 (it is actually calculated as a negative figure in some software systems), and two horizontal lines can normally be defaulted to represent the -20% and -80% overbought and oversold levels. RSI watchers often use 30 and 70 as the equivalent levels, but these are not set in stone for either indicator.

The Williams %R formula

The Williams %R indicator uses highs and lows within its calculation, so this is a bonus, and it is inverted by multiplying it by -100 to give the ‘low’ and ‘high’ figures.

The formula which is preset on most software systems is:

((Highest high value (High, Number of periods chosen) – Close)/(Highest high value (High, number of periods chosen) – Lowest low value (Low, Number of periods chosen))) * -100

Williams’ original analysis focused on 10 trading days as the number of periods chosen to determine a market’s trading range, and then the calculation was made by reference to where the current day’s closing price fell within that range.

There are some similarities with another well known indicator, the Stochastic, (which can be used both as a trend indicator or an overbought/oversold measure), but the Williams %R does not have any smoothing (or fast and slow lines if you like)

A value of 0% on the Williams %R shows that the closing price is the same as the period high, but often the indicator will remain very close to 0% for days on end in a strong bull move where the closing prices are near to period highs. A value of -100% shows that the closing price is identical to the period low, and the opposite scenario is common here.

What this indicator really does that is very good is to show the difference between the period high and today’s closing price within the trading range of the specified number of periods chosen.

It tends to work best in trending markets, and just as with the RSI it is possible to look for divergences between the %R and underlying price movements.

What length of time period to use

Although the indicator was developed on a ten day period length, many software systems now use a 14 day default (same as the RSI). As with all technical analysis, there are no hard and fast rules, and the shorter the period chosen the more volatile the outcome. To achieve less whipsaw action, it is best to use a wider periods range, but this of course results in less signals.

Original trading rules

Larry Williams set the following original trading rules for the indicator:

1 Buy when %R reaches -100%, and five trading days have passed since -100% was last reached, and after which the %R again falls below -85/95%.

2 Sell when %R reaches 0%, and five trading days have passed since 0% was last reached, and after which the Williams %R again rises to about -15/5%.

Some technical analysts simply suggest selling when %R reaches -20% or lower, an overbought level, and buying if it goes below -80%. This is too simplistic, and CFD trades will know that using any overbought/oversold indicator in such a standalone manner is doomed to failure.

The reason is that especially on a trading range breakout, a new trend can immediately become highly overbought and remain so for a long time. The same goes with a big fall (say following a profits warning) which can see a share remaining oversold for a long time while the price continues to trend down – you do not want to be buying then!

It is therefore best, as with all these types of indicators, to wait for the underlying price to change direction before going with the trade. You could quite easily combine the Williams %R with a MACD or TEMA indicator to give you more comfort that you are trading with the trend.

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Why Us Citizens Cannot Open Account With Overseas Brokerages and How To Handle It

It is no secret that a good number of international Forex brokers have regulations that restrict US traders. A good number of international Forex brokers operating offshore do not accept US residents to open account with them. A good number of these brokers are the regulated ones. The reason for this will become very clear as we tackle every reason. There are strict regulations that limits doing business with US citizens. Most of these regulations originate from the US government. Fortunately, these regulations do not completely stop international brokers from accepting us citizens. There are a good number of offshore international Forex brokers that accept US citizens. Below is the primary reason why some offshore international Forex brokers do not accept US citizens.
Dodd-Frank Act
The Dodd-Frank Act is the most recent federal statute which president Obama signed into law. It first became operational on July 21, 2010. It is a reform agenda which is purely developed to regulate financial market. The act brought forth new rules that are designed to regulate all financial markets including stocks, futures, futures, options and Forex.
Dodd-Frank Act requires that every Forex brokerage company who wants to do business with US citizens must first be registered with both Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA). Many international Forex brokers find this very difficult for them. The recent statistics shows that a good number of such international brokers are still not registered with these two us regulatory bodies. These are mostly legal and regulated offshore brokers. To avoid the paper mess, they stop accepting us citizen to open account with them. It is easier for them to decline the US citizens than incur the unforeseen expenses.
The primary reason that has forced international offshore Forex brokers to decline US citizens is the implementation of Dodd-Frank Act. There are also other reforms and changes in the financial market services that US government have provided barring their citizens from opening account with international brokerage companies. Several of these regulations have direct link to CFTC activities. The US government have directly implemented some of them. Besides this, the Dodd-Frank Act has many other disadvantages. Due to this regulation, many foreign banks not able to continue accept US clients. Secondly, most Forex brokerage services have significantly changed the minimum account trading, leverage, and spread levels for US citizens.
The Solution
Despite the restrictions imposed by the Dodd-Frank Act, some offshore international Forex brokers still accept us citizens. If you are a US citizen, there are chances you can open account with such international brokers not registered by US regulatory bodies – NFA and CFTC. However, this is done under certain different conditions. Such offshore brokers are only allowed to accept US clients only under their US -based affiliate brokerage firms.
Conclusion
The regulation of offshore Forex brokerage companies requiring them to be registered with the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) before accepting us citizens has both its advantages and disadvantages. The primary advantage is that the regulation ensures the safety of us residents’ funds. This is the intention of the regulation. Besides, it is expected that the US State Treasury will enrich itself from the regulation because the invested funds cannot leave the USA borders.
However, the regulation has other several disadvantages to both the US citizens and government. First, the services of international brokers cannot be enjoyed by US citizens if such brokers are not regulated by US government. Secondly, the brokers who currently accept us citizens have substantially raised their minimum capital requirement. As a result of this regulation, US citizens are now subjected to unfavourable trading conditions; low spread and reduced leverage.

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Why Forex Trading Copier Software Is The Next Step Forward For Traders

There are many financially sound and reliable forex currency trading brokers available on the internet today, and with some of the laws implemented in the last few years regarding the minimum amount of assets that a brokerage company is allowed to operate with, many of these forex brokers are safe to work with. So how do you pick which one you would like to work with out of all your choices? One good way is to look at the trading platform that they are offering.
Not all forex trading platforms are created equal, and not all of them have the same capabilities. Depending on the sort of trading you do there are certain types of trading software that will be more appropriate for you to use. For example, if you have a trading strategy that is mostly based on fundamental analysis and you like to trade on the days when there are big news announcements or financial indicator numbers that are released, it will be important that your trading platform has a news feed built into it.
Many forex traders prefer to trade based on technical analysis, in which case the price charting package that your broker offers will be very important for you to consider. Some traders even like to use their own proprietary technical indicators, but regardless of whether your trading strategy is based on proprietary technology, you will want to take a careful look at the charting package that is built in to the trading platform. Certain forex brokers will also offer you an independent charting package which can also fulfill the needs of your technical analysis trading strategy.
There are some people that do not want to do any sort of manual trading at all, in which case it will be very important that your broker offers you at least one forex currency trading platform that has automated trading capabilities. One of the most popular automated forex trading platforms today is called Metatrader and it has support from many of the major brokers as well. Automated trading using this software will require a smaller custom piece of software called an expert advisor, which takes a technical analysis trading system and makes it available in algorithmic form for automated execution.
If you are interested In Forex, you may want to know what Meta Trader Programming is. This type of program is a program that is used to trade Forex. It is written in the MQL4 language which is specifically written for the Forex trading field. It is an automated system that will allow automated trading activates on this particular platform. There are Expert Advisors that are included and can be created for situations and each one is unique as to the rules that are followed for their employment. These advisors will allow you to have a very strict system in place which disallows emotional trading.
These parameters are designed to work within certain rules that will keep you from crippling your trading account. They are unmatched for discipline when trading and have more parameters than a human could keep up with. These advisors can be brought in to work in any logic that you can think of thanks to the programming language. With this language, you can program your own indicative source and call it from an Expert Advisor. Depending upon application, there are many different types of these advisors. Some are designed to be active 24/7 while other s are less active depending upon programming.
If you are looking for a MetaTrader programmer, what do you need to look for? Well the first thing that you will need to look for is a competency in the MQL-4 language. This is the language that the MetaTrader software program is written in. The programmer must also be fluent in creating Expert Advisors for the system in question. They must be able to create a mechanical system that will fully automate the system. They need to be specialists in coding of these indicators and expert advisors for the MT4 platform. They should have some API, C++ or Java experience as well.
MetaTrader has its own language which is MQL-4. This program has a built in language that allows you to create what you need and to integrate it into your MetaTrader platform. Skilled programmers will be able to customize your MetaTrader to your specifications with the set limits that you prefer as well as the custom indicators that you need in order to make a profit with Meta Trader. They will also be able to fully automate the program allowing it to take advantage of certain disciplines that may sink a human otherwise.
A MetaTrader program doesn’t deal with the human emotions, just the scripts that it has been programmed with and that will prevent you from sinking your business. By programming everything in as specified, you will have one killer system that can make you money and that is customized only to you and what your needs are as a trader of Forex. So a quality programmer can make the difference between success and failure when it comes to trading Forex. The program has to have specified parameters in order to succeed and only you know what they are. This is what you should look for when looking for a MetaTrader Programmer.
MT4 trade copier software can actually be used in Forex trading to duplicated trades between multiple MT4 accounts, this is very effective in making a variety of high standard trades thus resulting in more profits. MT4 trade copier software can also be used to reverse the trades and make your lose trading strategy become a victorious one. This kind of software is vital to any Forex traders success as it allows them to make regular trades from multiple accounts based on high standard trading deals. Any kind of software which can automate processes and act quickly upon good trading deals from multiple accounts will boost your profits and effectiveness in the market. MT4 trade copier software is an essential piece of kit for any Forex trading manager.

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Which is the best performance forex expert advisor?

MT4 is widely used for Forex trading and one feature I personally like about metatrader 4 is the MQL programming language that comes with it. This programming language allows you to codes your favorite profitable trading rules into programs called expert advisor and let it run on your computer automatically.
Expert Advisor
MQL4 is basically a programming language that is similar to C and it is used for coding strategy into program. The program which can be set and run in MT4 are called Expert Advisor or EA. Expert Advisor is lines of codes that run on your forex trading account and simulator strategy tester is used to test the EA using historical price data. The results report from the strategy tester is used to fine tune the strategy and in order to select the best Forex trading program EA, below are some indices that need to be check.
Return on Investment (ROI)
This is a measurement of the price capital that you invested in your Forex trading with the profit return that you gains over a certain time which is a measurement against it. A 100% return over 1 year is a very good indicator that it able to give you 1 dollar profit to 1 dollar invested. When compare to bank saving account interests and stock market and unit trust, 100% return is many times better. For Expert Advisor, minimum 20% return annually is desirable. Any figures less then that is not worth your investement.
Profit Factor
This is calculated by dividing the total profit by total losses. A simple indicator but yet a powerful indices that show over all the time, how profit is the program. A profit factor of 2 means you earn 2 dollars for every 1 dollar you loss. Most program gives profit factor of 1.5 to 2. If you find software that gives more then 2 or 2.5, please grab them immediately. You will never loss out on this measurement.
Simulation period
The strategy tester can define custom simulation period and it is suggested to have at least 1 or 2 years of back testing performed by the strategy tester. As Forex trading involves fundamental trading and news releases that will move prices, using at least 12 months or more will make sure the software is tested for all yearly releases from major government organization and ministry.
Total trades executed
This is similar to the simulated data used. Total numbers of trades are expected to be more then 50 or 100 in order to ensure that your program works without much error. Those software that uses scalping strategy and martingale system would yield more trades then those software that trigger using hourly or daily chart and bars. But 50 trades is a good rule of thumb for software program.
Maximum Draw Down
When the program is trading, any point of time by calculating the existing trade account minus the lowest floating account, this is the Draw Down and for all the time, the lowest point which is the maximum draw down is desirable to be smallest, which is less then 20% at all times. This indicates how your trading account will float to the lowest and how you calculate your margin call required. A high draw down will required you to have a bigger margin to avoid margin call.
In summary, look for expert advisor software that gives >20% ROI, >2 Profit factor, >1 year simulation period, >50 trades and <20% maximum draw down. Source: http://ift.tt/1A8L8Dy

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What Is Forex Trading? Can I Make Money From It?

Forex is an acronym for foreign exchange, a market where people exchange the currency of one country for the currency of another in order to do business internationally. Typical situations in which currency exchange is necessary include payments of imports and exports of purchases and the sale of goods or services between countries. Forex is also called the cash market or spot interbank market. The spot market means trading on the spot, at whatever the price is at the moment

Prior to 1994, the Forex retail interbank market for small individual speculative investors or traders was not available. A speculative investor, or speculative trader, is one which looks to make a profit on price movement in the market and is not looking to hold onto any currency long-term. But with the average minimum transaction size of $1,000,000, smaller traders were all bit excluded from participation in this market. Then in the late 1990s, retail market brokers (companies that facilitate the trades for speculative traders) were allowed to break up the large interbank units and offered individual traders the opportunity to participate in the Forex as we know it today.

Forex is considered the largest financial market in the world. The term market refers to a place where buyers and sellers are brought together to execute trading transactions. More then $1.5 trillion U.S dollars are traded daily on the Forex. By comparison $300 billion dollars is traded daily on the U.S Treasury bond market and $100 billon dollars is traded daily on the U.S stock market, for a total of $400 billion dollars per day. Forex trades nearly four times that volume daily, exceeding the daily combined activity of all the other financial markets

Forex has no physical locations – transactions are placed via the Internet or telephone – but is composed of approximately 4,500 international world banks and retail brokers. Individual traders wanting to profit by speculating on price changes can only access this market through Forex broker, such a I-TradeFX.com. It is a good practice of a speculative trader to only deal with Forex brokers that are regulated by the governmental bodies in their respective countries.

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Understanding the Inconstancy of United Kingdom Gas Prices

Back in the days when the UK was self sufficient for natural gas few factors changed gas prices. They were weather and demand, nowadays, the UK gas market has become more complicated and several factors have a head-on effect on prices.

With the decline of North Sea gas production the UK went from being self sufficient and an exporter of natural gas to being a net importer. This has induced many changes to the United Kingdom gas market, for the most part in business and commercial gas prices buoyancy.

Since 1998 when the first pipeline between the United Kingdom and Europe was opened UK gas prices were automatically devoted to European oil indexed prices. Since then, UK gas prices were determined by marginal transactions. Basically if oil prices raise so does UK gas prices.

Recently a new factor has come into play which brought a more global component to business and commercial gas prices, the imports of LNG (liquefied natural gas) cargoes. According to market experts, over time LNG imports could account for 50% of total UK gas supply which will make UK gas prices compete with American and Asian markets.

The largest issue with LNG imports nowadays is where to store it so a number of LNG import terminals are under construction, with two new large terminals in Wales due to be completed later this year and further expansion at Isle of Grain near London.

Climate and demand still have their influence in business and commercial gas prices. But this winter gas traders saw a different sequence of events; with temperatures way below seasonal average which pushed gas for heating consumption to sky high levels, wholesale gas prices dropped.

Normally with the colder climate gas prices tend to rise due to an increase in demand. This winter a steady supply from Norway and the Netherlands plus strong LNG imports kept the gas prices at low levels.

“Before trading gas in the UK Market was rather simple. Now things have become more complex and we have to keep an eye on several factors in order to deliver the best prices for our costumers” stated a business gas broker.

To sum things up, natural gas is an important factor of the UK fuel mix in electricity generation and it has great influence in United Kingdom energy prices.

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Understanding Forex Signal Service Time Zones

For an average trader, forex trading time zones can be intimidating and difficult . Like many others , when I started out trading this 24 hour global, cash market , the time zones issue never made a whole lot of sense to me . Over time that would change and here I’m going to show you some of the basics as to how I handle the 24 hour market and hopefully this will give you some help when getting prepared for another big trading day.

You first need to think about where you’re living , or where you plan to do most of your forex signal service trading from. This alone is the biggest factor affecting the way you look at this 24-hour market. For example, let’s say that you live in California on the West Coast of the United States in the Pacific Standard Time (PST) zone which is three hours behind East Coast time in New York.

Now that we know the trading will be done in California, which is 3 hours behind New York , we can begin to plan our forex signal service trading day. In this never sleeping 24-hour market (but gets very quiet on weekends and major international holidays such as New Years ) the trading day stops and resets with the New York financial centers closing at 5pm or close to that in Eastern Standard Time and the banking centers in the Far East like Hong Kong and Tokyo about the same time are opening and starting a new day . Keeping this in mind it’s best to have your trading charts set up so that the candle or daily bar use use closes each day at 5pm EST .

So now we’ve determined that we are trading from the West Coast in the US which happens to be three hours behind EST in New York and we know when the market resets and stops to start a new day . Next we have to decide when to prepare and plan for the next day . If California is where you live, as in our example here , and you like staying up late then the London session is what you may want to prepare to trade from about 1am Pacific Standard Time to 4am Pacific Standard Time . Or, maybe you enjoy your sleep and want to doze through the London session but getting up early is no problem , at about 4am Pacific Time so you’re able to see the London session end and prepare for the start of the New York session which gets going about 5:30am Pacific Standard Time, or 8:30am Eastern Time . Maybe you don’t like to get up early and so you’d prefer to be a middle of the day trader ; this is not a problem. Simply wait until about 2pm Pacific Standard Time when the day begins in Tokyo and you can do your trading during this session .

Now you clearly have knowledge of the major forex trading time zones and you can accordingly plan your days . Keep in mind , planning and being prepared are the most important factors, yet often overlooked of success in this business and any other business . Thinking this through you should be able to plan your forex signal service day.

Andy Owings – Drummond Geometry Master Analyst. Author of the Drummond Geometry Daily Forecast for Forex Signal Service & Futures Trading. Andy makes specific trade recommendations every day for 8 popular forex and futures symbols using the legendary market analysis techniques developed over a forty-year period by Charles Drummond and Ted Hearne. Drummond’s forex trading methods were featured in the first chapter of David Keller’s book published in 2007 by Bloomberg Press, “Breakthroughs in Technical Analysis – New Thinking From the World’s Top Minds” http://ift.tt/2h30N3L

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