A Closer Peek into Our Forex Trade Alerts

DDMarkets Forex Signals

Producing accurate trade alerts or trading signals in the market is not a simple task regardless of the trading strategy that is used. We must have the ability to recognize when the market conditions have changed and adapt in accordance to maintain the success rate of our trade alerts. A recent example of how the market is changing would be EURUSD in the Forex market.

Following the People’s Bank of China (PBOC) Yuan (CNY) devaluation against the US Dollar the currency correlations has been altered. The PBOC actions weakened the commodity currencies while the Euro was able to sustain its gains as CNY was also heavily sold against the Euro.

We have noted the change and alerted all our subscribers to refrain from using any automated trading software or Expert Advisors (EA’s) in the MetaTrader4 (MT4). On the 19 August (approx.) the currency correlation continued to deteriorate, affecting numerous technical trading strategies.

EURUSD / AUDUSD Currency Correlation

Please click on the chart to enlarge:

EURUSD / AUDUSD Currency Correlation

EURUSD / AUDUSD Currency Correlation (daily line charts)

orange line: AUDUSD
black line: EURUSD

If you have been using trading signals, Expert Advisors or allowed any technical traders to manage your account you may have experienced or still experiencing consecutive losses. Traders and trading signals providers that attempted to manage their risk via basket trading probably suffered the most from the deviation.

Technical traders that refused to revise their strategy based on the new market conditions continued to post losses in the market, amazed how their tested strategy is being toyed by the market. Fundamental traders probably had their best month in August 2015.

We find it difficult to believe fundamental traders failed to discover the traditional currency correlation has been violated.

How We Adapted in the Forex Market?

Once we acknowledged the deviation we altered our trading strategy. We knew that many standard technical strategies will simply not work and were able to recognize a false breakout in GBPNZD, which turned to one our best trades in 2015.

GBPNZD Trading Strategy:

Please click on the chart to enlarge:

GBPNZD 4hr Chart 21/08/15

GBPNZD 4hr Chart 21/08/15

GBPNZD Trading Strategy II

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GBPNZD 4hr Chart Profit 24/08/15

GBPNZD 4hr Chart Profit 24/08/15

GBPNZD Full Trading Strategy

This is the main reason why many automated trading signals and EA’s have an average lifespan of 90 days. When the market changes the EA would need to be re-programmed to meet the new market conditions.

Many EA developers lack the understanding or the required knowledge to alter the EA’s. Many private traders that developed their EA know their EA has an expiration date that will be determined by the market.

Nothing is Automated at DDMarkets

As our trading signals our manually generated, which means we are researching the markets and then determine the trade alert, it does provide is and our subscribers with the upper hand under such circumstances. We can easily alter our strategy at any time.

The strategy is laid out and our subscribers have a choice whether to follow the trade alert, modify the entry, stop/take profit or dismiss the trade. In addition, our subscribers can easily manage their risk as opposed to automated trading.  Some traders may opt for a larger trade size for a particular trade alert we have presented or opt for a smaller market exposure (smaller trade size).

The risk management in terms of the trade sizes is in the hands of our subscribers, which serves all types of traders, those that wish to take higher risks and traders that wish to maintain a conservative trading style.

The trading signals or trade alerts are not issued on a daily basis. Our goal is the Return on Investment (ROI) at the end of the month. As the trading signals are based on daily/weekly/monthly charts it will often mean holding the positions for several days, some times weeks.

As frightening as it may sound to some, if we are targeting +400 pips for example it is unlikely to happen in several hours or several days. We may initially be in +100 pips profit and simply wait for the market to acquire our target we set for the trade based on our technical models.

Of course, this does not mean we can simply lay back and twiddle our thumbs until the market reaches the take profit. We are constantly monitoring the currency pair or instrument we issued a trade alert on and realize partials, shift the stop and even exit the trade ahead of the take profit. It is very demanding regardless of the time frame we used although monthly charts require (by nature) less monitoring than the weekly or daily charts.

Due to the above, our subscribers do not have to be next their computer all day. The trading signals are often issued around the daily close (21:00 GMT) so our subscribers already know when to expect a new trade alert. We often alert our subscribers on our intention to issue new signals.

Traders that have the ability to be in front of their computer during the day may benefit from our trade alerts as well as they can be easily combined with their day-to-day positions. Our intraday strategies plan is designed for such traders where we focus solely on the 4hr chart.

This demands the charts to be monitored on an hourly basis or every 4 hours. You may find more details on our spot intraday strategies at the following trading guide. From 9 September, 2015, 15min charts will be added to serve traders that are fond of scalping in the Forex market.

How We Derive Our Forex Trading Signals?

In order to derive a trading signal from the market we use both fundamental and technical analysis. This perfects our entries for a very simple reason. If the technical analysis fails we still have the fundamental analysis to lean on and vice versa.

No technical strategy is bulletproof to losses, which is why all our trade alerts have stops. The fact we are relaying on two separate angles (technical and fundamental) enhances the quality of the trading signals.

The entry price, stop and take profit are all determined via technical analysis. We have little say in determining those price levels on our own. This is why the stop loss and take profits orders will vary from trade to trade.

When we decide to realize partials it is determined by technical analysis as well although we do tend to use fundamental analysis as well. If we fear a certain event will have repercussions on our open trades we will downsize the trade even though the chart provides us with a green light to hold onto the position. This ensures our market exposure or drawdown remains at a minimal level.

We have been monitoring the markets for years in real time, studying the market reactions to economic figures and outside market events. This assists us in recognizing patterns that occurred in the past several years as statistically technical patterns tend to repeat themselves.

Each trading signal we provide is based on multiple time frames aside the time frame we chose to present. This is done to maximize the quality of the trade alert.

Multiple trading strategies are exercised to different time frames such as reversal strategies, continuation patterns, Elliott waves etc. to produce one trading signal. When a trade alert is published we present one strategy, why we expect the price to rise or fall, stop and take profit.

 The above is why more and more forex traders are choosing Digital Derivatives Markets (DDMarkets). If you are no subscribed to our plans we invite you to review our trades performance.

Last Updated on August 19, 2020