Free Trader Tools – Currency Strength Meter
=== Pretty nice handy free tool I have been using for ages, shows me at a glance the relative strength of the main currencies. Great tool from Henry Liu! ====
Currency Strength Meter Explained
Here’s a brief description of CSM: a standalone program that calculates over 30+ currency pairs in real time and displays an at-a-glance view of the strengths and weaknesses of all major currencies, namely the USD, EUR, GBP, CHF, AUD, JPY, and NZD. The Strength readings vary from 0.0 to 9.0, with 0.0 being the weakest and 9.0 being the strongest.
The color code used in the meter is pretty self-explanatory, with:
BLUE as weak (0.0 ~ 2.0)
YELLOW as normal (2.1 ~ 5.0)
ORANGE as strong (5.1 ~ 7.0)
RED as critical (7.1 ~ 9.0).
For more Information check out: SOURCE
Important: This is informative , Use under your responsablility
Money Management – Martingale Probability Theory (Anti-Martingale) & Video
Martingale Probability Theory
Martingale probability began as a popular betting theory in 18th century France. The basic premise of the theory was simple enough: In a game of coin flips that pays 2:1 if the coin comes up heads, but takes the bet money if the coin comes up tails, you should bet double on every loss so that you would automatically win back any losses.
Problems with the Initial Model
Clearly, the game assumes that the player has no limit on financial resources or time. In a practical setting, this game does not work, because as the player bets on each subsequent iteration, he exponentially reach poverty. Although the game does break even over a long enough time line, there is no way to be certain that this will happen quickly enough for the player to adequately recover his losses. However, the idea led to several other theories.
Proof Against Betting Theories
Paul Peiree Levy did much of the work toward proving that successful betting theories were impossible to create. The idea was to illustrate that betting games, in general, are fools’ games. There is no way to create a theory that will allow the player to win a majority of the time. Before his work in fields like Martingale Probability, it was not commonly accepted that gambling was essentially stacked against the player.
Exponential Nature of Losses
- The main interest that mathematicians still have in Martingale Probability is the exponential rate of loss. The idea that can be inferred from the equations that define a Martingale set is that the expected value of the next number in a set of observations can be assumed to be equal to the last observation in the set. In other words, in a fair game, a gambler can assume his losses will be roughly between plus or minus the square root of the number of steps.
Polya’s Urn Model
- George Polya came up with an example to explain this concept using a jar (or urn) containing red and blue marbles. The urn randomly and unbiasedly expels a marble of a given color. That marble is put back into the jar with another marble of the same color, which essentially has the same mathematical model as doubling down the gambler’s bet on any given game. The problem is that it has the false illusion of affecting the outcome.
Trader Quote # 21
The Great Sun Tzu 5 Steps for War (Trading)
Trading Sun Tzu -“Military Method, we have,
2. Estimation of Quantity
4. Balancing of Chances;
5. Victory.” Sun Tzu
==== Definitely One of the Best Quotes for Trading – Simple & Beautiful! . For those that don’t have a trading plan, look no further! Lolz 🙂 . This is a 5 Step Process for Trading and more!
1. Measurement – I would see it as to complete beforehand all your technical & fundamental analysis in the Monthly, Weekly , Daily, 4 hrs, 1hrs ,30 min Time-frames to see the big picture , the “conditions of the battlefield”.
2. Estimation of Quantity – How many Troops will you deploy , where & why? Great money management is the key here. Money management as a per troop basis is a great way to “see” and “feel” your risk. This must be thought before the battle begins and used when the battle is fought!
3.Calculation – For me it is the entry / exit strategy to implement (setups). When is the most favorable moment to deploy your troops, if you know what I mean?
4. Balance of chances – Sounds similar but different in my eyes, I would ask myself if the probabilities are on my side. This is where I would do a Probability chart study analysis.
5. Victory – Love this One! Because you would think Victory is translated to Profit?!. To me Victory is to fully following your System Plan even if it results in a pre-calculated loss! Enjoy. Dimitri Feria ====
What do you think? What do this quote mean for you? Any comment or experiences you would like to share?