What You Think

FXCM broker entered the market with a new micro trading opportunity — FXCM Micro Forex broker. As many new traders prefer to trade with the small amounts of money, such brokers as FXCM can’t fulfill their needs. FXCM Micro looks like a really good opportunity for the low-budget traders. It offers $25 minimum account balance (with a maximum cap at $5,000) with 0.01 lots minimum for the position traded volume. Leverage is fixed at 1:400 level which is nice for the risky players with a little capital, but not many experienced traders would like tolerating the risk connected with such a leverage. 1.5 pips average spread on EUR/USD allows some really interesting short-term trading strategies.

Of course, it’s hardly a good broker choice for the professional traders or those who wish to start out with a big real account capital and a lower risk setting. Deposit and withdrawal can be done only via the credit card with this broker. Anyway, FXCM Micro is one of the few Forex brokers that offer micro Forex accounts and are regulated by the NFA.

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: hold.
EUR/JPY trend: hold.

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: hold.
EUR/JPY trend: sell.

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: hold.
EUR/JPY trend: hold.

Today I offer you a new free ebook to download from my site — A Six-Part Study Guide to Market Profile. Actually it’s not very new — it was written in 1996 by the Chicago Board of Trade professionals. It thoroughly explains the one of the most innovative but not too popular trading concept — the market profile. First it will help you understand what market profile is and how it can help in your trading. The good thing here that it doesn’t matter if you are a long-term or a short-term trader. And although it was written for the commodity traders, it can still be easily applied in the Forex market. Then it will teach you how to use the market profile to monitor both short-term and long-term trends. This book will also tell you how to relate the daily trading volume with market activity and benefit from it. Carrying out the actual trading decisions relying on the market profile data is described in the last two chapters of this ebook.

The only problem with this book is its size — it’s 346 pages long and it will take a while both to download and to read. Nevertheless, if you are interested in the concept of market profile it will be a helpful addition to your electronic library.

Dollar declined today against the euro, allowing EUR/USD currency pair to rise above the last Friday’s open level. Currently it is trading near 1.4863 — 58 pips above Friday’s open. The decline was most probably caused by the investors’ concerns related to the U.S. financial market.

Initial jobless claims decreased from 445k to 432k last week in the United States — that’s below the median forecast 438k.

Leading indicators showed a more than expected declined posting a -0.7% change in July after 0.1% decline in June and 0.3% decline forecast for this month.

Philadelphia Fed index improved in August. It rose from -16.3 back in July to -12.7 this month. This growth exceeds the average estimate according to which the index should have risen to -13.4 only. Despite the growth it still remains at a very low negative level and is signaling a slowdown of the U.S. economy.

After saying so much about the statistical Forex systems, I think it’s time to give an example of one. But first, I have to warn that this exert advisor «as is» wasn’t profitable during tests — it had its losses and gains, but spread losses took over eventually, so I can’t suggest using it on your real money account. This expert advisor is good only as an example of an actual statistical Forex system. It uses Tom DeMark’s pivot points calculated over the last 5 bars, which are then normalized by subtracting the current Open price. I used it on EUR/USD H1 chart, but I believe that it can be used on any other currency pair and timeframe. It consists of two .mq4 files:

The first file is StatGathererExample.mq4 — as it appears from its name, this MetaTrader EA will only gather statistics. Run it via strategy tester on a 1-2 year history period (it doesn’t have to be a good quality history, because it has nothing to do with price ticks, and uses just your OHLC data from bars; just be sure to have enough bars in your chart). This EA gathers statistics over a period of time and stores it to MapPath file («rl.txt» by default) in your /tester/files/ directory. Copy it to /experts/files/ for further use by the actual expert advisor.

And the second file is StatRunnerExample.mq4 — this EA is used for the actual trading and on-the-fly statistics gathering. This EA uses MapPath file («rl.txt» by default) from your /tester/files/ (for strategy tester) or /experts/files/ (for actual use) to get the initial statistics. It also continues to gather its own statistics and appends it to the initial file, saving it after deinitilizing.

You can freely use these examples to construct your own statistical Forex systems. I am also currently developing a statistical expert advisor that would be profitable and I promise to share it after the testing period.