Monday, November 12, 2007

Into the Heart of Chaos

Into the Heart of Chaos
How I developed Forex Profit Pro

Like many of the traders I have met or talked with over the years, I was first introduced to commodities trading through a well-known mail-order course. However, after nearly eight months in the markets, I had made only a couple of fairly good trades and a lot of bad ones.

With my losers outnumbering my winners, my overall performance was less than stellar. The problem was that the markets did not always act as they were "supposed" to, and frequently reversed themselves just long enough to force me out before going in the "right" direction.

Sound familiar?

Because I was often frustrated and unsure of when and where to get out or get back in, I went on a quest for the "Holy Grail" of trading systems.

I began my search by reviewing the literature on statistical analysis of the markets. I was not looking so much for what had already been done, as for what had been overlooked. I discovered that most analyses and analysis tools were based on linear mathematics and statistics. I felt that from a statistics standpoint, something was missing, so I decided to do some research into the psychology of trading. That is when I hit upon a significant discovery.

From the literature on the psychology of trading, it was evident that it is not fluctuating interest rates, not droughts or frosts, not government reports, not even supply and demand that makes the markets move. I came to the conclusion that at its most basic level, it is the belief system of each individual trader that ultimately motivates the market.

Each trader, filtering information through the chaos of his or her desires, hopes, fears, wishes, needs, biases, background, experience, and motives, makes decisions to enter or exit, to buy or to sell. Those decisions are transformed into orders, and when those orders reach the trading floor, the ticker ticks and the price moves.

This seemed to me to be an extremely important concept. In fact, several articles referred to Chaos Theory and the application of non-linear dynamics in studying human brain activity and the thought patterns that are part of the decision making process. As I examined Chaos Theory more closely, I found that it deals mainly with complex, turbulent, non-linear systems such as brain activity, traffic patterns, the weather, or the flow of blood through the heart.

It came to me that since the markets are driven by the combined decisions of millions of traders, they also fall into the category of complex, turbulent, non-linear systems. As such, they require a non-linear approach, if they are to be understood.

What this means to traders is that any techniques, tools or systems based solely on linear statistics will produce indifferent results. This is because those models, including ones I had initially developed, were created by tweaking historical data to fit the model. They are grounded in the mistaken assumption that the future will be like the past.

I also found within the literature some books and articles that were not published by chaotists, but rather by traders with expertise in non-linear math and statistical modeling based on Chaos Theory. Two authors in particular were quite influential, Edgar Peters and Bill Williams, although the work of many others was also quite eye opening. By using their research as a starting point, and then building on it over the next twenty-one months, I finally succeeded in developing a system that did not depend on traditional linear statistics, historical data, or "goodness of fit."

I called it The Fractal's Edge, and it is a chaos-based trading system that follows the basic rhythm of the market. (That was our original stocks and futures trading system, before we got into the even more profitable Forex market.)

In the six years since the launch of The Fractal's Edge, my research has taken me into the very heart of Chaos. I have confirmed what most traders feel intuitively: each market has unique characteristics that set it apart from all of the others, and truly effective systems must account for those individual differences.

I also found that the Forex offered many advantages over the Stock and Futures markets. And my trading results, though successful with stocks and futures, were even better in the Forex. One of the reasons for this is that there is a great deal more volume at play in the Forex than in the stocks and futures markets. This leads to more accurate and profitable signals using the sciences I'm employing.

With that in mind, I decided to develop a real-time Forex trading system that would be easy to use and perform better than any other.

The result is The Forex Profit Pro, a flexible, easy and profitable system that allows you to trade your way: intraday trading, swing trading, position trading, economic report trading and even discretionary trading.

Best regards,

Ken Herbert

The Science Behind Forex Profit Pro

The Science Behind Forex Profit Pro

FXPP integrates applications derived from the latest findings in the advanced sciences of Chaos Theory, Fractal Geometry, Wavelet Theory, and Quantum Physics into an automated, online Forex trading system that yields highly consistent and profitable results.


Please keep in mind that you need no knowledge of any of these sciences to profit with FXPP. It is all built-in to the system. All the calculations are automatic. All you need to do is follow the simple signals generated by the system as illustrated here.

The following is a brief description of each scientific approach that went into the development of FXPP, providing you with an overview of the substance behind the system:


0. Chaos Theory has been widely and effectively applied to understand and predict behavior in complex systems such as weather patterns, traffic flow through a city, turbulence (blood flowing through the heart, air flowing over a wing), and brain wave activity. It is also applicable to price action in the currency markets.

0. Fractal Geometry includes the study of an object's roughness or smoothness. It is also used for modeling complex organic and geological systems, such as the growth of trees or the development of river basins. It has direct application to the "roughness" or "smoothness" in a series of changes in a currency's price over time.

0. Wavelet Theory is employed in a variety of fields, including engineering, chemistry, neurophysiology, nondestructive evaluation, pattern recognition, fractals, and economics. Such applications include analyzing brain signals for the detection of Alzheimer's disease, analyzing ultrasonic weld inspection signals for the detection of cracks in piping of nuclear power plants, and analyzing fluctuations of financial markets, among many others. 

0. Quantum Mechanics is a branch of science that deals with the movement of discrete, indivisible units of energy called quanta. Part of the theory holds that energy is not continuous, but comes in small but discrete units that behave both like particles and like waves. Light waves for example, are made up of particles (photons) appearing in random locations (probability density clouds) in such a way that they can be observed as either particles or as a wave. 

A single bar in a price chart would be similar to a particle, while a series of price bars appearing in random locations on the chart can be observed as a wave.
So, what does Chaos Theory, Fractal Geometry, Wavelet Theory, and Quantum Mechanics really have to do with making money in the Forex?

Everything. See, any single one of these sciences - by itself - correctly applied to the Forex could give you a significant competitive advantage.

Moreover, used together, the precisely tested, synergistic combination of these scientific approaches - as automatically exploited by FXPP - reveals the underlying order and direction of the market, delivering far superior SHORT AND LONG TERM PROFITS that are exponentially greater than any other system relying on a single approach alone.

Again, all of this happens automatically - behind the scenes - so that you can concentrate your time on MAKING MONEY, not earning a doctorate degree of science.

All the best,

Ken Herbert
CEO, Quantum Research Management Group

Do Trading Systems Really Work?

Do Trading Systems Really Work?
The answer may surprise you.


As I have met with and spoken to hundreds of traders this last year, many have asked if my and other Forex Trading Systems really work.

Before we get into that, let's first establish what a system is.

Someone once told me that a system can be summarized in a powerful acronym as:

S ave
Y ourself
S tress
T ime
E energy
M oney

Think about it...

Saving Yourself Stress, Time, Energy, and Money sounds great, right?

The definition of system at dictionary.com says, "A group of interacting, interrelated, or interdependent elements forming a complex whole"

So let me ask you a couple of questions:

What systems if any do you currently use to decide when to get into and out of a trade? And where, or if, to include stop-losses and/or profit targets?

How about your system for money management?

What about your system for optimizing your trading mindset?

Are you systems working for you? Are you getting the results you want?

You may notice that there is room for improvement in those areas. Otherwise, you probably wouldn't be reading this.

Correct?

One thing's for sure. Without the right trading systems in place, it is very difficult, if not impossible, to achieve consistent success.

This leads to the next question I hear frequently:

So which or whose Forex trading system works best?

The answer to that is very similar to me being asked which time management system works best.

Meaning...

The best system for time management and Forex trading is dependant upon you, your habits, and what you feel most comfortable working with and sticking with.

Analogy of two people who have time management systems:

 . One person swears by a Franklin-Covey Day Planner and feels that anyone using anythingelse must be a fool.
 . The other person uses a Treo 650 PDA and feels that anyone not using a Treo for their time management is a fool.
The true answer is that as long as it produces the desired result for the person and they are comfortable in using it and committed to using it, both are using the best system for them.

Same holds true for you and your Forex trading business.

You'll hear people talking about how great their system or product is and how great that other system or product is...

BUT YOU HAVE ONE JOB AND ONE JOB ONLY...

And that is to find the system that works best for you, feels right for you, that you know you can remain committed to following, and you are able to produce the results you desire from it.

Because here's the truth about ANY system... and the answer to the question posed to me at the beginning of this email 'if systems work':

Systems will only work for you IF and only IF the system is a fit for you and you work the system...religiously!

As I'm writing this I glanced over to my bookshelf and see a glaring example of this in action in a book by Bill Phillips called Body For Life.

No one with their before and after picture results shown on the cover and inside of that book were half-committed to that system... or were just going to give it a try.

They were fully and whole heartedly committed to start, continue and complete that system... and the results show that very clearly.

Sad fact is that millions of others started with just as much fire and determination as the ones seen on the book, but there's one difference between them and the ones on the cover...they didn't fully and completely follow the system.

Back to Forex Trading...

For instance many of our clients went from having systems that were getting them nowhere but stressed out and broke prior to meeting me. They were ready to throw in the towel but after 'seeing the light,' so to speak, it finally hit them.

They made the changes necessary, took the steps they were directed to take, followed through down to the nitty gritty detail, and are now achieving tremendous success.

Do as they do, and you'll be on the path to success and wealth. Remember, Forex trading is a business. If you treat it as such, you'll be further along than 95% of the traders that never make it.

All the best,

Ken Herbert
CEO, Quantum Research Management Group

Are You Ready To Trade ?

Are You Ready To Trade?

I can't tell you how often I speak with Forex traders who spend a lot of money on the purchase of a new trading system, and then plunge directly into live markets without taking the time to fully understand the system and paper trade with it before risking their investment funds.

This inevitably leads to trouble and thousands of dollars in losses.

While it's not necessarily the most sexy trading topic, the right trading preparation will save your butt.

And this is why I'm writing about this subject today: to spare you unnecessary losses that come from a lack of preparation.

Don't let this happen to you.

Make sure you have a trading plan that covers all the bases and test it BEFORE YOU TRADE.

Your trading plan should include:
 . your criteria for entering a trade
 . what to do if you get in and the market 
moves against your position.
 . how and when to get out when the market 
moves in your direction.

Failure to be prepared in these areas can
lead to unnecessary and large losses. Of course,
losses are going to happen in trading. There's no
getting around it. But, to experience losses
that could have been avoided with a good plan
is unfortunate.

Fortunately, with Forex Profit Pro, all the
contingencies have been considered ahead of
time. Before you place your first trade
with Forex Profit Pro, you'll know EXACTLY:

 . how to position yourself to win regardless of 
whether the market moves up or down
 . which currency pairs to trade
 . the optimum time-frame and time of day to trade
 . when to enter and at what price
 . when to exit
 . where and how to set your stop losses

You will know what you're doing and have a plan that covers all the bases BEFORE you start trading. Understanding and committing to your plan-AHEAD OF TIME-will give you the confidence you need to stick with it when your emotions might dictate otherwise.

You'll be able to surf the currency waves without getting sucked into the psychological undertows and tsunami's that claim so many
unprepared traders.

So, whatever system you trade, be prepared first.

Catch you on the pip side,

Ken Herbert

P.S. When you become our client, we make sure you are prepared with a trading plan and a whole lot more.


P.P.S. If you have any questions or would like to talk with us, we're only an email or phone call away.

Why Trade The Forex?

Why Trade the Forex?

If you don't know it already, you are about to discover how truly amazing the FOREX Market is. "FOREX" is actually an acronym for "FOReign EXchange," which can be defined as "the simultaneous buying of one currency and selling of another."

To illustrate, if you have ever taken a trip to Europe or Japan, at some point you went to a currency exchange and converted your dollars into Euros or Yen. In other words, you simultaneously sold your dollars and bought Euros or Yen.

TRADING THE FOREX IS NO DIFFERENT, as all currencies are traded in pairs-Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY).

For small investors/speculators, the FOREX may well be the last great financial frontier - the place where, at last, the trader with the right tools can actually make money.


5 Unique Advantages of Trading the Forex

1. More Consistent Trends and Price Stability due to Enormous Size & Liquidity
While the New York Stock Exchange averages about $16 billion in trading volume per day, and the London Stock Exchange averages around $11 billion, their combined daily dollar volume represents only a little over three percent of what the FOREX averages. 

With a daily trading volume of almost $2 trillion, the FOREX is the world's largest and most influential market in terms of both size and liquidity. It is an immense global market with no central exchange. As a result, the FOREX can neither be controlled nor regulated by any one country. 

In addition, around 90% of its transactions involve the seven major currency pairs. This translates into smoother, more consistent trends, which means more opportunities for you to profit. Furthermore, the major currency pairs are stable, and the volume at which they are traded promotes price stability.

2. Easy Access
The FOREX deals with the buying and selling of currency, and was once the sole domain of governments, banks, large financial institutions, and import/export brokers. There was no room for investors with comparatively limited capital. 

Today however, due in large measure to the Internet and electronic trading, the FOREX is now accessible to everyone. In fact, the turnaround has been so great that 90% of FOREX traders are speculators. 

Take as an example the Chrysler Corporation, which last year earned more money trading the FOREX than it did selling cars. More importantly, even a tentative trader with as little as $300 of disposable funds can participate in this world-wide market.

3. Flexible Schedule
The FOREX is open 24 hours a day, from Sunday at 5pm Eastern time to Friday at 4:30 pm Eastern time. 

Beginning with the New Zealand and Australian markets, FOREX trading flows around the globe as the business day begins in each of the world's financial centers, moving from Sydney to Tokyo, then to London, and finally to New York. 

In this 24/7 environment, you can choose your own trading hours as well as respond to events immediately-day or night.

4. High Leverage
One of the great advantages of trading the FOREX is the leverage it offers. Unlike stocks or futures, in FOREX trading, the amount of leverage available can vary from 100 to 200 times the value of your account.

5. No Debit Balances
What follows is an astounding bit of information: with most FOREX dealers your risk is limited to the funds you have on deposit with them. Because there are no margin calls in FOREX trading, for your protection most dealers will automatically close out all of your open positions if your account equity falls below the required margin level. Think of this as a final, automatic stop, always working on your behalf to prevent a debit balance. 

The great thing about all of this is that you don't need a college degree or even a high school education to do well trading the FOREX. However, you do need some training, you need an objective system, and you need a plan. Our site, course, trading system, webinars and 1-on-1 training provide everything you need to get started, to become successful, and to build real wealth.


Best regards,

Ken Herbert
CEO, Quantum Research Management Group
P.S. If you have any questions or would like to talk with us, we're only an email or phone call away.


Automated Forex Day Trading System

Most day traders in forex market have their favorite currency pairs. If youíre going to make it day trading the forex market, you need to have a day trading forex system and stick to it. Go to seminars on day trading, use simulations if possible and practice reading market indicators.

The way you approach the forex market psychologically has as much to do with your success as any trading plan. If you have a nose for business, guts and a sharp instinct for how the market shifts, then possibly day trading may be suitable for you. Relying on out of date information to base your day trading decisions will result in poor trades.

What is the importance of an effective daytrading forex system? Patience, perseverance, determination and a rational trading plan are the key attributes of a successful forex day trader. Any day trader should know up front how much they need to make to cover expenses and break even. You can use an automated forex trading system like Forex Profit Pro to avoid the emotion problems with the trades.

Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest-rate futures, and commodity futures. Although day trading has become somewhat of a controversial phenomenon, its prevalence is undeniable. You can start Forex Day Trading with as little as $1,000 if you decide to trade using a mini account rather than a standard account.

 The Forex Profit Pro  can be used for both mini and standard accounts and included with money management system..

For the sophisticated investor, forex day trading may be safe since such investors know what they are doing and are willing to absorb the risk of losing money. Day traders should understand how margin works, how much time they'll have to meet a margin call, and the potential for getting in over their heads. Individuals who attempt to day trade without an understanding of market fundamentals often end up losing money. If you want to day trade for a living, not only must you make good money, but you must avoid losing money.

Saturday, November 10, 2007

Forex Day Trading

Market professionals agree volatility definitely is a plus for the day-trader and there is no shortage of volatility in forex Trading. The profit potential of day trading is perhaps one of the most debated topics on Wall Street. Before starting out in the Forex daytrading market we need to make sure we understand the basics of daytrading.

Day trading is not for everyone and involves significant risks and also need to be in front of the computer screen all days. You blink and you miss. It's hard to make money trading a flat market. This is particularly true for day-traders. Day traders spend their time at computer screens, quickly buying and selling investments within a single day. Sometimes it requires you to make a quick decision which involves large sum of money and wrong decision could bring you a fatal consequences.

Day-traders need up to date information on which to base a decision. A pattern day trader is treated differently from other traders. Daytrading can be fruitful or disasterous. A proven profitable trading system is essential for the forex Day traders. It is also imperative to follow a conservative money management system to preserve the account capital. The cruel reality is no money no trade, period.

During the day trading, a day trader will quickly buy a large number of stocks at a time and sell it once they see the stock gain within the day. Can day-trading be learned? Day traders should understand how margin works, how much time they'll have to meet a margin call, and the potential for getting in over their heads. In some cases, the whole account can be wiped out in minutes and if you cant conrol your emotion and braking the rules of the trading system.

Youíll need to ascertain for yourself whether you are comfortable with the levels of risk inherent in daytrading.. Donít begin your day trading with money that you can not afford to lose. The preference of day traders is an Electronic Direct Access Trading service which links the trader directly to the exchange through a modem. Day trading is very glitzy and glamorous on the surface, and it can certainly be very financially rewarding. Although some people enjoys the high risk, fast speed environment and for some people it is a highly stressful enviroment.

Forex Day Trading is not as fasionalble or popular as a few years ago but it’s still attracting some of the youger traders who would enjoy the excitement , high rewards but also high risk working environment.

I personaly do not like the Forex Day Trading and wouldn’t recommend to anybody.
For the more comfortable method of Forex Trading, you can get more information at www.myezforex.com

David Wong,
Sydney, Australia,
www.myezforex.com