Compound your profits

Every year hundreds and thousands of new traders come into the forex arena looking for riches, trading 24 hours a day shooting for 50% a week and find their accounts blown within the month, most of which become too demoralised to ever even consider depositing more funds and pulling the trigger on another trade, their trading career is over before it had even begun.

Those that become successful long term traders understand the power of compounding gains for huge eventual profits, they start small, aim low and believe it will all pay off in the future, however most human beings are born with a natural greed, an emotion that runs so strong in most people's veins that the thought of 2 - 3% a week sends shivers down their spine and they become part of the above club, the 95% of unsuccessful traders.

As fun as it is to dream of doubling your money every fortnight it is important to be realistic of what to expect in terms of profit in both the short and the long term, the reality is a consistent weekly gain of 2 - 3% over the period of a year is no easy feat for even the best of traders however it is achievable for the few successful traders.

To most the idea of making a 2 - 3% weekly gain isn't all that exciting, especially when compared to claims of 20,30 and even 40% returns a week that are often thrown around on the internet but the moment we add compounding into the equation those small weekly figures can amass to some huge yet realistic sums of money.

For those that don't understand the concept of compounding gains or interest it is the exponential growth of a sum of money by continuously reinvesting all profits, so although the profit percentage remains the same the actual sum of money grows at a very rapid rate.

As a very basic example lets assume we have $1000 in our trading account.

If we were to make a 10% return every month for a year and not re-invest any of it we would have made a 120% return equating to $1200.

If however we compound our gains every month we will end up with a much larger sum which i'll demonstrate below.

month 1 - 1,000 + 10% = 1,100

month 2 - 1,100 + 10% = 1,210

month 3 - 1,210 + 10% = 1,331

month 4 - 1,331 + 10% = 1,464

month 5 - 1,464 + 10% = 1,610

month 6 - 1,610 + 10% = 1,771

month 7 - 1,771 + 10% = 1,948

month 8 - 1,948 + 10% = 2,143

month 9 - 2,143 + 10% = 2,357

month 10 - 2,357 + 10% = 2,593

month 11 - 2,593 + 10% = 2,853

month 12 - 2,853 + 10% = 3,138

Total gain in percentage - 213.8%

Total monetary gain - $2,138

Now lets take it one step further by using our yearly return and compounding over a 7 year period with a starting balance of $1000

Year 1 - 1,000 + 213.8% = 3,138

year 2 - 3,138 + 213.8% = 9,847

year 3 - 9,847 + 213.8% = 30,900

year 4 - 30,900 + 213.8% = 96,964

year 5 - 96,964 + 213.8% = 304,273

year 6 - 304,273 + 213.8% = 954,811

year 7 - 954,811 + 213.8% = 2,996,198

Total gain in percentage - 299519.8%

Total monetary gain - $2,995,198

How is that for a retirement plan?  7 year plan.

Now I think I can safely say that would be extremely impressive to anybody!

With the power of compounding gains figures like that eventually become realistic in the long term if you can remain consistently profitable at even 2 - 3% a week!

So if you really want to be successful aim for 2% a week instead of 20%, compound your gains and begin building your future!

You can use this concept for your expert advisors as well.  Set a weekly balance limit that will cut off the EA from trading until the next week.  Also, set a profit target for your EA so it will close all positions or at least set stops to protect that profit.  This is one way of controlling your EA's in MT4 so that they will achieve your goals..  It will also aid to get you out of the market when things start to change.

OIL as in UCO ETF

Demand level identified.  Who is ready to go long on OCO?  Risk is defined here with a stop under the recent low.

The demand level is shown with the top horizontal line on this hourly chart.

Tipster Trendlines Chart Trader - Properties

This video goes over the properties of Tipster Trendlines.  This is the experts properties menu that you see when your drag it onto the chart.  Hope it helps.

An introductory video to Tipster Trendlines for MT4

What is it?

Tipster Trendlines (TT) is an Expert Advisor (EA) for MetaTrader 4 (MT4) trading software platform. Once you download and install the EA it will automate your manual trading for you. Tipster Trendlines is a TOOL, not a trading 'system' or robot. Use it if you place trades manually, it will do the grunt work for you. You can place every kind of order. You can select between 1 or 2 targets.

Where can I get it?

Where can I read more about it?

Tipster Trendlines for MT4 Update

Version 14.1 is now available at MQL website.

Take a look at the videos and read about it at 2 different forums. 

Here is the page that describes the MT4 chart trader expert advisor and give you the links and information you need.  

Remember this post? Here we go AGAIN!

A long time ago, I did a post up on "What the top looks like".

If you trade forex and follow USDCAD, you will want to read this and keep your eye on the ball this time. Watch the freight train hit the 1.3 wall and STOP.  Your guess is as good as mine if it continues or reverses, but 1.3 will stop price until all the order are sorted out.

What to look for in a Forex broker

First off, let me tell you who was on my list when it was compressed to 2.  Questrade and Forex.com.  FXCM came in close as well.  What do they have in common?  The most important part for my broker is regulation and protection.

So my main broker right now is Questrade.

There are 3 major steps to find a forex broker.

Use these suggestions to narrow it down to a few.  It shouldn't take long to do that.  The important thing to know is this – they are all out to take your money in fees of some sort. After you do some research you will see there is no perfect broker, they all have some way of getting the edge to take you money.

Step 1: Do some research
Before you compare brokers you need to list the criteria that you will compare. Add more to the list as you discover details. I used an excel spreadsheet to help me.  List the brokers as you find them, filling in the details.
Regulation

There’s regulation, then there’s protection. Do not confuse the two. I want both. Is the broker regulated, and registered with the regulator listed on their site? If they are, also go to the regulators web site and cross check to make sure they are actually registered and in good standing. For US resident, good luck, the NFA and CFTC are pretty useless for forex, and in comparison the rest of the world, totally useless as there is no protection (refer to my post of CIPF which offers solid protection).  I recommend a Canadian broker, if they let you open an account you have some real solid protection for your funds.  Also, ask “is the money deposited separated from operational capital, in other words, is it segregated”?  You want segregated.

Dealing Desk, Non-Dealing Desk ECN

I like ECN, it’s a straight through process with less screwing with your orders.

Spreads or commissions

Does the broker offer fixed or non-fixed spreads?  Depends on how much you trade.  Most MT4 brokers make money on the spread.  There are many tools on the net to check this.  How wide are the spreads?  Check the tools and get a demo to confirm when you narrow down to a few brokers. Spread is more important if you trade short term.
Leverage and margin

Demo accounts

Do they offer demo accounts?  You need this to get familiar with the software and it will prompt LOTS of question if you actually place trades and follow through.  How long until the demo account expires?

Account lot size (mini, micro, standard). A smaller lot size allows you to trade with less money.

Swap or rollover

Does this broker credit or debit daily rollover interest? Some brokers either do both, deduct interest, or neither.  This information is important to traders who hold positions overnight.Some even have negative swap both ways, meaning you have to pay them, how is this possible?  If you want to do carry trades this will impact you.

Trade rules

distance of stops, orders inside bid/ask, order types (brackets orders?), is hedging allowed?

Currency pairs offered

What types of customer service is  offered, and what methods can I contact them through? 

What times are they available?

What trading platforms are offered? Is there a mobile application as well?

What is the deposit/withdraw process / methods?

Step 2: Compare brokers now that you have a completed spread sheet

Step 3: Open demo accounts and ask questions.

Pick at least two brokers that fits most of your criteria and open up demo accounts. Trade in different market environments. Learn all the different features of each trading platform. If you have questions, don't be afraid to ask. Many brokers have excellent customer service support and would be happy to answer your questions.
Demo accounts are great for selecting a broker. make sure you call them to ensure your demo account would be set up exactly as your real account. Same deposit currency, same rules (hedging, leverage, etc.)
Most demo trading platforms are very similar to their live counterparts, but not exactly the same. There may be a difference in speed of execution, slippage, and platform reliability (most of the time live accounts are more reliable than demo accounts). When you do have your strategy down and you are ready to move to a live account, start off small, test the waters, and see if this particular broker will suit your trading needs.

Media Monkey - Announce the next song title

I wrote a script to announce the next song in MediaMonkey.  It uses a text to speech conversion process and the text to speech engine is not on your PC.  It works for both local music and streaming radio stations.  The voice is very natural and nice to listen too.  At the top of the hour it will announce the time with the new song, same for half past the hour.

Here is a sample of the transition and the song announcement.


It is absolutely fabulous!!

Do you want the script?  All it takes is a small $15 donation to help me out.

The MediaMonkey website is here.

Remembrance

Thank you, Soldier.

Play MP3 and have text to speech in MT4

In a few days the following packages will be released.

• Talker - Text to Speech
• PlayMP3 - Play MP3 files in MT4
• TalkMP3 - Plays MP3 files and does text to speech in MT4

Each one of these is a library file (ex4).  You place it in your experts/library directory.

To learn more about these, visit the MT4 Talker and PlayMP3 page (link also appears at the top of the blog.

Demo is available.