All the secrets are exposed! An Exclusive Article from Archer Forex
I have a GREAT surprise for all of our readers. “Archer Forex Signals” founding member, McLean Van Cleve has written a guest post JUST for BestForexTradingTips. Archer Forex Signals has been a proven system to help conquer the currency exchange market. Mr. Van Cleve has produced an absolutely stellar system for all traders
The topic of his synopsis is the discussion of the best signals in the currency exchange market place.
“Having traded to forex market for 10 years now, I’ve seen systems come and go. I’ve seen the same system generate ridiculous profits one year and mediocre profits or even a loss the following year. Linear mathematical based models and the ultra high-tech neural network systems both suffer from this fate. The one thing all of these systems have in common is that they are predictive in nature. Meaning, if x and y parameters are met, it is a signal to go long, or short. While I’m certainly not knocking these models as we run quite a few of them, but the smoothest equity curves and the lowest risk systems are market neutral systems.
Statistical Arbitrage, or StatArb as it’s called in the industry, is a mostly market neutral strategy in which you establish both a long and short position in highly correlated or cointegrated currency pairs (pairs that move in some discernible pattern relative to the other), thus making your trade as market neutral as possible.(More Info)
For example: Given the right set of circumstances we might take a long position in the EURUSD and a short position in the GBPUSD. We know that the pairs generally move in the same direction, so we are going to lose on one trade and make money on the other. The money we make on the winning trade will cover the losses on the losing trade and give us a respectable profit above and beyond covering the loss.
The question that always comes up is, if you’re long EURUSD and short GBPUSD aren’t you actually long EURGBP? The short answer is yes, you have created a synthetic EURGBP long. So why don’t we just take the EURGBP trade rather than doubling our order cost by taking the other two positions?
The answer isn’t all that simple but if you trade EURGBP on it’s own you have direct exposure to the EURGBP rate so your SL and TP levels, entries and exits need to be correct in order to come out on top. With the StatArb position you’re only interested in the relationship between the EURUSD and GBPUSD. So we’re trading statistical relationships between the pairs on the basis that once one or both pairs moves outside of their normal ranges, they will return.”
Archer Forex Signals is headed up by veteran forex trader, McLean Van Cleve and has been providing these Statistical Arbitrage signals and more to many satisfied clients since our launch last year.
Archer Forex Signals is one of the most respected and used Forex trading tools. The company offers a myriad of options to deliver trading signals. StatArb, Intraday and Swing Forex are all individual monthly subscriptions, or you can subscribe to all three. Their methodology in delivery signals is so well trusted that if Archer does not deliver a month in the green, the next month’s subscription is absolutely free! They are easy to get in contactwith and always provide a helpful hand.
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