Friday, November 6, 2009

Free Margin And Time Factors

I have spent so much time in training people to implement this system, and so much discussion on the mathematics of the FX Power Hedge (www.FXPowerHedge.com if you want to purchase), I realize I have not talked about two other very important factors. These are free margin and time.

Free margin is important because it creates plenty of room for price fluctuation between hitting your stop and then hitting your limit as positioned by the mathematics of the FX Power Hedge System. It's important to remember that the math definitely identifies a trend that you can count on to continue with exceptionally rare exception (recommended settings account for just 3% chance the price movement will go against you).

That said, you WILL see small movements against you even within the framework of the power hedge mathematics. So keep NO LESS than half your full account available as free margin. Make as many trades in relatively small lots (or fractions of lots) as you can, and close them out one at a time. This leaves you hedged, and minimizes exposure.

What this achieves is MORE TIME!!! What we see as an additional variable, at least what the software engineers who are trying to automate the system see...we see "time" as a significant variable often overlooked by new FX Power Hedge System traders...thus this post.

If you see sideways movement within a certain range of pips (which we discuss during training of the FX Power Hedge system with each new trader who joins us)...you cannot allow sideways movement beyond a certain point in terms of time. Without even purchasing the system here, I will tell you that sometimes even just 60 seconds of sideways movement can be enough to indicate instability and possible costly movement against you. So you will want to get OUT of the trade.

This depends on the total time period required to achieve the total pip range movement that the power hedge math identifies as your "trend". So there isn't a hard and fast rule that you close out break even or with a small loss after 60 seconds. I've left trades exposed overnight -- more than 12 hours -- because price movement and the mathematics showed me the trend is strong.

The key here is that we are NOT using technical analysis nor fundamental analysis. We are NOT reading candlesticks or candlestick patterns. We are NOT looking at resistance levels or any conventional BS technical analysis techniques. Because they ALL seek to do something that is fundamentally and definitively IMPOSSIBLE...predict the future.

YOU CANNOT PREDICT THE FUTURE!!!

The FX Power Hedge System uses the ONLY two absolute and unquestionably factual variables in forex to determine all trading activity: price movement and time. These are the ONLY true and absolute factual evidences we can use to identify forex trend activity (both short and long trend movement as well as sideways movement, where you can profit as well).

Fortunately, all we need is price movement mathematics and application of the additional variable of time to win consistent profits.

So when you have the FX Power Hedge System math working to your advantage, you are obtaining real time data that is absolutely true -- because it's price movement. It's real. It's factual. It's updated tick by tick and charted back for you by minutes, hours, days, weeks and months.

The FX Power Hedge System is also utilizing the same principles of mathematics documented successful in quantum physics and other fields of study to identify the behavior of other physical systems no different in our universe than the forex market. Forex is, like all things, a system that exists in our universe. And, like all things in heaven and earth, it can be fully understood through mathematics. This is what the FX Power Hedge achieves.

So, in real time, we make decisions based on pure math. Simple. Factual. Real time data. There is no predicting of the future, which is impossible.

The one thing we advise, in addition to application of the FX Power Hedge mathematics, is to please keep reasonable free margin (about half your account depending on total equity -- less is required as accounts grow larger), and watch the time variable as well. We will share more with you in terms of specifics after you purchase the system. But, just as a general advisory for all traders, keep "time" in mind. It is an important variable because it is an absolute factual behavioral factor that you can observe with 100% confidence what you are seeing in real time if true. And it has meaning within the FX Power Hedge System calculations.

Just as we observe and capitalize on total price movement, we also watch the TIME it takes for X pips worth of movement to transpire in order to gage the strength of movement. So it's not just the total number of pips worth of movement. It's also the amount of time involved in the movement. This impacts both closing out of trades as well as decisions as to when you should take advantage of movement to capture profits.

Remember, while we have software engineers "trying" to automate the FX Power Hedge System, we have NOT designed effective software. There is no conventional EA that works. Not one produces profits on a consistent basis. So don't be sucked into the pitches offered by manufacturers of EA's. Based on our calculations, you can't achieve what's needed to win in the simplistic EA. What we're attempting to do today is create software that will run in the background and feed information to a conventional EA, and make the trading decisions for you based on the FX Power Hedge price movement mathematics, principles of statistical probability and causal effect, as well as the essential time variable.

BEFORE I GET ONE MILLION E-MAILS -- WE HAVE NOT AUTOMATED THIS SYSTEM!!! THE FX POWER HEDGE SYSTEM (www.FXPowerHedge.com) IS STILL A MANUAL TRADING SYSTEM. IT WORKS. YOU CAN LEARN IT RELATIVELY EASILY. YOU CAN EARN SIGNIFICANT PROFITS. BUT IT IS A MANUAL TRADING SYSTEM...NOT AN EA. NOT A ROBOT. WE ARE NOT EVEN SURE IT IS POSSIBLE TO AUTOMATE THIS SYSTEM.

But we can TEACH you to implement the system, and we do provide elements of automation (such as calculators to eliminate the need to calculate most of the mathematics). So, you don't have to be a rocket scientist. You do, however, have to manually implement the system. It has NOT been automated yet.

Sorry to ramble. I just wanted to write and emphasize the free margin and time variables because they are important.

Peace and profits to you.

Sparks