The Forex Chronicles

ZuluTrade Demo Trading Contest

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Introduction

If you are interested in learning more about ZuluTrade, the popular automated signal service, one of the best ways to find out how it actually works is to open a demo account and test it out for yourself.

With a demo account, you can of course use pretend money, so you can subscribe to as many signal providers as you wish without having to worry about losing any of your capital, and you can also enter trades yourself.

ZuluTrade Demo Trading Contest

ZuluTrade Demo Trading ContestYou now have even more of an incentive to open a demo account with ZuluTrade because they will shortly be running a demo trading contest where you can put your trading skills to the test and compete against other people to see who can generate the most profit.

The contest starts on 5 June 2018 at 13.00 (UTC), so you obviously need to open a demo account and register for the contest before this time, and it will run for one month until 5 July 2018 at 23.59 (UTC).

(This competition has now closed, but I understand that ZuluTrade are planning on running another trading competition sometime during the summer of 2019, so stay tuned for more details).

Prizes

Entrants will start off with a virtual balance of $10,000 (and 1:100 leverage) and the top 3 traders who have the highest ROI at the end of the contest will receive a cash prize:

  • 1st prize = $3000
  • 2nd prize = $1500
  • 3rd prize = $500

If you would like to register for this demo trading contest, you can do so by visiting the official ZuluTrade website and entering your details.

(full terms and conditions can be found here)

Why You Should Join This Contest

I have taken part in a lot of trading contests in the past and they are always a lot of fun, whether they are forex or stock trading contests.

The fact that you are not risking any of your own money is a major benefit because you can afford to use more leverage and go for the big wins.

Indeed because this is a competition based on ROI, you are unlikely to win one of the top prizes by playing it safe, but you never know.

The point is that it is worth taking this competition seriously because unlike many other trading contests, there are real cash prizes at stake here, with a top prize of $3000, so you have nothing to lose by giving it a shot. In fact you could even earn commissions if people start following your signals.

At the very least, you will learn more about ZuluTrade, and will have the benefit of trying out a trading strategy or two during the course of the contest, which may help you in the future if you ever start trading with real money.

Average Daily Trading Range of the Major Forex Pairs in 2018

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If you are looking to day trade the major currency pairs, it is imperative that you try to trade those pairs that have a decent amount of volatility.

That’s because you will generally find that it is so much easier to trade a pair that trades within a large trading range every day and makes strong moves upwards or downwards, rather than one that barely moves and has limited price swings.

So with that in mind, I want to take a look at the average daily trading range of all of the major forex pairs right now in May 2018 because this will give you an idea of which pairs are worth day trading (keep reading to view the latest figures for October 2018).

Here is the latest ATR (average true range) reading for all of these pairs, and for some of most popular indices, commodities and cryptocurrencies:

AUD/USD – 49
EUR/CHF – 67
EUR/GBP – 43
EUR/USD – 78
GBP/USD – 84
GBP/JPY – 123
USD/CAD – 76
USD/CHF – 48
USD/JPY – 63

FTSE 100 – 67
DOW JONES – 239
NASDAQ – 85
S&P 500 – 25
BRENT CRUDE – 140
CRUDE OIL – 129

BITCOIN – 379
BITCOIN CASH – 114
ETHER – 47
LITECOIN – 9

With regards to the currency pairs, the AUD/USD, EUR/GBP and USD/CHF are some of the hardest to trade, as is so often the case, because these all have trading ranges of less than 50 pips, which makes it very hard to consistently make money from short-term trades when you take account of the spreads per trade.

However there are several pairs that have trading within decent trading ranges. The GBP is very volatile at the moment, so many GBP pairs are worth a look, and the EUR/USD and USD/CAD pairs also have an average trading range of 78 and 76 points respectively, which is not bad at all.

Elsewhere, the Dow Jones has an average trading range of 239 points, which means you could potentially make some decent returns if you call the direction right, and the oil markets have also been quite volatile in recent days, which presents some decent short-term trading opportunities.

Finally, the major cryptocurrencies have taken a hit in recent weeks and have decent trading ranges, but until the spreads tighten up considerably, they are not really a viable day trading instrument at the moment.

Updated Trading Ranges for October 2018

I have just been looking at the very latest trading ranges right now in October 2018, and if you compare the latest figures to the figures from May (shown in brackets), there are some interesting findings:

AUD/USD – 46 (49)
EUR/CHF – 55 (67)
EUR/GBP – 43 (43)
EUR/USD – 64 (78)
GBP/USD – 90 (84)
GBP/JPY – 118 (123)
USD/CAD – 63 (76)
USD/CHF – 45 (48)
USD/JPY – 57 (63)

FTSE 100 – 93 (67)
DOW JONES – 343 (239)
NASDAQ – (138) 85
S&P 500 – 37 (25)
BRENT CRUDE – 171 (140)
CRUDE OIL – 155 (129)

BITCOIN – 162 (379)
BITCOIN CASH – 25 (114)
ETHER – 10 (47)
LITECOIN – 2 (9)

You will immediately notice that the average daily trading range is roughly the same for all the major currency pairs.

In fact in almost every case the volatility has reduced ever so slightly. The only exception is the GBP/USD which currently has an increased average trading range of 90 points, making it a good pair for day traders to trade.

It is the other figures that really stand out. You will see that after the heavy stock market falls, volatility has increased by around 50% on the major US stock markets and the FTSE 100, as shown in the chart below:

Dow Jones Average Trading Range and Volatility

Similarly, as a result of the recent fall in oil prices, the volatility of Brent and US crude oil has also increased quite considerably, although not quite as much as the major stock markets.

Finally, it is interesting to look at the latest figures for some of the major cryptocurrencies because you can see that volatility has dropped off massively since May.

Bitcoin now has an average range of just 162 points right now, making it almost impossible to day trade because of the large spreads offered by many brokers, while the other cryptos quoted are approximately 25% as volatile as they were earlier in the year.

So at this moment in time, it is the oil markets and the major stock market indices that are the most volatile, and therefore the most suitable for day traders to trade right now.

If you are interested in day trading, it is important to use a broker that has tight spreads and fast execution, and FXTM satisfies both of these criteria, with spreads starting from 0.1 points on ECN accounts and 0.5 points on Standard accounts.

The Effect Of ‘Brexit’ On The GBP/USD Pair

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When I last wrote about this pair back in October 2015, I mentioned at the time that this was at a critical point because a decisive break downwards through the trendline could potentially lead to a sustained move to the 1.46-1.48 area.

As it turned out, the price fell a lot further than that because the growing threat of a realistic withdrawal from the EU, annoyingly referred to as ‘Brexit’ by the British media, prompted it to fall to 1.3836 at one point.

At this moment in time, the bookmakers are quoting odds of 4/11 that voters will ultimately vote to remain in the EU, and odds of 2/1 that they will vote to leave the EU.

So based on the fact that bookies are usually correct on these matters, this would suggest that an exit is still highly unlikely, and the slight recovery of the British pound reflects this fact.

So where does the GBP/USD go from here?

Well the price is obviously going to be heavily influenced by Brexit over the coming months. For example, if Barack Obama and other major political figures voice their opinion and leading business figures continue to have their say, this may influence the opinion polls, which in turn could result in some big price swings leading up to the actual vote itself.

However it’s also worth taking a quick look at the GBP/USD price chart as well because from a purely technical perspective, this pair is trading in a pennant at the moment with converging trendlines, and therefore could be set for a decent breakout when the price moves out of this narrow trading pattern:

GBPUSD_March2016

A break upwards could see the price move towards the long-term 200-day exponential moving average at around 1.48, whilst a downwards breakout is likely to see the price test the recent lows and possibly drop a lot further.

Therefore it is worth paying attention to this pair in the coming days and weeks because there could be a decent trading opportunity at some point, particularly if the price breaks downwards because this will confirm the longer term trend.

Why You Should Avoid Trading Over Christmas And The New Year

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At this time of the year many traders tend to take an extended break from forex trading, and the reason why is because it is very hard to generate profits over the Christmas and New Year holiday season.

I myself have been trading the currency markets for a number of years now, and always make sure that I stop trading at least a week before Christmas because I know that it always becomes harder to make money during this time.

I will usually resume trading well into the New Year when all of the traders are back at their desks and everything is back to normal.

The main reason why I and many other forex traders take a break is because the markets are a lot quieter over the Christmas and New Year holiday period.

Volumes tend to drop off quite considerably and price moves amongst the major currency pairs are often small and contained on a daily basis. You can sit staring at your screens for hours on end, but the price will barely move a lot of the time.

There are also be other occasions when you get large price swings that are almost impossible to foresee because they are influenced by the lighter trading volumes.

Generally, though, you will find that the markets are really quiet most of the time. If you need evidence of this, you only need to record the daily price movements of all the major currency pairs during this time, or look at the Average True Range indicator over the course of the holiday period, when you should notice that they all become a lot less volatile.

If you do insist on trading over the holiday season, you should maybe consider reducing your stakes or reducing your price targets due to the smaller price moves.

Alternatively if you are more of a long-term trader and are not really concerned about the small intraday price moves, then you may want to consider trading as normal.

However I personally would suggest that you take a break altogether and enjoy the holiday season without worrying about the markets because, in general, volumes and volatility are greatly reduced and the price moves are often a lot more unpredictable.

You have the rest of the year to make decent returns from the forex markets because they will always be available for you to trade. So why risk losing money and stressing yourself out during what should be one of the most enjoyable times of the year?

The Forex Pairs And Markets You Should Be Trading This Month (November 2015)

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The Christmas holiday period is usually a time when it is a lot harder to make money from trading because the volumes drop off quite substantially and the price moves are generally somewhat unpredictable.

Thankfully there is still plenty of time to make some decent returns before Christmas. So in this article I want to discuss which pairs (and which markets) are potentially very profitable right now.

Ideally you want to be trading those markets that are fairly volatile with large price moves every day, and the best way to obtain this information is to look at the average true range (as indicated by the ATR indicator) for each of these markets:

AUD/USD – 62
EUR/CHF – 47
EUR/GBP – 49
EUR/USD – 77
GBP/USD – 79
GBP/JPY – 112
USD/CAD – 75
USD/CHF – 63
USD/JPY – 57

FTSE 100 – 77
DOW JONES – 167
NASDAQ – 52
S&P 500 – 21

BRENT CRUDE – 132
CRUDE OIL – 135

As you can see, the major forex pairs are not actually that volatile at the moment compared to previous months, with the EUR/USD and the GBP/USD, for example, having average daily trading ranges of 77 and 79 points respectively.

The only pair that generally trades within a range of 100 points or more per day at the moment is the GBP/JPY pair, which is always a fairly good pair to trade.

It is the other markets that are the big daily price movers at the moment, which is unsurprising given the current global events.

The FTSE and the Dow Jones, for example, are both very volatile at the moment, with many days seeing some large price swings.

Finally, the oil markets are not as volatile as they have been, but still generally trade within a range of about 130-135 points if you are looking for a profitable market to trade on a short-term basis.