THIS WEEK’S ROBOS STRATEGY RESULTS
Trades: 3 / Winners: 1 / Losers: 2 / Break Even: 0
Weekly Gain/Loss: -0.84%
Click here to see screenshots of every trade position from last week…
News from the trading desk…
Ah, the joys of overseas travel. I’ve never been a good sleeper on long-haul flights, and a full week after my return from the U.K. I still find myself waking up in the middle of the night after what was intended to be a 20-minute, mid-afternoon power nap. I then find myself cravenly hungry, and so spend another hour or so preparing and eating dinner at around two in the morning. And so the cycle continues. My wife and daughter, who traveled with me, don’t seem to have this problem, at least to the degree that I do, so I find myself channel-surfing alone at a time any other health-conscious 66 year-old would be firmly tucked in between the sheets. Such is life.
During the week I had a couple of members contact me with questions regarding the need for traders to use a VPS, and my recommendations for selecting a provider. As a response, I referred the queriers to one of my ACTP lessons, which I’ve reproduced below. Note that latency is a key factor to take into consideration when choosing a VPS provider, particularly for short timeframe traders. To minimize lag when placing orders, it’s best to find a provider that has a both a good reputation (read client reviews) and is relatively close to your location.
Why I Believe a VPS is a Trading Essential
A Virtual Private Server, or VPS, is essential if you plan to take longer-term trades that require you to leave your computer, even if only for a short period. Most Forex brokers do not accept one-cancels-other (OCO) orders residing natively on their servers when using third-party trading platforms such as MetaTrader. These OCOs include stop loss and profit target orders. Stop loss orders are a trader’s insurance policy against trades that do not go in their favour. They protect us from catastrophic losses, and no market position should be entered into without simultaneously entering a stop loss order.
Many new traders fail to understand how the connection with their online broker functions, so let me explain…
All ACTP strategies, with the exception of the Javelin Algo Trader, use pending orders to enter positions. Let’s assume you’re not using a VPS, and you decide to place a pending long order on the aussie dollar at 0.8000, with a stop loss 20 pips below this level, at 79.9980, and a profit target at 80.0060. Your pending order is sent immediately to your broker, but critically, your stop loss and take profit orders remain on your local PC. They will only be sent to the broker once the entry order has been filled.
Now let’s imagine that your computer loses contact with your broker, whether through a power blackout, internet interruption, or software malfunction, and let’s also imagine that you’re not in front of your computer and you are unaware of the problem. You have a live order sitting with the broker, and this order is now unprotected by a stop loss. If the initial order is filled, there’s no way for the stop and take profit orders to be sent to the broker. You’re exposed, big time, because if the market moves against you, you are vulnerable to the possibility of unlimited losses. This happened to one of my American students a few years back, and he lost $10,000 overnight while he was sleeping, simply because he didn’t think he needed the insurance that comes with a VPS.
Don’t let this happen to you. For around a dollar a day, or less, a VPS will provide protection against internet interruptions, power failures, or PC crashes by storing the OCOs on third-party servers, which are then maintained around the clock to ensure constant connection to the broker’s data feed.
A VPS connection also allows traders to utilize automated trade management strategies, secure in the knowledge that their stop loss and profit target orders are being maintained even if they are unable to be in front of their computer screens. This means that you are able to enter a position, and safely leave your trading station for an extended period (or even turn it off if you are going to bed for instance). Your trade will still be managed by the OCOs you entered with your original orders. You also have the ability to track your trades remotely from any location, even if the PC you are using does not have the original trading software installed.
Check out my fully verified 1% risk account at myfxbook.com, and screenshots of all trades from last week below.
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