Frequently Asked Questions
23). Tell All About FLOW
We practice what we call “High Probability Trading” in fact we even wrote a book called “High Probability Trading Setups” which you can download a free copy of if you become a member of BKForex
In order to achieve high probability, every single one of our trades is a fusion of both fundamental and technical analysis. And unlike some other services we will always spell out all our reasons for entering a trade rather than simply spit out a cryptic signal to buy or sell. This way you can judge for yourself if the trade makes sense to you and participate along with us if you like.
Here is an example of a trade:
November 15, 2011 12:00 AM ET 5:00 GMT
Short GBP/USD at market currently 1.5879
Close trade at 1.5829
Fundamentally we have good reasons to believe that UK inflation will print cooler this month. Both input and output PPI readings were weaker than expected and the BRC shop index was lower as well. Softer inflation data may embolden the BOE to expand its QE program which would be bearish for the pound. Technically cable printed an engulfing reversal candle which is a very bearish signal so we will going short GBP/USD at the start of London trade.
Trading forex carries a high level of risk, and may not be suitable for all investors.
November 15, 2011 10:13 AM ET 15:13 GMT
BK -- GBP/USD Target Hit +100 on trade Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors.
We launched BKForex Signals on December 8, 2006 at the Las Vegas Forex Expo, but we have been running bktraderfx.com since September 20, 2006 and sent out our first trading signal on October 1, 2006. Prior to this, we were the editors for the Money Trader.
We sent out our first trading signal to members on January 2, 2007.
This service is offered by BKForex LLC and not FXCM. However there may be specific arrangements made for certain FXCM clients that may reduce the monthly charge of our service.
Every investor’s risk tolerance and personal finances are different. That is why we never provide a “one-size-fits-all” answer to that question. Generally, smaller account holders should use mini lots while larger accounts should trade regular lots. We typically recommend that traders never employ more than 10 to 1 leverage meaning that if you have $10,000 of equity in your account you MAXIMUM position should not exceed $100,000 of notional value. However this is simply a guideline. Every trader is different and all leverage decisions are a matter or personal preference and responsibility.
We generally send one to two alerts each week. With currency markets more volatile than ever, timing the trade well has become crucial to achieving consistent success as an FX trader. After months of back testing and live testing, we introduced our new model of Session Based Trading in August of 2009. At BK Forex our edge has always been to trade global economic data and with Session Based Trading we can exploit that edge even better while avoiding unnecessary volatility Our subscribers have seen markedly better performance as the result of this change.
Here is how it works:
If we are trading an event during the Asian session We put our trade on between 4:00-5:00PM EST (20:00-21:00 GMT)
If we are trading an event during the European session We put our trade on at 1:00AM EST (5:00GMT)
If we are trading an event during the North American session We put our trade on at 7:00AM EST (12:00GMT)
BE PREPARED -- GET THE PLAN!
Most importantly we email you our TRADING PLAN hours before the trade is placed to give you plenty of time to prepare.
The trading plan includes:
· Our reasons for the trade
· The currency pair that we will be trading
· And the time when the SMS and email with the specific details will be sent.
We disseminate our trade alerts in four ways
Email – We recommend a GMAIL account for best delivery. Those of you with Blackberries will generally be able to get them instantly
SMS (Text Message to Cell Phone) – We provide a short version of our trade alerts directly to your cell phone across the globe. We use a global SMS provider and make every effort to ensure delivery – but make no guarantees that the messages will reach you. NOTE if you chose to subscribe to SMS delivery, you may be charged for each incoming message by your cell phone provider. We are in no way responsible for any costs you incur as a result of this method of delivery.
Twitter – This is the best way to see our alerts as we post them in the Twitter first. The Twitter feed is protected and is available to us subscribers only
Website – All of our BK SWING trades (but not BK FLOW trades) are also posted and archived in the Members section of our website
07). Do You Take Into Account the Spread on Your Stops or Targets?
Yes, we actually do account for the spread already when setting our stops or targets, so you do not need to add any additional “buffer” (unless you want to, of course). However, each broker has different spreads, so for your guide, our spreads and price feeds are based upon FXCM Dealing Desk Platform. The price that you obtain may also vary depending on your broker and their price feed.
Yes we trade our recommendations with real money.
No. We put our recommendations into chat first then enter the trade at market and simultaneously send out the email alert and SMS messages. Occasionally we get slightly better execution and sometimes slightly worse.
Many brokers offer a wide variety of currency pairs. You may want to look on www.fxstreet.com to see a list of potential candidates. Should your broker not offer the currency pair that we are recommending, you can always do a “synthetic trade” using the legs of the currencies, but that may result in wider spreads, slippage and volatility depending upon your broker. For example, if we recommended long AUD/CAD, a synthetic trade would be going long AUD/USD and long USD/CAD. The amounts are slightly different because the AUD/USD has a higher pip value than USD/CAD but that is just a simple mathematical calculation. You also can pass this trade up as there will be many others to come, but if you choose to take it, you would need to watch carefully (and manually) because you would not be able to put in proper stops and limits if you did a synthetic trade.
For US news, CNBC or Bloomberg Television are the fastest source of information. Most brokers offer real-time news feeds including Forex Factory, which has the Forex Factory dynamic calendar that updates in real time.
No we cannot give personalized trading advice and never do so.
Email delays are usually a function of your email provider. Yahoo seems to have the biggest problems, we recommend Gmail. We also are doing our best to find ways to reduce this problem as well and to increase efficiency, but we have found that most issues are resolved once subscribers add our email to their address book. Make sure that you add firstname.lastname@example.org into your “known” or “safe” list. If we send mail to someone who has not put us on these “known” lists, our mail is still being delivered but can be subject to many additional filters. If it does not get bounced but does not land in the inbox, it is most likely in the bulk folder, junk folder or grossly delayed. This can change with every mailing that we send due to the ISPs dynamic content filtering. For certain email providers, you also may need to reduce your filtering level and add our address to your safe list.
Email us a note at email@example.com and we will re-send you the login information
Email us a note at firstname.lastname@example.org and we will change the settings in your account
Everything can be found by subjects matter. Newsletters can be found under FX Reports tag and Trades under Trade Rec tag.
Email us a note at email@example.com. THERE ARE ABSOLUTELY NO REFUNDS FOR PURCHASES ALREADY MADE
Once you activate your $199 trial membership you will start to receive trade alerts (either via email or SMS or both, depending on your selections in the activation process) from us. We will detail why we are entering the trade and provide instructions to help you enter and exit the trade as it progresses. In addition to trade ideas you will also be able to participate in a monthly live trading session via chat room and will receive our weekly Event Risk Calendar with our bias on the upcoming economic data.
Generally one to two trades per week.
No, no and no. We are not a personal investment advisor.
Every individual has unique circumstances that require very specific advice. Do not equate this service with a personal advisor; we seek to find the best trading ideas for you to profit from. However we do not, or should we say, cannot, take into account all of the personal circumstances of all our subscribers. WE ARE NOT A PERSONALIZED ADVISORY SERVICE.
We love to get feedback. Simply email us at firstname.lastname@example.org whenever you feel the urge. We try to make ourselves very accessible.
Flow Trading is exactly what it sounds. Every day we follow the flow of the currency market during its most liquid hours in its most liquid instrument the EUR/USD. We trade between 5AM-12 noon ET (9GMT-16GMT) when the markets are most active and newsflow is heavy.
What is a Typical Flow Trade?
There are actually two types of flow trades that we put on. FLOW1 is a strategy designed to mitigate risk and uses short profit targets in order to help dampen to volatility. FLOW1 strategy is entered on a buy stop or sell stop with 15 point target and a 50 point stop attached to it. FLOW2 strategy is designed to go for larger profit targets with generally a lower accuracy rate than FLOW1. FLOW2 strategy is entered at market with a 30 point target and a 50 point stop attached.
Why Use Negative Risk Reward Ratio?
Our objective is to design a high probability trading strategy. While there is absolutely no guarantee that we can do that, the back tests of combined FLOW strategies have shown a better than 65% accuracy rate, making these negative risk/reward strategies net positive over time. However past performance is no way indicative of futures results and market conditions can change over time to render this strategy ineffective. In addition even in favorable environments the FLOW strategy may experience drawdowns and can sometime record 5 or more negative trades in a row.
How Many Flow Trades Are There Per Month?
The amount of trades depend to a large extent on the volatility of the market. FLOW1 strategy trades at most once per day. FLOW2 strategy can have several trades in row during highly volatile times. During slow, narrow ranging days the FLOW strategy may not trade at all. Overall FLOW strategy generally averages 1 trade per day.
Do You Have a Target of Pips Per Month?
We don’t set specific targets of pips per month. Some months may be positive and some moths may be negative depending on the market environment.
Do You Trade Any Other Currency Pairs With Flow?
Right now we only focus on EUR/USD which has the greatest liquidity and tends to trend well, but we may add other pairs in the future.
When Does This Strategy Fail Most Often?
This strategy runs into trouble when breakouts turn into fakeouts. Sudden reversals in price action caused by some change in economic, monetary or headline news can create whipsaw stop outs. It is important to remember that this is a normal part of speculative markets and you have to be patient and remain in the game to take advantage of the time when direction reasserts itself.
Why Is this Strategy Not Automated?
Flow Trading is very structured but it remains discretionary and we do not take every trade blindly especially ahead of key market moving events.
Why Do You Use Two Strategies for FLOW
We believe that the portfolio approach helps to reduce volatility and mitigate risk by providing a measure of diversification to Flow trading. By using two different target levels and execution styles we believe that we can produce a smoother performance in our intraday trading, although there is no guarantee that this approach will work as well in the future as it did in the past.
If you have more questions feel free to contact us.
May you be in the know and in the flow.