1. Automated Forex Robot Trading - Which Forex Robot is the Best of All?

http://forexautotrading.blogspot.com/2009_04_01_archive.html Automated Forex Robot Trading - Which Forex Robot is the Best of All? By: Kelly Price Automated Forex robot trading is big business and there are numerous ones for sale and the vast majority lose, so let find the minority that win and the best robot... We will look at our best trading system in a moment but first lets look at the Forex robot industry as a whole. The phrase Forex robots or Expert Advisors are new phrases, until recently automated software was simply called a trading system - but marketing needs a catchy name, so trading systems are now known as robots or expert advisors and the fact is any system that carries these names and has hyped advertising copy will lose you money. The claims are laughable - double your money each month, 90% accuracy and little or no drawdown and you only pay a hundred dollars or so, you know he claims are not true and so do most sensible people. These systems never produce an independent track record of gains - Why? Because these systems have never made any money long term. The best Forex Robot Trading System It's a free one and it doesn't actually call itself a robot, but it is an automated trading system and it does make money and has for over 25 years. Many of the pro traders use it and even trading legends like Richard Dennis admired it, so if you use it your in good company. It's called the 4 Week Rule and was devised by trading legend Richard Donchian. It only has one rule and here it is: Buy a new 4 week high - hold it. Wait for new 4 week low to be hit, then close the long and go short. Simply keep keying off new 4 week highs and lows and remain in the market at all times - that's it. Does it make money? Sure it does and it beats all the sold systems hands down because it is simple, robust and will always make money as long as markets trend. It's a simple breakout strategy which is a timeless way to make money. So why don't more traders use it? They like gimmicks, unrealistic claims and are duped by clever advertising copy. These traders forget that the proof of any system is in its performance and they like the made up sold track records. The savvy trader though knows, a system like the 4 Week Rule will make money and they use it long term to pile up big long term profits and enjoy currency trading success.

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2.

Donchian breakout trading system example (4 week rule)

(Turtle system)

http://www.seertrading.com/DonchianBreakout.html

The 4 week rule was developed by Richard Donchian and has been proven to be an effective base for many profitable trading systems. The original rules were used for trading commodities and can be summarized by: 1) Cover short positions and buy long whenever the price exceeds the highs of the previous 4 calendar weeks 2) Liquidate long positions and sell short whenever the price falls below the lows of the previous 4 calendar weeks As Seer is able to use multiple time frames the above rules would be expressed as:
BuyOpen if ClosePrice > Today(Highest(Weekly->High,4)); SellOpen if ClosePrice < Today(Lowest(Weekly->Low,4));

If run with a SAR (stop and reverse) money management strategy, the above system will always maintain a position in the market (either long or short). When the market is not trending the above system will produce lots of whipsaws which can drastically effect the performance of the system. A common solution to this problem is to enter on the 4 week rule (the breakout), and to exit on a shorter time frame such as 1 or 2 weeks. The following system implements this approach. The example also uses the more familiar use of 20 daily bars rather than 4 calendar weeks. This trading system is included in the example trading systems that come with the free 30 day trial EOD version of Seer. Once you have filled out this form simply download Seer to try this trading system.
#This system is based upon the 4 week rule by Richard Donchian #Rules: #Enter long when the close exceeds the high of the previous 20 bars #Exit long when the close falls below the low of the previous 10 bars #Enter short when close falls below the low of the previous 20 bars #Exit short when the close exceeds the high of the previous 10 bars unless (Position) { #we have no position, perform entry logic BuyOpen if ClosePrice>Yesterday(Highest(High,20)); SellOpen if ClosePrice<Yesterday(Lowest(Low,20)); } else { #We have a position if (LongPosition) { #We have a long Position, perform exit logic SellOpen if ClosePrice<Yesterday(Lowest(Low,10)); } else {

#We have a short Position, perform exit logic BuyOpen if ClosePrice>Yesterday(Highest(High,10)); } }

3. Four-Week Rule Boosts Winning Trades

http://www.investopedia.com/articles/technical/02/052102.asp

Trading systems are usually thought of as complex computer programs requiring massive amounts of data to calculate the best entry and exit parameters. But in trading, often the best solution is the simplest. In fact, one of the best known trading systems doesn't even require a computer to run. Read on as we take a look at the weekly rule system and show you how this simple system can help you profit from a trade. Profiting From the Trend Trend following is a well-known concept underlying many successful trading systems. Probably the first such system was the weekly rule devised by Richard Donchian. Test results for this system were published as early as 1970, and it was found to be the most profitable system then known. Donchian was called the "father of modern commodities trading methods," and was the first to manage a commodities fund that was available to the general public. He is believed to have developed the idea of trend following systems in the 1950s. The Strategy The weekly rule, in its simplest form, buys when prices reach a new four-week high and sells when prices reach a new four-week low. A new four-week high means that prices have exceeded the highest level they have reached over the past four weeks. Likewise, a four-week new low means prices are trading lower than they have at any time over the past four weeks. This system is always in the market, long or short. Known simply as the four-week rule (4WR), this is the exact system designed and used by Donchian. This strategy will consistently be on the right side of all the big moves in a market. However, the strategy also has a low percentage of winning trades. The problem is that most markets trend about one-third of the time. In some markets, the 4WR may be right less than 40% of the time. The other trades are usually small losses, which occur while the market consolidates with choppy price action. (For more, see our Trading Systems tutorial.) Using the Four-Week Rule As an example of the 4WR, we can look at Google (Nasdaq:GOOG) in Figure 1. This shows a typical winning long trade. When a new four-week high was reached, GOOG was bought; it was sold about 10 weeks later when it made a new four-week low. The trade resulted in an impressive 18% gain. The problem with this trade is that it was up by more than 30% at one point, and gave back nearly half its profits before giving a sell signal.

Figure 1: Daily chart of GOOG showing four week rule signals Source: http://www.genesisft.com/ The 4WR can work equally well on the short side. In Figure 2, we see a winning trade in Goldman Sachs (NYSE:GS). This trade also resulted in a win of more than 18%. But it had been ahead as much as 25% and was closed after giving back a significant portion of the profits.

Figure 2: Daily chart of GS showing four week rule signals Source: http://www.genesisft.com/ Refining the Strategy One way to address the problem of staying in a trade too long is to change the exit rules. Instead of following the original 4WR to exit a position, traders can exit when a moving average is broken. For example, applying a 10-day moving average as the exit criteria on the GOOG trade shown in Figure 1 would have increased the profits on that trade by about 25%. A 10-day moving average was selected because it is one-half of the entry signal (four weeks is 20 trading days), but any time period shorter than the entry signal can be used. (For background reading, see the Moving Averages tutorial.) Trend Filtering Another use of the 4WR is as a trend filter on the overall market. For many traders, it can be a challenge to determine whether the market is bullish or bearish on a short-term basis. Applying the 4WR allows traders to objectively define the trend. If the market's most recent signal under this system is a buy, the trader can be confident that the market is in an uptrend. Downtrends can be defined as times when the latest 4WR signal was a sell; in other words, the market has made a new four-week low more recently than it made a new four-week high. Using the 4WR as a filter, the trader would look for the 4WR to be on a buy signal before entering new long positions. Short positions would only be entered when the market is on a 4WR sell signal. Finding Longer Term Trends This versatile system can also be applied to identify the longer term trend. This can be done by

applying Dow theory, a widely followed barometer of the health of the market. Analysts look for the action in the Dow Jones Transportation Average to confirm the direction of the Dow Jones Industrial Average. When both averages make new highs, we are in a confirmed bull market. New lows in both averages signal a confirmed bear market. Divergences between the averages lead most analysts to express caution about the trend. (To learn more, read the Dow Theory tutorial.) One problem with applying Dow theory is that the rules are subjective, depending on how an analyst defines a new high or new low. It is possible for two skilled practitioners to look at the same charts and disagree on the signals. Applying the 4WR prevents this possibility. Rather than subjectively determining a new high or low, the 4WR defines, in advance, when a signal is generated and all analysts using the 4WR will arrive at the same conclusion. Conclusion The 4WR makes a great addition to any trader's toolbox. All traders should consider adapting the 4WR to their trading styles. Keep in mind that there is nothing magic about four weeks. Traders may choose to use signals based on shorter or longer timeframes. Entry and exit signals can be asymmetric, for example entering on 4WR signals but exiting on two-week new lows. As noted, moving averages can also be used to generate exit signals. The 4WR can be combined with indicators, such as the relative strength index or moving average convergence divergence, as a filter on these signals. The possible applications of the 4WR are limited only by the trader's imagination, so experiment a little and find out which system produces the best results for you. 4. Richard Donchian's : The 4 Week Rule

http://www.marketcalls.in/2009/01/richard-donchians-the-4-week-rule.html

The 4 week rule, developed by Richard Donchian, is one of the most successful systems tested by time. The 4 week rule is used primarily for futures trading but might also work in your stock trading system .The Turtles used the same strategy in the eighties. Donchian's strategy was to "buy when a
stock made a 4 week new high" and his exit rule was " sell when it makes a two week low". This system is

simplicity at its best:

1)Cover short positions and buy long whenever the price exceeds highs of the four preceding full calendar weeks. 2)Liquidate long positions and sell short whenever the price falls below the lows of the four preceding full calendar weeks.
The four week rule has proved to be an effective building block on which many successful trading systems are based. It's based on the following assumptions about market behavior: 1. The strongest trending moves start from new market highs NOT market lows. Those people who think buy low sell high is a great way to make money are wrong. If you don't buy breakouts from new highs, you will miss some of the best trends period. 2. A trend in motion is more likely to continue than reverse. We all know this is a basic building block of technical analysis and there is no better trend than one that is making new highs 3. A four week cycle is the dominant cycle in trading. This can vary at times of course but the four week cycle is highly effective. The original rules were used for trading commodities and can be summarized by: Cover short positions and buy long whenever the price exceeds the highs of the previous 4 calendar weeks. Liquidate long positions and sell short whenever the price falls below the lows of the previous 4 calendar weeks. The original system being devised for commodities was designed to use a stop and reverse so the trader

was always in the market with a position. In a non trading market it can get whipsawed a solution to this problem is to enter on the 4 week rule (the breakout), and to exit on a shorter time period such as 1 or 2 weeks. With this system, a four week "breakout" would be needed to initiate a new position, but a one or two week signal in the opposite direction would mean liquidation of the position. The trader then remains out of the market until the next new four week breakout is registered. Why It Works This system is based on sound technical principles with signals that are mechanical and clear-cut. It is trend-following so a trader is virtually guaranteed to be on the right side of every trend. It also follows the often quoted trading wisdom "let profits run, while cutting losses short". Another advantage is fewer trades, which means less time being spent looking at the market and finally you don't even need a computer! People often say technology helps but for many traders its a hindrance they think being clever will make them money, well consider this 95% of traders lost 100 years ago and the its the same ratio before yet computers today are more powerful than the one mission control used to land man on the moon! Don't be fooled by simplicity it can be very profitable. Being a trend-following system, it is not going to catch market tops and bottoms ( but how many systems do that though?) however, the 4 week rule works as well as any other trend-following system but with the benefit of incredible simplicity. The Proof You might be saying that won't work well go and try it on a strong trending currency market like the euro, Canadian dollar or Australian dollar and back test it and in a number of strong trending markets and you will see it does. Don't be led to believe that if its simple it won't work all the best forex trading systems are simple. You don't get paid for being clever you get paid for being right Period. Today, traders always like to trade something different or obscure but if you want a simple system, by a trading legend, that's hard to beat try Richard Donchian 4 week rule It's been part of some of the true great traders box of tools and should be in yours to.

http://tradeswitchfx.com/2009/09/29/4-week-rule-for-forex-money-making/ Many forex traders are in a search of finding a magical formula for money making. If you want to know all about reading trading signals their interpretation and the way to big profits in forex market. Then just go through all that is written below. There are the points which are going to help you strong enough to make biggest profits in the forex world. There are big trends that are visible on the forex trading charts lasting for weeks, months and even years. These trends are the outcome of the breakouts in the market which takes the market to the highs and the lows. Now here is a look at the signal of the big trend which can fetch you amazing results and outstanding profits. There is a very simple 4 week rule that generates the signal. All you have to do is buy a currency pair that is in the position of 4 weeks high. Then you have to keep a hold on it for the time till when a 4 week low had a hit when the position has hit the 4 week low you are supposed to liquidate. You have to liquidate the long and then you have to put the short position in to the market. Once you are up with all this you have to reverse your position. Then keep on reversing whenever the next 4 week hits the low or the high and continue doing this till the positions of next 4 week hits the high or low. To use this strategy you need to have open position as this is a stop and reverse system. To use this rule you dont really need a computer as these calculations can be done easily on the

5. 4 week rule for forex money making

paper with the help of a calculator. This simple trading system can make you good profits from the big trends in the market. The simple systems when compared to complicated ones are more preferred and appreciated in forex market as they make good profits and outcomes. The one we talked about above is very simple to use and since it provides you handsome results and good income it is preferred and chosen. This is advisable for most of the traders of the forex market. You need to have patience if want to be successful in the forex market. This strategy does not include time frames and deals with long term investments. But since some forex traders are impatient and want an active participation they need to realize that the forex market success is not meant for you. If you really want to be successful you should learn to wait use this trading signals and get your income increasing.