FIXED RANGE - FOREX TRADE CALCULATOR

in-depth view for forex tool #10
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This is one of the forex trade calculation tools in the kit, it is designed for the situation when the chart is going sideways, creating a horizontal channel with clear upper and lower boundaries.

The tool completes a trade setup with respect to the active money management plan, generating take profit rate & stop loss rate & position size, complying with the active checkpoint's thresholds.

To ensure trading consistency, the tool operates using the active money management thresholds by default, with the ability to override those thresholds if needed.

This page will cover everything regarding this tool in details, covering the data flow from/to the tool, the purpose of the tool, and the tool's contents and structure. All screenshots used will show just the part of the tool being explained, a native screenshot for the tool as a whole can be viewed/saved using the link above.

TOOL's DATA FLOW

The below illustration details the type of data flow between this tool and other tools directly connected to it, to see the bigger picture for the whole toolkit's data flow please check this illustration.

Detailed data flow from/to "Fixed Range" forex trading management tool

detailed data flow from/to "Fixed Range" forex trading management tool

By default, the tool process all calculations according to the risk threshold recieved from "Active Trades" tool for the active checkpoint. Options to override risk threshold is available when needed.

When a trade setup is created using the tool, it can be imported by either "One-to-Many" or "Active Trades" tools. Once the trade setup reaches "Active Trades" tool, the current checkpoint's standing and remaining risk will be updated and populated to all the trading tools.

TOOL'S PUPROSE

When a chart don't have a clear trend, most likely a horizontal channel will be created with clear upper and lower boundaries(rates), where the price movement will keep bouncing between those boundaries until a break happens and a new trend is initiated.

When that is the case, this tool comes into play. The tool will use the upper and lower boundaries' rates, in addition to the desired entry rate and safety pips, then apply the current checkpoint's thresholds to produce the logical position type & position size & take profit rate & stop loss rate.

It is important to understand that the tool isn't providing a forex trade setup idea, none of the tools in the kit will ever generate ideas on the user's behalf. This is purely a mathematical process since the tool doesn't know the actual sturcture of the chart or the forex market conditions, it gives calculated values meeting defined consistent trading conditions, that generated output should be analyzed on the chart to decide if that trade setup is worth entering or not.

TOOL'S CONTENTS & STRUCTURE

In-depth demonstration for the 5 sections of the tool

This tool consists of 5 main sections, 1: control panel to manage currency preset and forex brokerage account to be used, 2: trade setup section where the trade's data is entered and outputs are generated, 3: broker status section where the margin details and possible outcomes of the trade are shown from the brokerage account point of view, 4: money management section where the possible outcomes of the trade are shown from the money management point of view in addition to overriding options, and 5: money management status section which shows the active checkpoint's status for reference.

To demonstrate the tool, all the screenshots below will show an example trade setup for USD/CAD pair, on 22-Apr-2016. Both of the tool's dominant currency and the selected forex brokerage account base currency are (USD), which makes this example simpler and easier to calculate compared to the more complex examples used for "Stop Loss Rate" & "Take Profit Rate" tools.

1: CONTROL PANEL

"Fixed Range" forex trading management tool in-depth: setting currency preset

setting currency preset

SETTING CURRENCY PRESET

In this part, the currency preset to use for calculations is chosen from the 6 configured presets.

The information panel shows the structure of the chosen preset for reference. Since a single currency preset can be used for many currency pairs sharing the same structure, the currency preset chosen here doesn't have to reflect the actual name of the pair being traded, the actual traded pair's name is set in "Active Trades" tool once the trade is imported there.

"Fixed Range" forex trading management tool in-depth: setting broker preset

setting broker preset

SETTING BROKER PRESET

In this part the forex brokerage account is selected from any of the 6 configured presets. The chosen account will be used for all calculations done by the tool for the trade setup. This can be helpful in deciding the best account to use for that specific trade by knowing the margin details and how far that trade will be from a margin closout, all calculations are done instantly as the different brokerage accounts are selected.

The information panel for this option shows the total balance in that account, how much is that balance worth compared to trading balance, leverage, margin closout, and available margin. Balance for the selected account can be directly updated in this part, where the new balance will be saved for the selected brokerage account and will be populated to the whole toolkit instantly.

2: TRADE SETUP & INFORMATION

"Fixed Range" forex trading management tool in-depth: Trade setup

trade setup

TRADE SETUP

This is where the trade setup is entered, inputs are the upper and lower boundaries' rates, entry rate, and safety pips.

There is always a possibility that some price jittering will occur around the boundaries, where the price might reverse direction a few pips before or after a boundary. That is why safety pips are entered in the trade setup, calculating take profit and stop loss rates will be done with respect to the boundaries and safety pips, where stop loss rate will be the rate representing safety pips added beyond the stop loss boundary, and take profit rate will be the rate representing safety pips before the take profit boundary.

The "USD placement" option is dynamic and the currency will change according to the base currency of the chosen brokerage account, this allows the tool to calculate pip value and margin details correctly.

When a trader uses multiple forex brokerage accounts then most likely the reason is to use an account with a base currency matching either the base or quote of the traded pair, which is the case in our example where the traded pair contains USD, the same currency of the chosen brokerage account. However, in case of having a single brokerage account and wanting to trade a currency pair where both its base and quote currencies are different from the brokerage account base currency, option "xxx/yyy" can be selected and the structure and exchange rates for both of the pair's base/quote are entered with respect to the brokerage account currency.

The information panel will display information and error messages that might occur while entering base/quote exchange rates.

"Fixed Range" forex trading management tool in-depth: Range information

range information

RANGE INFORMATION

This part shows the technical aspects of the specified range.

  • Pips to top: pip length from entry rate to upper boundary.
  • Pips to bottom: pip length from entry rate to lower boundary.
  • Pip range: pip length between upper and lower boundaries.
  • Logical position: short or long, according to pip length between entry rate and both boundaries.
"Fixed Range" forex trading management tool in-depth: Trade information

trade information

TRADE INFORMATION

This part shows the technical aspects of the trade.

  • Take profit rate: calculated according to safety pips before target boundary.
  • Stop loss rate: calculated according to safety pips after loss boundary.
  • Position size: calculated according to active risk threshold.
  • Position type: logically generated with respect to profit & loss pips, can be overriden.
  • Profit(pips): pip length from entry to take profit rate.
  • Loss(pips): pip length from entry to stop loss rate.
  • Reward:Risk: R:R ratio.
  • Pip value: value of a single pip according to the current setup.

The information panel for this part will inform if the risk threshold isn't enough to enter the market with the smallest possible position, or if the balance in the selected brokerage account isn't enough to cover the margin requirement for the calculated trade setup. It will also inform if there are any errors in the values entered for the trade setup.

3: BROKER STATUS

"Fixed Range" forex trading management tool in-depth: Possible outcomes - brokerage account

possible outcomes - brokerage account

POSSIBLE OUTCOMES

This part shows the possible outcomes of the trade setup from the brokerage account point of view.

  • Profit(%): expected profit percentage compared to brokerage account's balance.
  • Profit(cash): expected profit in brokerage account's base currency.
  • Loss(%): expected loss percentage compared to brokerage account's balance.
  • Loss(cash): expected loss in brokerage account's base currency.
"Fixed Range" forex trading management tool in-depth: Margin status - brokerage account

margin status

MARGIN STATUS

This part shows the margin required for that trade setup and the margin remaining. It also gives a heads-up regarding how far away the trade will be from a margin closeout in both pip length and rate, which can help with deciding if that trade will be safe enough in case the market went extreme for one reason or another.

  • Margin requirement: required margin for the trade setup.
  • Margin remaining: margin remaining after subtracting the required margin.
  • Margin CO(~pips): pip length from entry rate to margin closeout rate (approximate).
  • Margin CO(~rate): margin closeout rate (approximate).

4: MONEY MANAGEMENT

"Fixed Range" forex trading management tool in-depth: Possible outcomes - money management

possible outcomes - money management

POSSIBLE OUTCOMES & EXCHANGE RATE

This part shows the possible outcomes of the trade setup from the money management point of view.

  • Profit(%): expected profit percentage compared to trading balance.
  • Profit(cash): expected profit in trading balance currency (toolkit's dominant currency).
  • Loss(%): expected loss percentage compared to trading balance.
  • Loss(cash): expected loss in trading balance currency (toolkit's dominant currency).

"update rate" option is automatically enabled only if the selected brokerage account's base currency is different from money management currency. Entering the exchange rate and clicking update will instantly recalculate the trade setup's possible outcomes with respect to trading balance, and the new exchange rate will be saved for that brokerage account's preset. In our example, the traded pair contains the base currency of the selected brokerage account, thus the update button is disabled.

"Fixed Range" forex trading management tool in-depth: Overriding money management

overriding money management

OVERRIDE MONEY MANAGEMENT

By default, the tool will process all calculations with respect to the current checkpoint's thresholds, this ensures trading with consistency in mind. However, options for overriding those thresholds are available, as needed.

  • Trading balance: override the brokerage account's balance.
  • Risk(%): override risk percentage, very helpful in dividing planned risk among multiple trades.
  • Position type: override(reverse) the logical position generated by the tool.

"Values in use" will show the active value used for the adjacent option, showing the default value if no overriding is done, or the value used for calculation according to the entered override value.

"Fixed Range" forex trading management tool in-depth: Daily borders/thresholds chart

daily borders chart

DAILY BORDERS CHART

This chart shows the most recent 9 checkpoints closures and the thresholds for each of them, and the thresholds for the active checkpoint. This gives a visual representation of how consistent trading was lately.

5: MONEY MANAGEMENT STATUS

"Fixed Range" forex trading management tool in-depth: Active checkpoint's data and thresholds

checkpoint's data and thresholds

CHECKPOINT'S DATA & THRESHOLDS

This part shows the data recieved from the money management tool "Checkpoints" when a new checkpoint is opened, all the values here never change starting from the moment a new checkpoint is opened till it is closed.

  • Trading balance: balance at the active checkpoint's opening.
  • Risk%: risk percentage with respect to trading balance.
  • Cash at risk: risked cash for the active checkpoint.
  • Profit %: target profit percentage with respect to trading balance.
  • Target profit: target profit for the active checkpoint.
  • Reward:Risk: default R:R ratio used by the trading tools.
"Fixed Range" forex trading management tool in-depth: Active checkpoint's standing

checkpoint's standing

CHECKPOINT'S STANDING

This part shows the current checkpoint's standing according to both closed & active trades, as well as remaining risk that can be used for more trades.

  • Closed: output of all closed trades during the active checkpoint.
  • Active risk: total risk for all the current active trades.
  • Collective: total output of both closed & actived trades.
  • Checkpoint output: status and percentage of closed trades, with respect to the checkpoint's opening balance.
  • Safe to risk: remaining risk that can be used for trading.
"Fixed Range" forex trading management tool in-depth: Breakeven line and target curve chart

breakeven and target chart

BREAKEVEN & TARGET CHART

This chart shows the most recent 9 checkpoints closures, plotted with both the breakeven line and target curve for the current money management plan, giving a visual representation for recent performance with respect to the current trading cycle target.