From the March 01, 2011 issue of Futures Magazine • Subscribe!

Software Review: Daily FX Trading Course

Daily FX Trading Course

Financial Square
32 Old Slip, 10th Floor
New York, NY 10005

OVERALL RATING: 4 out of 4

PRICE: Free to FXCM clients, but others can receive a 30-day demo account to the entire trading course.

LEVEL: Beginner-Amateur


Daily FX is a companion website of the broker FXCM that offers news, data, charting and commentary on the FX market. The Trading Course is free to clients, but outsiders can get a free 30-day demo account, plenty of time to take the full course ­which includes over 60 hours of video. Topics include indicators such as the MACD, RSI, Bollinger Bands and candlesticks. The course includes sections on range trading and the carry trade. It also has sections on trading the news and active trading, with Elliott Wave mysteriously sandwiched between those two.

Each subject has two videos with additional presentations by two or more instructors, so you can easily spend an hour on each subject. The site also offers webinars in which the instructor takes live questions.

The indicator segments are very well done, with simple but effective graphics. Definitions are demonstrated as they are being stated and indicator shortcomings are not neglected, such as the decreasing utility of MACD as the time frame is shortened. In a field where too much often is promised for an indicator, this is refreshing. By the time you have gone through the indicator videos, you have painlessly acquired a basic understanding of core concepts like trendedness and support and resistance, even if you are a beginner.

We sat up straighter on seeing the Active Trader video, which introduces “market depth” data showing live supply and demand in terms of number of contracts bid and offered. Since we do not get volume like equity traders do, this is very useful, even though we doubt that data from a single retail broker is really all that representative of the overall market.

The Active Trader platform also displays a proprietary “speculative sentiment index,” updated twice daily, that shows net long vs. net short positions and thus is akin to the CFTC’s Commitments of Trader Reports, only timelier. Again, the site claims that with 150,000 live accounts, the sentiment index is representative of the market as a whole — an exaggeration. The “speculative sentiment index” is used in a contrarian manner, since retail traders tend to trade the wrong direction. Market depth and the speculative sentiment index are original contributions and potentially of great usefulness, but we would like to see more evidence of their validity.

Conclusion: We can quibble with some aspects of the course, including the outline — money management probably should come first. Overall, the course is coy about how much capital stake is needed and what kinds of money gains and losses are to be expected from different approaches (like carry-trading and scalping), but silence on the subject is understandable as there might be implied liability and such calculations are contingent on current market volatility. It also would be nice to see some statistics on the performance of indicators, although with all the timeframes possible, we understand why it’s missing. The course should have a final video “putting it all together,” but perhaps that’s the function of the webinars. Finally, we couldn’t get the transcripts to print. On the whole, this is a worthy course and we will recommend it.

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