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понедельник, 3 мая 2010 г.

How to get lucky by the tail, when the market surprises

Picture of life - you analyzed the situation and expect the breakdown. You may have even discovered the head with his shoulders or double bottom. In any case, the final decision is made, and you just sit and wait.

Suppose you find yourself on the chart box and wait for a breakthrough. You have already positioned their orders at the right level and with the break up you will be redirected to long positions. Your conclusions are based on the clock schedule and you often checked to him, to see whether there is movement.

And then - again - the market starts to move upwards. Activated your order to buy, and you open a long position. You look at the market and make sure that your stop-loss order in place. But then suddenly, without warning, the same bar, which gave you the feeling of wealth, turns around and begins to move down.

Since the direction has changed, you know that your feet will work - what happens. All open positions you no longer have. You are targeting to open the next position or in search of a new model: but wait - you just missed an excellent opportunity.

In this lesson, I would like to tell you how you can win, when all the other losers. That's the theory. Most traders in the course of trading shall take into account only their own conclusions. Some idea stuck in their heads and sit there.

If so, they decided that they will be taken by the breakdown in long positions, then so be it. This is particularly well-protected technical levels, such as, for example, 52-week minimum or maximum. Or the trend-line or graphical model. Basically speaking, any important technical level.

If you are running only one or two markets, you know what I mean. Even if you do not listen to other traders, you'll have some idea of where the general view. there are levels of resistance or support of major currencies.

Remember that trading is like nothing else, gives an idea about the laws of human behavior. Once one of these important levels will be breached, all together will take a position with the right side. Here we reach the heart - be careful, it's important.

When the market is doing what you expect from him, there is a chance that it is to do something opposite.

For example, let us return to our example, when the breakdown occurred a transition to long positions and, in the end, everybody was a loser.

To get out of this benefit, we need two plans. Plan A and Plan B. As you may have guessed, Plan A - to go along with the crowd: if the market dramatically changes the direction of motion, and you are projecting, you can do is to recognize the power of the crowd. You have thought through the entry point, the level of stop-loss and a likely target level.

Plan B is more sophisticated. If the market will make a breakthrough in the other direction, you must also be a strategy of action.
The chart above we see the downtrend, alternated consolidation. Price goes down, forming a support, and then again rises to the upper trend line.

It is often replaced by the consolidation of a breakdown in the direction of the trend, so it is not so stupid, is planning to remain down, that the market is doing. This brings us to the conclusion of open short positions, the stop can be positioned at the previous resistance, and the target level - at the bottom of the difference between support and resistance.

But what happened next.

Instead of continuing to decline, the next bar becomes reversal.

With two-way reversal first reversal bar should be located at the end of a strong downward movement. Closing must occur near the minimum of the first bar. Preferred that this minimum has been a recent new minimum. The second bar due to open around the closing level of the closing of the first bar and fully compensate for its decline, closing near its maximum. No need to make sure that this was a reversal bar that the scheme worked (see illustration).

Well, now the market is in a completely opposite direction to that which we had expected. Being opportunists (and they should be all good traders), we have closed short positions and opened up long with a stop below the minimum abortive breakdown.

Now we have long positions with stop-loss, but we also need and target level. The first target level, I would be located on the previous level of resistance. The reason is simple. Can start a long period of consolidation and price will fluctuate between support and resistance.

However, as was a failed two-bar reversal can I hold long positions in and see what happens at the level of resistance. Depending on market conditions, you can also add a warrant for his long position.

So it is important to always be ready to wrap himself for the benefit of any market movement. When you encounter invalid breakdowns of the trend line, lines, support / resistance or unconfirmed models - always have a backup plan. Do not just watch the actions of the market, use them for the benefit of themselves.

I know some traders who just do so. They calculate the market movements, which are obvious to all, and then benefit if the opposite direction of the same market.

воскресенье, 2 мая 2010 г.

Ranking of currency pairs

We all know that the forex market - a huge market with many traders and players around the world, trading privately or professionally.

Over the past few years we have witnessed a strong development of direct sales via the Internet by all kinds of trading strategies using the latest technologies and software.

Only one thing remains unchanged - how to make the best deal.

Many traders are concentrated in deytreydinge only one currency pair, trying to squeeze the maximum out of it with all the power of software, technical indicators, (automated) trading systems and strategies for managing capital.

In this article I would like to show you a very simple way to at least remain in the correct direction of the trend of currency market for the possibility of taking profit from this trend. We will consider not just a few currencies and shall analyze the main pair and the main so-called cross-training.

As you know, the diversification of currencies in the portfolio spreads risk.

For example, in the portfolio, consisting of five currency pairs, the two positions may be currently unprofitable, but the other three may show profit, offsetting losses from the losers.

All graphics and strategy in this article are based on daily data, as well as the closing day on forex is used during the closing Dow Jones on New York (20:00 GMT).

Of course, you can create your own daily data, using a different time of closing, which you like. This feature is built into most programs, technical analysis.

To conduct the ranking basket of currencies, they must be measured the same way. Only then can compare currencies with each other.

Since we do not like to complicate in this article as the main indicator for all currencies in the basket will be used by RSI.

However, by itself RSI on daily data can be very volatile, so we are looking for a more gentle way to track the strength and weakness of each currency.

The next graph in the upper part we show the price of spot EUR / USD, and at the bottom - a standard indicator RSI.
Standard computed RSI bit variable for this analysis, but we would like to measure all the currencies in the same way. To smooth the RSI, we add two simple moving averages. One - a 10-day simple average, and another - a 30-day simple average.

The next step is to use these two averages to create a ratio of strength and weakness of the currencies under study. To do this, divide the 10-day moving average at the 30-day and multiply the result by 100.

The next graph, we see the ratio in the bottom of the chart more smoothly and gently reveals signs of strength and weakness of the market.
All analyzed currencies are measured in the same way, so we can compare them by comparing their relationship.

Now that the software that you are using may simply display in real time all the analyzed currency.

The ratio of RSI gives us a hint about the direction, but we would like to have a second and a hint of the rate of exchange.

Currencies may be long or short that determined by the position the line ratio above or below zero. The question now is this - in any currency is the highest speed or momentum?
It turns out that the ratio of RSI has changed from 112 to 110, and the momentum from 104 to 100, becoming a little weaker, but nevertheless, this is the strongest currency in today compared with yesterday's calculations.

Different colors in the table show the ratio RSI market higher or lower than 100.

Using this table, we get a good glimpse of what the currency markets are strong and which weak.

Depending on the size of your account, every day you have long positions on the four strongest markets and short positions in the four weakest currency pairs of your portfolio by adjusting the position of necessity.

Adjustment is carried out on this day, every day at the same time.

Conclusion:

Practically, you hold in its portfolio four strongest currency pairs in long positions, and four weakest - in short, adjusting portfolio on a daily basis as needed.

When trading this way risk is distributed across the portfolio has been significantly reduced compared to trade one currency pair.
Now we add to the calculation of the pulse.

суббота, 1 мая 2010 г.

Forex School

Forex market has recently become known. And if you're reading this, then he and you are intrigued by its profitability. You probably came to learn how you can make money on it.

I will not write when it was formed, how much exists, its turnover, we are not so important. Most importantly, we learn to make the forex market.

First you need to get on the Forex market. This is very simple. In our country, many companies that offer access to trade the forex market. Terms and reliability of these companies is different. Many people ask me: how to choose a company in which to open an account?

I can only reply, as I do. I go to the website under "about us" and read. I choose the companies that do not exist in the first year, it is a guarantee that the company does not ephemera, and will not go away with my cash. Next, I look, whether a license is granted, many large companies that provide market access to forex, spread on a site as much information about yourself. After that, I see the conditions of access to forex markets. If the company provides a very highly competitive environment, we can begin to doubt it. If the company takes great commission, night, spread, etc., I shall hardly work with it. Next, I go to the "News" section, reading the pace of its development and the situation at the moment. Since then I have been studying the software, because with it I will need to work daily on the forex market. I also go out to a forum of the company, read testimonials of people about the company. If I agree and I go to "account opening", read the contract and if I am feeling that all suits me, I open an account and start trading on the forex market.

Eventually, you'll be earning in the forex market, be sure to open 2-3 more accounts and play them in turn. This will guarantee that if the company closes, you will not stay in a fool, because you already have time to return all the money invested and to take away from the company yet. Here's how: Suppose you invested 3000 rubles for the forex market, won the 3100 top, lifted them to your bank account. Now, you're already so in the black, even if the company closes, you returned their money and little taken with her.

When you choose a company entered the market Forex, the most business start earning. I miss the time learning about him, I said in other articles.

Forex market differs from the stock market, bonds, futures. Its main differences - this technology works and availability. In the forex market is easy to get. On the stock market to get more complicated.

In the forex market can earn two ways:
Betting on the event. That is, the EURUSD currency at 10:00 am will be higher than at 11:00. There are companies that are doing it.
Have a profit from each item movement. That is, if the opening bid EURUSD was at around 1.1200, and an hour will be at around 1.1220, then for every point of the movement you win or lose money. If the contract was purchased to improve, then you earned 20 points (spread not consider), but if you opened up for a fall, then lost 20 points. The amount of one item is chosen by you. The more money invested in the forex market, the more expensive one point.

On the stock market a little different scheme, but this will not. We came to make the forex market, let's not confuse ourselves.

Forex - is just a schedule, which reflects the expectations of millions of people. Some involved in the trade, showing its expectations, while others sit and wait for the right moment, too, showing their expectations. Forex market - a market of people. If there are no traders (all who carry out transactions on the forex market), graphics stop.

Forex market does not wish anyone evil, goodness, he is cold, he does not know about you anything. If you lost and angry at the forex market, it is useless to get angry at myself. It is better to take it, find the cause of loss, and more it is not repeated.

Every trader in the forex market wants to win money, and he does not think getting rid of you, the winning company pays him.

On the forex market, written numerous articles and books, I only mention three important points:
Selecting a mediator between you and the forex market.
Ways to earn money on the forex market.
The structure of the forex market.