Analysis shows that trade foreign traders, stable and profitable trading is achieved through technical analysis. In today's article I will tell her about the safest (in terms of money management) way of trade - Trade with the trend.
Many newcomers are likely to have heard the phrase "trade with the trend," "trend - your friend." It really is true, time-tested. It's no secret that the price can not last move in one direction, especially in a straight line. Correctly determine the trend does not take much, and if you learn how to do it, and will trade on trends - it will never be at loss.
Due to this there are trends? This is what I mentioned in one of his past articles. Major players in the market - investment funds, international banks from different countries and private investors are pouring big huge amount of its capital in long-term trade. That they move the market, creating a long-term trends. Small traders with small capital is simply not do. So, all that remains to us - this is a follow up major players in the market, and then you just do not stay at a loss.
At first glance, it seems extremely difficult to correctly guess their mood - where the big players bought and how long they will be in the market - one or two months or six months. But the story is known to be repeated. And today, I'll tell you how to display trends and use them for the benefit of their trade.
The main objective of the correct trend trading is to determine the formation of this same trend. The sooner you notice a trend price move in one direction - to buy or sell - the more you can earn on this trend. The second major point of trade with the trend - is to identify the price range of the likely price movements in established trend.
Trends are:
1) for the duration:
- Long-term (more than 6 months)
- Short-term (up to 2 weeks)
- Medium
2) the direction of price movement:
- Rising ("bull" or up trend)
- Top-down ("bear" or down trend)
- Side (flat)
For the proper construction of the trend must correctly identify and mark two lines - a line of support (Support) and the line of resistance (Resistance). Proper identification and construction of the lines is one of the main tasks of the technical analysis. Support line and resistance line in addition to technical lines are psychological levels of literacy for all traders, techies, who are guided by them, and often sell only to them.
Support line. Pass on important market lows. Opening the schedule, you can easily keep track of any time period the lowest price points, from which the price as the ball bounced up sharply. Draw a line on them. This will be a support line. Probability of breakdown support line is much lower probability of a rebound from it. It is important to remember and one more rule - if the price is still penetrates the support line and goes down, it turns into a resistance line - that is, the price will already be in the future be below it, and fight back from that line down.
Line of resistance. Pass on important highs (peaks) of the market. Carried out just as the support line, only the top-most price points, from which the price bounced several times down. Probability of breakdown resistance line is much less likely to rebound from it. If the price breaks through the line and goes up, the line resistance becomes support line, from which the price in the future will have to beat up.
What is the correct way to identify and build support and resistance lines?
• First, to properly identify the trend - downward, upward or sideways.
• Second, because these lines you can make and implement its future trading plan. Calculate the point of entry and exit in the transaction, see what the maximum and minimum stop-loss and take profit, you can set for each individual transaction.
• Third, if the price breaks the support line and resistance line, it clearly indicates a change of trend. Often, the trend changes at once, sharply, but gradually, and therefore the price can later return to the old trend, and in the future to continue to draw a new trend. Always be ready for it, do not risk their own capital once again.
Very often, support and resistance lines depict the channel - when these two lines are parallel to each other clearly. Channel - an ideal situation for any trader, trading with technical analysis. In this case, clearly visible to the point of entry into position and point of exit from it - which means you can get from the deal the maximum profit with minimal risk. When the channel breakout price breaks it immediately to the 60-80% width of the channel, and if you get up in such a transaction, you can get a good profit.
The rules of successful trading with the trend
1. A thorough background check before making a transaction.
Under scrutiny is meant to mandatory testing your trading system. Develop and implement their own rules for your trading. Scroll down the price chart back in history and see how the rules would have worked on your dozens of deals in the past. If you are not confident in your trading system, how can you be sure of the result? Do not allow yourself to trade on the system, which did not pass the test.
2. Concentrate on one thing. No tradeoff.
Think about any specialist professionals. How old is he doing something one is not throwing in many directions. He concentrates on only one area of activity.
If you are going to make money on the forex market is stable and profitable, you must give your full attention of one currency, one trading system, a single date range. Examine carefully selected currency. Test your trading system on dozens of historical transactions. Choose to start a date range. And then you become an expert in your trading system, in a time range for the chosen currency pair. After that, you are 100% confident in your trading system, and will need to trade profitably.
3. At different time frames are different trends.
This rule is a continuation of the previous one. At different time ranges can often be different trends. Globally (on a daily, weekly, monthly chart) EUR / USD pair may go up, while at 5 or 15-minute chart may go down. It is therefore important to begin to choose a time period.
If you combine trading in the Forex market with the main work, then you are more suitable for trading daily and weekly charts. Such trends are usually long, but they bring a lot more profit, often exceeding 1000 points. If you have the ability to trade during the day, feel free to choose short-term schedules.
4. Trade with the trend requires precision and patience.
If you decide to become a trend trader, you must have patience and wait for the only good movement on the trend. If you are at this time will make deals with other trading systems, you can not become a master in the trade with the trend. You'll always miss the input and output trend in the transaction, engaged in other transactions.
Set up a pre-process waiting on the development trend, and then monitor its development. Monitor the situation. Do not miss the transaction and do not forget to minimize risks. Begin to sell a small amount per transaction, so if the price is temporarily going against you, you were able to safely wait it out and not lose too much money.
5. Listen to only yourself.
Many, having read analysts' forecasts of different agencies often miss great deal, fearful that said that "the trend of the dollar rising," and they in their time period defined downtrend. These people do not know your trading system, do not know in what time frame you are trading. They do not operate your trading account, and be liable for your losses in case of an incorrect prediction, too, will not work! So be careful not to get carried away reading the predictions, analyze all incoming information to you and pick and choose how you act.
Abstract:
Analysis shows that trade foreign traders, stable and profitable trading is achieved through technical analysis. In this article I will talk about the safest in terms of money management method of trading - trading with the trend.
Many newcomers are likely to have heard the phrase "trade with the trend," "trend - your friend." It really is true, time-tested. It's no secret that the price can not last move in one direction, especially in a straight line. Correctly determine the trend does not take much, and if you learn how to do it, and will trade on trends - it will never be at loss.
Due to this there are trends? This is what I mentioned in one of his past articles. Major players in the market - investment funds, international banks from different countries and private investors are pouring big huge amount of its capital in long-term trade. That they move the market, creating a long-term trends. Small traders with small capital is simply not do. So, all that remains to us - this is a follow up major players in the market, and then you just do not stay at a loss.
At first glance, it seems extremely difficult to correctly guess their mood - where the big players bought and how long they will be in the market - one or two months or six months. But the story is known to be repeated. And today, I'll tell you how to display trends and use them for the benefit of their trade.
The main objective of the correct trend trading is to determine the formation of this same trend. The sooner you notice a trend price move in one direction - to buy or sell - the more you can earn on this trend. The second major point of trade with the trend - is to identify the price range of the likely price movements in established trend.
Trends are:
1) for the duration:
- Long-term (more than 6 months)
- Short-term (up to 2 weeks)
- Medium
2) the direction of price movement:
- Rising ("bull" or up trend)
- Top-down ("bear" or down trend)
- Side (flat)
For the proper construction of the trend must correctly identify and mark two lines - a line of support (Support) and the line of resistance (Resistance). Proper identification and construction of the lines is one of the main tasks of the technical analysis. Support line and resistance line in addition to technical lines are psychological levels of literacy for all traders, techies, who are guided by them, and often sell only to them.
Support line. Pass on important market lows. Opening the schedule, you can easily keep track of any time period the lowest price points, from which the price as the ball bounced up sharply. Draw a line on them. This will be a support line. Probability of breakdown support line is much lower probability of a rebound from it. It is important to remember and one more rule - if the price is still penetrates the support line and goes down, it turns into a resistance line - that is, the price will already be in the future be below it, and fight back from that line down.
Line of resistance. Pass on important highs (peaks) of the market. Carried out just as the support line, only the top-most price points, from which the price bounced several times down. Probability of breakdown resistance line is much less likely to rebound from it. If the price breaks through the line and goes up, the line resistance becomes support line, from which the price in the future will have to beat up.
What is the correct way to identify and build support and resistance lines?
• First, to properly identify the trend - downward, upward or sideways.
• Second, because these lines you can make and implement its future trading plan. Calculate the point of entry and exit in the transaction, see what the maximum and minimum stop-loss and take profit, you can set for each individual transaction.
• Third, if the price breaks the support line and resistance line, it clearly indicates a change of trend. Often, the trend changes at once, sharply, but gradually, and therefore the price can later return to the old trend, and in the future to continue to draw a new trend. Always be ready for it, do not risk their own capital once again.
Very often, support and resistance lines depict the channel - when these two lines are parallel to each other clearly. Channel - an ideal situation for any trader, trading with technical analysis. In this case, clearly visible to the point of entry into position and point of exit from it - which means you can get from the deal the maximum profit with minimal risk. When the channel breakout price breaks it immediately to the 60-80% width of the channel, and if you get up in such a transaction, you can get a good profit.
The rules of successful trading with the trend
1. A thorough background check before making a transaction.
Under scrutiny is meant to mandatory testing your trading system. Develop and implement their own rules for your trading. Scroll down the price chart back in history and see how the rules would have worked on your dozens of deals in the past. If you are not confident in your trading system, how can you be sure of the result? Do not allow yourself to trade on the system, which did not pass the test.
2. Concentrate on one thing. No tradeoff.
Think about any specialist professionals. How old is he doing something one is not throwing in many directions. He concentrates on only one area of activity.
If you are going to make money on the forex market is stable and profitable, you must give your full attention of one currency, one trading system, a single date range. Examine carefully selected currency. Test your trading system on dozens of historical transactions. Choose to start a date range. And then you become an expert in your trading system, in a time range for the chosen currency pair. After that, you are 100% confident in your trading system, and will need to trade profitably.
3. At different time frames are different trends.
This rule is a continuation of the previous one. At different time ranges can often be different trends. Globally (on a daily, weekly, monthly chart) EUR / USD pair may go up, while at 5 or 15-minute chart may go down. It is therefore important to begin to choose a time period.
If you combine trading in the Forex market with the main work, then you are more suitable for trading daily and weekly charts. Such trends are usually long, but they bring a lot more profit, often exceeding 1000 points. If you have the ability to trade during the day, feel free to choose short-term schedules.
4. Trade with the trend requires precision and patience.
If you decide to become a trend trader, you must have patience and wait for the only good movement on the trend. If you are at this time will make deals with other trading systems, you can not become a master in the trade with the trend. You'll always miss the input and output trend in the transaction, engaged in other transactions.
Set up a pre-process waiting on the development trend, and then monitor its development. Monitor the situation. Do not miss the transaction and do not forget to minimize risks. Begin to sell a small amount per transaction, so if the price is temporarily going against you, you were able to safely wait it out and not lose too much money.
5. Listen to only yourself.
Many, having read analysts' forecasts of different agencies often miss great deal, fearful that said that "the trend of the dollar rising," and they in their time period defined downtrend. These people do not know your trading system, do not know in what time frame you are trading. They do not operate your trading account, and be liable for your losses in case of an incorrect prediction, too, will not work! So be careful not to get carried away reading the predictions, analyze all incoming information to you and pick and choose how you act.
Abstract:
Analysis shows that trade foreign traders, stable and profitable trading is achieved through technical analysis. In this article I will talk about the safest in terms of money management method of trading - trading with the trend.
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