Romani de succes in domeniu
Posted 03 June 2006 - 03:01 AM
Din ce am apucat sa citesc pana acum despre forex am dat peste 2 nume care suna mioritic: Cornelius Luca, economist la GFT si Robert Balan, Head of Financial Markets Strategy at Saxo Bank
Ambii au niste studii foarte bine privite pe piata (nu am apucat sa le citesc)
Robert Balan, Head of Financial Markets Strategy at Saxo Bank
"Mr. Balan is Head of Financial Markets Strategy at Saxo Bank A/S. Mr. Balan is viewed as one of the financial sector's most-respected advisors in the area of technical analysis of financial markets. He earned his reputation as head of technical analysis and strategy at Lloyd’s Bank , Swiss Bank Corporation, Union Bank of Switzerland and at Bank of America, and his analyses are regular features of Reuter’s news service, and Market News International. Robert Balan is the author of the best-selling book on analysis, The Elliott Wave Principle Applied to Foreign Exchange Markets. Mr. Balan is a world-leading market strategist and is able to comment on global market trends from a technical-analytic perspective. His areas of expertise include equities, foreign exchange, bonds, precious metals and commodities."
"Robert Balan is a first-class talent, absolutely at the top of the field. We have had clients asking for more access to Robert’s ideas and now we are delivering it", explains Executive Director and Head of Global Trading, Claus Nielsen. "TradeMaker is an efficient approach for the professional trader. It defines a very clear set of specifications for the strategy. The trader can choose to follow that strategy or go in a direction of his or her own. These are real trading ideas", says Claus Nielsen. Click aici pentru mai multe detalii
Cornelius Luca, economist la GFT
"Mr. Luca is an internationally renowned foreign exchange and technical analysis expert. He has more than 20 years of experience in the currency markets; he had traded spot, forwards, futures and currency options at Creditanstalt Bankverein (now Bank Austria), Prudential Securities and Sanwa Bank (now UFJ).
He is the author of 'Trading in the Global Currency Markets' (Second edition 2000, First edition 1995), 'Technical Analysis Applications in the Global Currency Markets' (Second edition 2000, First edition 1997), both published by Prentice Hall, 'Technical Analysis Applications', 2004, published by McGraw-Hill and 'Practical Introduction to Technical Analysis', 1997, published by Euromoney.
He has conducted training programs in FX and Technical Analysis around the world since 1989.
Mr. Luca holds and MBA from the New York University Stern School of Business with a double major in International Business and Finance"
Click aici pentru detalii
Postati daca ati citit aceste carti parerea voastra, oricum par foarte tehnice si sunt destul de apreciate pe afara.
Mai cunoasteti astfel de romani?
Daca subiectul e fumat scuze
Am gasit urmatorul articol:
"The American analysis guru Robert Balan has joined Saxo Bank A/S as head of financial markets research. Balan is viewed as one of the financial sector's most-respected advisors in the area of technical analysis of financial markets. He earned his reputation in positions at Lloyd’s Bank and Bank of America, and his analyses were regular features of Reuter’s news service. Robert Balan is the author of the fundamental book on analysis, The Elliott Wave Principle. NewsStory =
With the hiring of Robert Balan, Saxo Bank further strengthens its analysis capacity at a time when the chaotic conditions in the international financial markets make it more difficult than ever to predict developments in foreign currency exchange and stocks. His employment also comes as part of a general bolstering of human resources as a direct result of Saxo Bank’s success.
"I wanted a position where I could use my abilities and experiences as a market analyst in a more direct relationship with investors. It is precisely SaxoTrader that gives Saxo Bank a trading platform for drawing investors very close to the market," says Robert Balan.
"Saxo Bank is deeply engaged in developing new, exciting net solutions and top-rate analysis. Combined with the bank's service and product mix, Saxo Bank has designed the optimal framework for the active international investor - a framework I intend to take an active role in building."
Saxo Bank is Denmark's most dynamic international investment bank, with customers in more than 80 countries around the globe. The larges part of investment activity at Saxo Bank is handled through the advanced Internet-based trading system, SaxoTrader, which is one of the financial world's most effective tools for trading in foreign exchange, FX options, and stock CFDs. The system will be enhanced in the near future to include trading in physical stocks and futures.
"Saxo Bank is incredibly happy to be able to offer Balan's valuable recommendations to our clients around the world. Hiring him is an important step forward for Saxo Bank and a natural advance in the rapid development of Saxo Bank, despite the international financial crisis, "says Kim Fournais, CEO of Saxo Bank.
Robert Balan is also well known to analysts around the world for his book, The Elliott Wave Principle Applied to Foreign Exchange Markets, which The Society of Technical Analysts in London called the best book ever on The Elliott Wave Principal. In recent months, Robert Balan has worked with his own analysis firm, Finance Technology Solutions. He continues to work from New Jersey, but will be moving to Denmark as soon as possible."
Nu prea pare roman in poza
Posted 14 June 2006 - 01:20 AM
Daca o aveti va rog sa o uplodati undeva sa o pot lua si eu, mi-as dori foarte mult sa o citesc.
Daca sunt doritori pentru cartea lui Robert Balan, "The Elliott Wave Principle Applied to Foreign Exchange Markets" va rog sa spuneti
Posted 23 June 2006 - 11:32 AM
Confessions of A Forex Trader - Part 1: Looking At The Risk
Expert: Mihai Nichisoiu, private speculator in the currency markets
Cate ceva despre Mihai Nichisoiu:
Mihai Nichisoiu is a private speculator in the major currency markets. Actively involved in managing speculative funds, Mr. Nichisoiu also emails a letter to a small number of long-term clients every day in the US afternoon time, having done so un-interruptedly eversince mid 2002.
Mihai Nichisoiu's performance record involves a model account started in early January 2004 with one of the oldest, most respectable US-based spot forex brokers. Running in the same broker's monthly 'Demo Trading Contest' - October 2004 through August 2005 - Mr. Nichisoiu finished twice as runner-up, ending up with a positive return in 8 months out of the 11-month participation ; Mr. Nichisoiu won the trading contest in August 2005 with one of the best 1-month returns recorded so far in the competition.
FXstreet.com has been hosting a daily market update signed by Mihai Nichisoiu since early 2004. Mr. Nichisoiu can be currently contacted via ForexGrandCapitals.com, although the appearance of a new, more personal website is being underway.
Topics that will be covered for above session are:
Standing aside: the state of being normal instead of being the exception
Cutting losses early: a tight and rigid policy of risk
Betting when higher leverage does not automatically equate higher risk
I could assume that, for many traders, the risk is just an im-material parameter ; the stop-loss order exists merely on the basis that, traditionally, past generations of traders have used stop-loss orders as well.
For me, though, the risk is the single most important issue, upon which my estimations never cease to end.
While many others 'see' the profits again in an im-material framework - that is, often as wasted opportunities -, I instead look at the risks. At all times I assume I cannot and will not be right in my own market predictions, and that there is always something which can and will go wrong.
Often the way I speculate in the markets is read as being one of extremely tight and rigid stop-loss orders ; although the charts I monitor on an ongoing basis are daily, even weekly ones, most of my trading positions are started off with protective orders many times tighter than one could observe at the way an intraday trader is seen dealing.
But I think the premise is confused with the effect. Very tight and rigid stop-loss orders are not the premise, but the effect. The real premise is the attempt to keeping the drawdowns extremely low.
My long-run observations have also shown me that, for most traders, the natural status is being in the market, dealing.
For me, it is exactly the opposite - my natural status is being out of the market, not dealing, but performing the simple act of observation ; only at a handful of moments I allow myself actively participating in the markets.
Over the years I have come to view the market rather as a matrix of risk defined opportunities, than in terms of traditional technical / fundamental analysis. A matrix when and where tight windows of trading opportunity open up and close out themselves, in-frequently, on rather a rare basis, within which the markets violently continue a previous trend or just as violently reverse it at the expense of low-volatility time and price intervals ; the use of the word expense is not a coincidence, as more often than not my stop-loss orders (the initial ones, at least) have a key 'technical' connection with those above mentioned low-volatility time and price intervals.
I too view the market as a chess table, one at which there is usually an agglomeration of opinions and (chart) movements, however also a table at which I am not bound to make a move unless precisely when and how I want. Along my trading years I have also built the capacity to view that 'agglomeration of opinions and (chart) movements' in rather abstract terms ; for example, I very rarely think of a sudden, exquisite increase in market volatility which I have not speculated as a default in forecasting or a frustrating waste of trading opportunity, but sheerly as a change in the (chart) picture which might offer me 'technical' and risk-related terms for a personal reaction.
That is not to say that I do not have an innate passion for action, because at times the way I let myself dealing means I must be more active (and also more contrarian) then most everybody else. Nevertheless, at most times I am also more passive then most everybody else - and that is too an integral part of my strategy, and perhaps the foremost part of it.
One other premise which I have found very popular is that, in trading, an increase in the leverage utilized must automatically equate an increase in the risk assumed. An online dictionary very popular on the web explains the word 'aggressive' - in one of its many forms - as 'of or relating to an investment or approach to investing that seeks above-average returns by taking above-average risks'.
Nonetheless, I believe one can be 'aggressive' in his or her speculations not necessarily by increasing the amount of risk assumed ; it is the core essence of my trading style which should put me in the position when and where that popular 'matching equation' would not take place.
I think the popular conception is higher leverage automatically drives to higher risk, and that the stop-loss orders must necessarily be larger as the timeframe of market observation gets larger itself.
That does not necessarily apply to the way of my dealing. Indeed I do follow up with larger (chart) moves as they would occur in the daily, sometimes weekly chart timeframes ; however, I only choose to speculate upon rare, in-frequent spots on the charts when and where I perceive there might occur an increase in market momentum at the expense of low-volatility time and price intervals.
Such a selective choice would allow me having an extremely tight (initial) stop-loss order as with most of my market entries ; that means, although the (initial) risk could stay at a very low level, the leverage utilized may not be low.
This way I am approaching an (almost) ideal situation where capital gains could be notable, while potential as well as effective drawdowns could stay at quite a low level. That is a very selective way, a very selective strategy - I well know - but in the end I am prominently interested in the risk adjusted ability to making money, rather than validating any personal connection with popular and traditional conceptions about trading.
My blog: Need 4 Pips
Posted 29 June 2006 - 12:48 AM
Date: November 26, 2004 15:00 GMT-10 AM EST
Expert: Mihai Nichisoiu, Chief Trader of Forex Grand Capitals
- Simple candlesticks and bars price patterns: outperforming trading setups
- Specific trading setups during the current year: short-term vs swing trading
- Risk management: still the biggest part of the trading equation
- What would you consider differently if you were to start over
Who is Mihai Nichisoiu?
Mihai Nichisoiu started his trading career as an independent player in futures currencies, and turned to spot forex in early 2002 when in the same time became one of the most popular contributors on various forex forums across the board. In December 2003 he founded Forex Grand Capitals, home for old fashioned trading where he currently features his own market positions in due real-time mirroring personal managed accounts activities. Mihai also holds special cooperation and writes on daily technical picks on several elite forex portals worldwide, including FxStreet. Great supporter of presenting his trading performance in the most fair play way, Mihai's technical picks and trading signals enclose Account Statements measuring the overall performance of his model portfolios in real-time.
FXstreet Moderator (Nov 26, 2004 10:01:29 AM)
Good morning, good afternoon, and good evening to all of you joining us today from different parts of the world. Welcome to today's Live Forex Expert Question and Answers session.
FXstreet Moderator (Nov 26, 2004 10:01:46 AM)
For those who are unfamiliar with chat sessions like this, please feel free to ask questions at anytime, though the questions will be answered at the end of the session. When you place any questions of any sort they will be posted directly to me, the moderator, before I pass them on to our guest expert. If there are questions directed to me I can reply privately to the person asking the question if that is needed.
FXstreet Moderator (Nov 26, 2004 10:02:20 AM)
A Special Note: An abbreviated summary of today's chat will be made available online some time after the conclusion of the session. For those of you that would like to receive the transcript in full please feel free to let me know at the conclusion of today's discussion by sending me your email address.
FXstreet Moderator (Nov 26, 2004 10:03:01 AM)
With all that said, it gives me a great deal of pleasure to introduce Mihai Nichisoiu, Chief Trader at Forex Grand Capitals. Mihai holds special co-operations within Forex and writes extensively on the markets. In December 2003 he founded Forex Grand Capitals, home for old fashioned trading where he currently features his own market positions in due real-time mirroring personal managed accounts activities.
Mihai (Nov 26, 2004 10:03:58 AM)
Firstly I kindly salute and thank all the participants, Henty and FxStreet for scheduling the chat. We have around one hour running so let's get to work.
Mihai (Nov 26, 2004 10:04:24 AM)
Henty is too generous in calling me an 'expert'. Take me only as a regular Joe, one main reason for which I'm staying here talking is that I've made so many loads of mistakes in the past that you won't probably have time to do in a whole life-time. There might be lessons to learn from victories too, but we people have a hidden talent to always delay or not hearing at all of subtle messages behind victories - and I don't mean about the markets work alone.
Mihai (Nov 26, 2004 10:05:10 AM)
While talking up with Henty these days I said I wouldn't want to make a whole lotta deal of my - you know - methodology of personal trading. Perhaps ironically, perhaps not - I've been making a long time journey from very basic stuff like bars and candlesticks, to trading sophisticate indicators and even into shades of mechanical trading, just to eventually getting back to the same old plain business of working with primal bars, candlesticks, and patterns.
Mihai (Nov 26, 2004 10:06:00 AM)
After few years spent in the markets I've completely given up chasing market puzzles and black suit kind opinions. This is like Hollywood a mechanism I cannot control except in a very small number of situations when it's me who chooses when, where, and with what kind of ammunition I'd be trading.
Mihai (Nov 26, 2004 10:06:42 AM)
This is also like saying my first rule for money management is just staying selective and accomodative. I always ask myself will I be the predator or will I be the hunted creature. I would never go fighting a war driving a Mini instead of a Hummer. And if the heat comes around the corner I must be ready to hit the road in a matter of seconds.
Mihai (Nov 26, 2004 10:07:44 AM)
I also certainly don't want to enter too much details about my own modus operandi since this way I have absolute freedom on re-inventing the whole deal tomorrow if I want - even if 're-inventing' nowadays means mostly just fine-tuning. Always - and I mean always, no matter the hundreds of pips you gained or lost one day, week, or year - allow yourself the possibility of re-inventing what you do the very next morning, if needed.
Mihai (Nov 26, 2004 10:08:27 AM)
Not in the last row I wanted this chat be as interactive as possible. I'm not really a fan of putting up text for ebooks or fancy presentations, I know my work extremely well and that is always brief and straight to the point.
Mihai (Nov 26, 2004 10:09:34 AM)
That's why I'll farther attempt responding to as many questions as possible. I'll anyway start telling you most of the questions I received beforehand focused on indicators and non-discretionary trading - which actually isn't really a wonder for me. They also focused way too much on technical analysis aspects - which is no wonder either. Let's start up:
Please note the full transcript of this session was made available to those that attended only.
Mihai (Nov 26, 2004 11:14:15 AM)
Well, time now to conclude the chat session, and enter the weekend. I once again thank you kindly for having been with me for this hour, with the help of Henty's maybe we will see each others again in the future. Also an occasion for me to wish you excellent winter holidays from now on.
FXstreet Moderator (Nov 26, 2004 11:15:53 AM)
We at FXstreet.com would like to thank Mihai Nichisoiu for being our guest expert, and also thank you all for participating in today's Q&A session. I hope that you found the session both interesting and educational.
FXstreet Moderator (Nov 26, 2004 11:16:07 AM)
Please feel free to post any feedback about today's session. Say what you thought was good and bad and what you think could be improved. We would very much appreciate this. I will be logged on for a while longer. The feedback will go to me only.
FXstreet Moderator (Nov 26, 2004 11:16:28 AM)
As well, if you would like to receive a transcript of today's session please feel free to send me your email address at this point.
Date: March 17, 2005 15:00 GMT
Expert: Mihai Nichisoiu, Chief Trader of Forex Grand Capitals
- Strategic vs. predatory trading: technical tools to consider
- Trading visions vs. trading reality: which, when and how to apply
- Price pattern recognition: trading language spelled in all financial markets
Who is Mihai Nichisoiu?
Mihai Nichisoiu has started to trade in futures currencies in the late '90s, then turned to spot forex in early 2002 when he also became one of the most popular contributors on several specialized forums across the board. Currently, Mihai trades his own account as well as private and institutional money being hosted by Forex Grand Capitals - website which he founded in late 2003. Within the same professional hosting, Mihai offers a daily emailed service in which he features key market comments and real-time market standings on a timely, selective basis. Mihai is a strong advocate of old fashioned, plain business of trading - as well as one of presenting overall trading performance with a detailed track record.
This may be seen as a continuation of the open talks I had here in late November last year - and just like then I now have to stress out again I'm no educator, analyst, adviser, medium or whatever else which would assume like wearing a black fancy suit and having the latest eBook written by myself here with me to feature.
I'm only a trader and I'm just as good as my trading performance shows, nothing more, nothing less. I do not count my 'pips', I do not backtest nor simulate trading action - as I only speak in terms of genuine returns, drawdowns, account statements - and what I do in trading straight to the point.
My professional interest in this business grows progressively toward managing accounts for high-net-worth investors and hedge funds across the board looking for performance over the long-run - but I'm also gladly involved in periodic trading contests and circuits when they present themselves since I always appreciate the challenges of being assessed in real market conditions and with a real track record put on the table.
Even though I'm still up to making fine-tuning adjustements if they're needed - my trading approach hasn't changed much since November.
Versus the mundane style in trading forex nowadays which assumes acting on intraday timeframes and doing that rather around the clock (not meaning it'd be anything wrong about it, though) - I still follow a more passive decisional circuit mainly based on 'reading' the 1-day charts across the board. I do that since my mind and body don't seem to respond too well to the quick and repeated intraday - or even intrasession - market developments. Secondly - there's always the problem of having to deal with administrative costs like broker's spreads and rollover interests. You should make some simple maths, computing for instance how much you'd pay on an yearly basis for cumulative spreads assuming you'd trade 5 positions on even a major pair every day. You'd be amazed by the number of times your account should be larger at the end of the year only for covering those cumulative spreads. I made such model calculation some time ago - ironically based on a hint idea caught from...a broker advertisment.
Moreover - while acting on the 1-day charts I always have the privilege of managing risk into two separate positioning stances: the predatory one (i.e. aggressive market standings lasting for only 1-3 days, and usually based on a single-candlestick price pattern), and the strategic one (i.e. market positions initiated with very small funds at the start-up, further funds adding assumed once expected direction and momentum are confirmed, and usually based on a multi-bar price pattern).
Well - toward the strategic positions the risk profile virtually assumes way larger reward than risk - and since such positions are initially entered on an underleveraged basis and adding further funds is assumed once expected market conditions do confirm outright, realized losses once a failed start-up happens are extremely modest.
On the other hand though, - the predatory positions are usually entered with larger funds and they also usually feature a poor risk profile i.e. larger risk than reward. Predatory positions in my opinion are similar to discovering very tight trading window opportunities deriving from excellent technical setups, and exploiting them very aggressively with a 'hit & run' approach.
Problem is - always - that without discovering and effectively trading strategic positions and hence build a chance to shoot for those large rewards, I will have a growing vulnerability in taking the other sort of positions i.e. the predatory ones. For instance if I register 4-5 consecutive losses from taking predatory positions - for that's not an impossible nor rare situation - and there's no strategic trading opportunity around the corner to take benefit of, then I really do have a problem.
Zooming to the technicals, - I always search out for basic things like classic candlesticks pointing out to trend reversal or continuation, and classic multi-bar patterns. I trust my instincts a lot, and I already have a pretty reasonable visual experience to rely on at most times.
The 'bear/bull traps' remain my most favorite technical setups - for instance a textbook 'bear trap' recently occured on the USD Index (February 28th), and EUR/CHF (March 1st) on their corresponding 1-day charts which pushed for powerful bullish follow-thru in the wake of the 'spike-low' part of the pattern.
These technicals make out for very selective material - therefore I don't trade nearly as often as most traders, I guess. I don't rush out because there's no hurry to reach anywhere. Plus as everything stays with me on a full discretionary basis at times I also feel the need of cooling trading down - even though I tend to work way better under pressure rather than in relaxed conditions.
Moving to another topic, - I believe a lot of people are interested in whether to trade the reality of the charts (i.e. what's going on with the price right now) or doing it based on forecasts and various predictions. Somehow I believe this is sort of a fake dilemma.
Well - I think even those ones pretending they always trade the present are themselves in the 'forecasting' business even if they don't really feel that way - because market moves anyway, and it should do it the way you expect for earning some money out of it.
On the other hand - I personally think those ones trading based on 'forecasting' models should too have a powerful sense of what's happening right here, right now with the price. Easy say I know - because anyone of us can at times easily be trapped into choosing to act like on a couple of minor reversals on a 1-week chart, while at the same time a big 3,000-pip trend is quietly walking alongside. But, a good exercise always remain stepping off from the monitor for a couple of inches, and asking yourself about what is going there (i.e. on the longer-term chart). A few times perhaps something really big is moving just alongside - and those few times actually can make the whole big time difference between ending up an year at breakeven (or worse), and ending it up a few times better than the average industry performance benchmark. Like in any business, the best performers are those who have a very good sense of reality as well as a grand vision of the future.
Posted 02 July 2006 - 03:15 PM
- Using the mid-term analysis for intraday trading
- Filtering the false signals and identifying the good entry levels
- Identifying the exit opportunities
- Playing the breakouts
Who is Liviu Flesar?
Liviu is known by many active and novice traders worldwide since he started offering the trading advisory services like the daily trading recommendations and the weekly outlook. He started the website E-Forex.ro in 2004, he is specialized in trading currencies, technical anlysis, trading systems development but is also a daily contributor of fxstreet.com.
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Efficient techniques for the intraday trading
My name is Liviu Flesar, I started trading currencies for fun a few years ago and someday I realized that this is a little more than gambling, so I've made the first important step toward the serious trading, starting studying and applying the Technical Analysis in order to get some clues about the high probability entry and exit levels which will bring better trades, therefore, larger profits.
The funniest thing when using many technical analysis tools and complex strategies was that I found out the “ironical element” telling me something like "Man! This mess on the charts made of 5 indicators and 4 oscillators gives me much more losses than the coin toss strategy I was using in my first week of trading!" . In fact, the coin flipping strategy was more profitable than a basic MA Crossover system.
The essential thing is that a trading system has to be as simple as possible. I guess that every complicated problem has a very simple solution, so, why using complicated formulas in the circumstances where a simple trend line is efficient ?
Using the medium term analysis for day trading
Depending on people beliefs, the reasons for losing money in trading are structured on two elements: a) several reasons, probably 1 million reasons why traders fail and B) a single reason: the market's fault.
Personally, I think that only the first element is true and we have to accept that we are the only ones to blame when taking the trades in the wrong direction. Someone said that „In trading, you have only one enemy: yourself „ . Makes sense ?
So, one of that 1 million mistakes day traders do is the ignorance of the larger time frames.
Like for example, a day trader uses only the 15 min charts ignoring the larger time frame charts like 4 hours, 8 hours daily and so on. This is definitely wrong unless that trader is a convinced scalper who gets out from any trade at 3 or 5 pips profit. We want more than 3 pips, isn't it ? Or we want that ridiculous 3 pips gains but trading 100 standard lots ?
I like using the 4H hrs. charts in order to have a better view of the previous few days. The first step is identifying the support and resistance levels on that time frame of about 5 days and drawing the fibonacci retracement levels.
If possible, I also add one or few trend lines which will serve along with the support and resistance levels. After these steps are made, I can easily change the chart time frame because the lines will be there on the new intraday chart too.
Why doing all this ? Because it is good to know what is the importance of some chart area in the next few hours. For example, I chose most of my entry levels at the 50 and 38.2 Fibonacci retracement levels. Depending on my position type, these two levels may also serve as exit levels. The weekly support and resistance levels are also very important. I am sure that most of you noticed how market reverses right after entering a trade but looking at the 4H charts a bit later, that reverse looks normal. This happens all the time and the mistake is caused by the hurry, which is an opposite of discipline in trading.
It is better to think twice before entering a trade when the price is near the weekly resistance and support levels.
Other important facts when trading using small time frames charts, are the indicators and oscillators like moving averages, Stochastics, MACD and so on. I recommend taking a look at a larger time frame chart indicators and oscillators before taking a decision using the smaller time frame charts.
The larger time frame charts are very useful when used for confirmations. When looking at larger time frame charts, you can easily notice what's the current market trend and avoid entering a trade in the opposite direction, even if the small time frame technical studies point to a potential minor trend.
Filtering the false signals and identifying the good entry levels
This topic is related to the trading systems based on technical indicators. I am sure everyone used or heard about MA crossover, MACD or Stochastic systems.
All these three systems are fine and they are working great but only when the market moves on a trend. Unfortunately, 70-80% of the time, the markets are consolidating and retracing and because of the specific lag of these tools, we will get into a trade too late, when the market will be exhausted and preparing to turn around against us.
I remember how happy I was when I applied for the first time two Exponential Moving Averages, one period 5 and second period 20 on the USD/JPY 1H chart. I thought I discovered the holy grail. The crossing signals were so accurate at the first sight on the historical chart that I told myself "you're gonna become a millionaire soon!" . That happened on a Saturday afternoon, so I wasn't able to forward test that strategy until the market open, next day. I was almost unable to sleep because I was thinking about the 2000 pips profit I'll get during the next week.
Instead of 2000 pips profit I got only my Stop Loss hit for 12 times and 2 winning trades. I was so disapointed but I continued in the next two weeks with different periods for the MA, different chart time frames and the results were almost the same. The 300 pips profit I've got trading an EMA crossover signal on the 4H charts was nothing more but that thing telling me: "this strategy works only on trending markets and if I really want to continue using it, I have to find some tools to filter out the false signals".
So, when being a day trader, you will probably need something better than MA crosses, something that will be less lagging.
I use the Moving Averages only for trend confirmations now and sometimes I forget to add them on the charts and I don't even notice that. Moving Averages also work pretty fine as support/resistance levels, when price gets above or below them.
Most of the times, I use a setup of 3 elements for the entry confirmations:
1. Williams %R oscillator gives me confirmations for long positions when it closes above -35 and for the short positions when it closes below -65.
2. Moving Averages, especially T3 or T6 MA. Long positions are confirmed when price closes above MA and short positions are confirmed when price closes below MA.
I also like to use the MA levels as entries like for example: EUR/USD 1H bar closes 30 pips above 12 period MA, I look for a long position at the 12 period MA value, which will be about 30 pips below the current price.
3. Daily support and resistance levels along with the Fibonacci Studies and momentum based indicators. The Fibonacci studies are what I use for, let's say, 90% of my trades.
Along with the technical analysis tools, there are several other factors that will help us decide when to trade and when to ignore the signals of our mechanical trading systems.
The time of day is very important because every trading session has its own characteristics. There is also a frame of a few hours when the market takes its daily breath. Because of these quiet hours, most systems will give false signals during the non-volatile hours (e.g.: before the Asian session open). Therefore, it is better to ignore the mechanical signals during the quiet hours.
Another important thing is the discretion.
Most of the times, a trading system works fine only for the one who designed it. That's why the "one million traders, one million systems" sentence exists. I've met some traders that were successful without using technical or fundamental analysis. They were trusting only their opinions when looking at the charts, like the charts were saying "hey! I sit on a high area, I will consolidate during the Asian session and drop below yesterday low during the European session". I believed their success is nothing more than luck but I was wrong, because luck doesn't come back every day, for three consecutive weeks, isn't it ?
Without discretion, we won't be able to be successful.
Even the best mechanical trading system have the chances to fail on the long run, not being so profitable in the future.
I know that some people use automated trading systems with success. Personally, I wasn't able to follow a mechanical system without emotions and own opinions. Trading is a psychological game and we all know that. Where will be the fun, the happiness and even the worst feelings like frustration and greed if we will let a machine trade for us? That's not trading. It is the same like having your own teleporting device, it will be very useful when you will be in a hurry to get at the workplace but if you like driving, and you love your sport car, you will definitely prefer to use your car not the teleporting device because the simple action of pushing a button doesn't compare to your own pleasure which is driving.
We have to learn the fact that understanding ourselves is the only potential key to profitable strategies. A total approach for understanding the market requires both strategies and tactics that will help us understand ourselves and of course, understand the markets as well.
Identifying the exit opportunities
When to exit a trade? - that's a question we all ask ourselves. In fact, the exit level is more important than the entry level. We can enter a trade whenever we want, the entry it's one mouse click away from us. We don't even have to take a look at the charts or at any economic calendar before entering a trade. We can even flip a coin and decide if we will go long or short. Isn't that easy ? We have 50%-50% chances of having a winning trade. So, if the chances are 50-50, why 95% of the traders out there are losing money ? Happens to anyone to have 50 pips profit on a running position, waiting for more because all the indicators are confirming that position but the market reverses suddenly and the 50 pips are gone exiting at breakeven or even less, how about 100 pips less because there was a Non Farm Payrolls report ? That's really frustrating. Why not exiting that position at 50 pips profit ?
Well, the exit level is the hardest thing to chose. Every entry level has to be decided along with both target and stop loss levels. Without this “set of 3”, we will probably fail. Let's apply the "no target" mistake to real life. I take my clothes, my shoes and my wallet, I close the door and I get out from home, downstairs in the street. I know that I wanted to get out from home, but going where? Without a predefined localtion I'll stay there looking at the people rambling on the streets telling myself "Now what?!" and probably getting back home asking myself "where I wanted to go ?!" for several times all the way upstairs.
All I needed was a plan. Like, getting out to buy myself a beer from the corner shop. So, I get out from home, get to that shop and get back with the beer. This is discipline.
And of course beer is part of discipline because it helps making rational decisions until there's not too much of it.
We need a trading plan. We have to ask ourselves "what's the target of this trade?" and "Where do I stop if I am wrong?" before entering any trade. So we set up the limit and S/L orders. But where ?
This depends on so many things. Some traders are looking for a strict predefined target on every trade they take. Doing so, it is easier. Like for example, being satisfied with 30 pips per trade which is a great target on the long run if we are able to achieve it constantly. But what about the stops ? Well, using a fixed 30 pips target with a 90 pips stop loss won't be a good idea. The stop loss level has to be at least equal to the target level. Equal target and stop loss are ok as long as the system we use is profitable enough to have more than a 1:1 ratio of winning/losing trades.
A good strategy is using a trailing stop, even automatic or manually triggered. Locking profits and liquidating portions of our positions is a recommended thing to do.
But what about the first target level we have to set when entering a trade ? Personally, when day trading, I set an initial 70 pips target or I set an initial target based on the important zones of the chart like support/resistance, retracements. I lock profits or add more to the position until I decide to exit the trade.
For example: I move the stop at breakeven when I have 30 pips on my side, adjust that at 20 pips when there are 50 pips profit and so on. But I exit the trade when I think there will be a retracement, reversal or some major event. For confirmations of my position I analyse the larger time frame charts because they are essential, as noticed on our first topic. It is very important to adjust the stop loss order when the market is about to test some support/resistance level. Most of the times, the market is reversing after 2 or 3 failed tests of the support and resistance levels. Therefore, I use a tight stop when the market is testing the sup/res levels. Usually, the markets are testing both daily support and resistance levels during the day. It is also a good idea to draw the support and resistance levels on the charts, and when you decide to enter a trade, put the initial stop a few pips below or above the support/resistance levels. It is safer.
Playing the breakouts
I will start this topic with a continuation of the previous topic. Support and resistance levels are very useful as entry levels. Sometimes the market is reversing when testing a support/resistance level and sometimes it steps forward breaking these levels.
But when is a resistance/support level breached ? Here is where some people got it wrong. A support/resistance level is breached only when price closes above/below it. Almost every day we see sup/res tests when the market spikes through that levels and unfortunately some traders enter trades in the direction of the spikes because they think the sup/res levels were not strong enough to hold the tests and got breached. That's wrong.
Double/triple bottoms and tops are also very useful when deciding to enter a position after the support/resistance tests.
The double/triple bottom is a reversal pattern made up of two/three equal lows followed by a breakout above the resistance level. The double/triple bottom is not complete until a resistance breakout. The highest point of the formation, which would be the highest of the intermittent highs, marks resistance the major resistance.
The same applies on double/triple tops but in this case we will look for a support breakout instead resistance.
The support and resistance breakouts are good entry levels for reversal trades.
Let's take the first picture as an example. We have a support level at 1.3587 and a resistance at 1.3655. A doubled top was formed after two resistance tests. Notice that the market got above the resistance by a few points. Even so, it was not a complete breakout because the bar didn't close above. A bit later, it is time for the support level to be tested. It also got breached, therefore a good short entry level will be around the bar close, in the 1.355 area or even higher, near the 1.3487 level which is now a resistance. In both entry cases, it is a good trade for an objective of 100 points or more. But how about taking another trade, entering short in the 1.353 area where we see the 50% retracement of the previous large fall ? That's another good trade. You should all know that the market is retracing a lot during it's long-term moves and that's why fibs are working fine as entry/target levels.
If you didn't used the Fibonacci levels too much in the past, please try looking in the past on the hourly charts how great the 50% fibonacci retracement works as an entry. Apply the fibonacci studies from some daily lows to daily highs (or opposite) and you will notice that for many times, the market will reach the 50% retracement during the next day and reverse there, becoming a potential good trade.
This is only one of 1 million ways that demonstrates the efficiency of the most simple things we can use in our favour.
I've prefered to take a “fresh” day for the second picture example. This happened on Tuesday 26 of April, two days ago.
We apply the retracement study on the previous large move, more or less, being the Monday's high to low (A to B). The entry level will be the X area, 50% retracement of the AB move. But what about the target ? Well, when using this strategy I prefer to target the A or B level, depending on my position. In this case, we talk about a short position, so the objective will be the B' level, seen at 1.2955. That's what I call an accurate trade, entering short at the daily high level and exiting at the daily low. Couldn't be better than that in a single day, isn't it ? I'll be glad if you will try to find the same patterns on the charts. Works best on Eur/Usd but on other pairs as well. The last two pictures are other examples of how great Fibonacci Studies work.
Pentru a vedea pozele click aici
Posted 26 April 2007 - 12:05 AM
Raspuns. Nu va fi nimeni. Nici chiar de alta natie!
Chiar daca unii pretind ca asa ceva.
E parerea mea. Unii sunt de acord cu ea, altii nu. Nu doresc sa aduc atingere nimanui!
Trading is hard and will only work after years and years of blood, sweat and tears!
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