Great collection of successful charts trades
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Wednesday, October 3, 2012
Friday, July 23, 2010
Trading divergences
There is another great way to use my favorite stochastic oscillator. There are 4 types of divergences to trade using stochastic.
First 2 types are called regular divergences and they assume trend reversal.
In bullish way the chart should make new lower lows and oscillator should make higher lows.
In bearish wat the chart should make new higher highs and oscilllator should make lower highs.
This is an example of bearish regular divergence on Gbp/Usd. Using orange line I'm showing the divergence and with circle I've marked the possible profit.
Second 2 types of divergences are a little different. They are called "hidden divergences" and they confirm the trend continuation.
Hidden bullish divergence assumes that the rate makes higher lows and the oscillator makes lower lows.
Hidden bearish divergence assumes that the rate makes lower highs and the oscillator makes higher highs.
In this hidden bullish divergence I've marked with circles the possible entry and exit to make a profit trade.
First 2 types are called regular divergences and they assume trend reversal.
In bullish way the chart should make new lower lows and oscillator should make higher lows.
In bearish wat the chart should make new higher highs and oscilllator should make lower highs.
This is an example of bearish regular divergence on Gbp/Usd. Using orange line I'm showing the divergence and with circle I've marked the possible profit.
Second 2 types of divergences are a little different. They are called "hidden divergences" and they confirm the trend continuation.
Hidden bullish divergence assumes that the rate makes higher lows and the oscillator makes lower lows.
Hidden bearish divergence assumes that the rate makes lower highs and the oscillator makes higher highs.
In this hidden bullish divergence I've marked with circles the possible entry and exit to make a profit trade.
Thursday, July 22, 2010
Multiple time frames
Most of the indicators on forex can give you a signal to buy or to sell, however if you use only one indicator, probably you'll get a loss. There is a way out of this situation: using two or even three time frames on one chart would give you much less signals but they will be much more precised.
Why is it more profitable? Simply because we have only one rate on any currency chart. Let's take a stochastic indicator for example. It can give you a signal that market is overbought on a day chart and on an hour chart. Better would be to use day chart but what if market would react only on an hour chart? I would wait till market become overbought on both time frames and the rate would definitely bounce back.
We can't be sure what time frame is currently being watched by most of the traders. I like the idea of many time frames because it makes sense. There would work only one indicator at a time or multiple indicators at once.
Recently I've read that you can use multiple time frames for Fibonacci retracement levels. If there are 2 swings on 2 time frames you can draw the Fibonacci levels to find out the rate when the correction would probably stop. It is necessary to have both desirable rates on 2 time frames to be approximately in one place.
Don't forget about other indicators like MAs and Fractals. I would recommend to use 2 time frames: H1 and Daily for this strategy. If there are a low amount of signals then open other currency pairs, that way you can have much more signals.
Why is it more profitable? Simply because we have only one rate on any currency chart. Let's take a stochastic indicator for example. It can give you a signal that market is overbought on a day chart and on an hour chart. Better would be to use day chart but what if market would react only on an hour chart? I would wait till market become overbought on both time frames and the rate would definitely bounce back.
We can't be sure what time frame is currently being watched by most of the traders. I like the idea of many time frames because it makes sense. There would work only one indicator at a time or multiple indicators at once.
Recently I've read that you can use multiple time frames for Fibonacci retracement levels. If there are 2 swings on 2 time frames you can draw the Fibonacci levels to find out the rate when the correction would probably stop. It is necessary to have both desirable rates on 2 time frames to be approximately in one place.
Don't forget about other indicators like MAs and Fractals. I would recommend to use 2 time frames: H1 and Daily for this strategy. If there are a low amount of signals then open other currency pairs, that way you can have much more signals.
Wednesday, July 21, 2010
Investments In Forex
There are a few options for entrusted administration of your funds.
I'm going to tell you about PAMM and ZuluTrade, although there are many more similar systems.
PAMM allows you to entrust administration of your funds to some trader who will take a fixed percent of the profit he can make with your money. This trader also have his own money in the account, so if he lose your money then he lose his money too. The reward percent could be around 20%. You, as an investor, can invest money in different traders to diversify your risks.
ZuluTrade is another system that is a lot easier to use, however this system takes in reward your pips with openning of new orders. This system would take your money even if the system makes losses. That way your broker and the trading expert only cares to open new trades and they aren't concerned that you can lose your money.
If you haven't had success with trading on forex yourself then you should check this kind of systems. Forex is a very interesting market and it can be traded in any market state. On the contrary, stock markets are very profitable on growing market. Currently, in our global economy state, I wouldn't recommend to invest your money in commodities or capital issues.
However, there is an opinion that every forex trader sooner or later lose his deposit. It can be that every equity chart you see on these systems are always in down trend and currently their profit could only be a correction. That's why you have to select only those traders who has good history of trades with at least 3 months of profitable trading.
If you choose to invest in forex, you should always keep an eye on traders who use your money. I would recommend to withdraw your profit frequently to avoid undesirable surprises.
I'm going to tell you about PAMM and ZuluTrade, although there are many more similar systems.
PAMM allows you to entrust administration of your funds to some trader who will take a fixed percent of the profit he can make with your money. This trader also have his own money in the account, so if he lose your money then he lose his money too. The reward percent could be around 20%. You, as an investor, can invest money in different traders to diversify your risks.
ZuluTrade is another system that is a lot easier to use, however this system takes in reward your pips with openning of new orders. This system would take your money even if the system makes losses. That way your broker and the trading expert only cares to open new trades and they aren't concerned that you can lose your money.
If you haven't had success with trading on forex yourself then you should check this kind of systems. Forex is a very interesting market and it can be traded in any market state. On the contrary, stock markets are very profitable on growing market. Currently, in our global economy state, I wouldn't recommend to invest your money in commodities or capital issues.
However, there is an opinion that every forex trader sooner or later lose his deposit. It can be that every equity chart you see on these systems are always in down trend and currently their profit could only be a correction. That's why you have to select only those traders who has good history of trades with at least 3 months of profitable trading.
If you choose to invest in forex, you should always keep an eye on traders who use your money. I would recommend to withdraw your profit frequently to avoid undesirable surprises.
Tuesday, July 20, 2010
How to define market trend?
In this article I'll describe 3 ways of defining the trend.
1. The simplest way to detect the trend is to use Moving Average indicator or 2 MAs with different smoothing property. The trend can be bullish if: MA is growing, current rate is over the MA or fast MA crossed slow MA. The opposite is true for bearish market.
2. The trend can be detected by using the breakout of current strong support/resistance levels. If the rate for a while was in closed corridor of prices then these prices appears to be the support/resistance levels. If the rate broke out the resistance level then we are in bull market and if it broke out support level then we are in bear market.
3. There is one more interesting way to define current trend. Look at your chart and locate impulse wave followed by a correction wave. If you don't know the meaning of these waves please read my post "Elliott Wave Theory". Look at the size of the correction wave. If it's smaller than impulse wave then we are in the impulse wave direction market. If the correction wave seems the same as impulse way then it's possible there is going be flat market or market reverse. Eventually, If you see that correction wave is larger than impulse wave (however, it is impossible in the regular elliott wave theory) then market can develop in this opposite direction.
And remember, the trend should be defined on Day chart.
1. The simplest way to detect the trend is to use Moving Average indicator or 2 MAs with different smoothing property. The trend can be bullish if: MA is growing, current rate is over the MA or fast MA crossed slow MA. The opposite is true for bearish market.
2. The trend can be detected by using the breakout of current strong support/resistance levels. If the rate for a while was in closed corridor of prices then these prices appears to be the support/resistance levels. If the rate broke out the resistance level then we are in bull market and if it broke out support level then we are in bear market.
3. There is one more interesting way to define current trend. Look at your chart and locate impulse wave followed by a correction wave. If you don't know the meaning of these waves please read my post "Elliott Wave Theory". Look at the size of the correction wave. If it's smaller than impulse wave then we are in the impulse wave direction market. If the correction wave seems the same as impulse way then it's possible there is going be flat market or market reverse. Eventually, If you see that correction wave is larger than impulse wave (however, it is impossible in the regular elliott wave theory) then market can develop in this opposite direction.
And remember, the trend should be defined on Day chart.
Monday, July 19, 2010
Scalping strategy
Many traders prefer scalping strategy because of its simplicity. The strategy concept is in taking a small amount of pips (1-10) per trade, whether it's profit or loss. It is necessary to catch a micro wave and trade on it.
This strategy is also based on intuition and needs a lot of practice. When you could feel what will be the next step of the market then you're ready to trade this way.
However, there are a few problems with scalping you can face and they all depend on your broker.
First of all you need a good broker which can open you trades in less than a second. There should be no requotes and spread should be very low. It is better to have fixed spread because if you trade on news spread can be more than 10 pips and this is definitely is not what you need.
In the end, you need to have fast and stable internet connection.
You need to test your skills in scalping on demo account on silent market and during release of major news. If you could make stable profit then open a real account and test your broker once more. There is a possibility that on real account you would face new problems because brokers don't like scalpers. If your trading would go smoothly you can higher your lots. If not, try another broker, there is a plenty of them.
This strategy is also based on intuition and needs a lot of practice. When you could feel what will be the next step of the market then you're ready to trade this way.
However, there are a few problems with scalping you can face and they all depend on your broker.
First of all you need a good broker which can open you trades in less than a second. There should be no requotes and spread should be very low. It is better to have fixed spread because if you trade on news spread can be more than 10 pips and this is definitely is not what you need.
In the end, you need to have fast and stable internet connection.
You need to test your skills in scalping on demo account on silent market and during release of major news. If you could make stable profit then open a real account and test your broker once more. There is a possibility that on real account you would face new problems because brokers don't like scalpers. If your trading would go smoothly you can higher your lots. If not, try another broker, there is a plenty of them.
MetaTrader 5 and MQL5
Yesterday I tried new trading platform that is now in active testing mode. It was completely rewritten but at first sight looked the same. However, it is much more advanced now. I waited for its release because I had very good thoughts for multi-currency expert advisor. MetaTrader 4 do not provide strategy tester for that kind of experts which is essential for developers.
It took me 2 hours to rewrite that simple program, that I told about in my previous post "Your first EA" . The programming language MQL5 is completely different from MQL4. It's like to compare "C" and "C++" languages.
All the indicators and expert advisors have to be completely modified for MetaTrader 5. Moreover, its not like to change the names of the functions or the syntax of the language. MT5 do not support orders in the way almost all trading platforms does! Orders are replaced with positions and there can be only one position on each currency pair. This means all old expert advisors should change their logic and it'll take hours to modify its source code.
In MT4 to reverse your order you had to close Buy order and open Sell order. Now, you would have to open Sell order with doubled lot to do exactly the same thing.
Strategy tester in MT5 still needs some improvements. I haven't found a Results bookmark where I could see all done orders. But wait a minute, there are no orders in MT5. Actually, in the experts' output strategy tester shows some kind of orders, but it's done for testing purposes only. It is really a pain now to debug expert advisors in MT5.
Anyway, I made a simple multi-currency expert advisor and it worked nice. I would suggest to use it, if you have a good idea for that kind of an expert.
MT5 strategy tester worked slower for me, but developers says it should be faster than MT4. Maybe my advisor wasn't optimized but I doubt it.
We have to adapt for new technologies so it's time to learn this new platform. It has a really big potential because of its possibilities to trade on almost any market in the world.
It took me 2 hours to rewrite that simple program, that I told about in my previous post "Your first EA" . The programming language MQL5 is completely different from MQL4. It's like to compare "C" and "C++" languages.
All the indicators and expert advisors have to be completely modified for MetaTrader 5. Moreover, its not like to change the names of the functions or the syntax of the language. MT5 do not support orders in the way almost all trading platforms does! Orders are replaced with positions and there can be only one position on each currency pair. This means all old expert advisors should change their logic and it'll take hours to modify its source code.
In MT4 to reverse your order you had to close Buy order and open Sell order. Now, you would have to open Sell order with doubled lot to do exactly the same thing.
Strategy tester in MT5 still needs some improvements. I haven't found a Results bookmark where I could see all done orders. But wait a minute, there are no orders in MT5. Actually, in the experts' output strategy tester shows some kind of orders, but it's done for testing purposes only. It is really a pain now to debug expert advisors in MT5.
Anyway, I made a simple multi-currency expert advisor and it worked nice. I would suggest to use it, if you have a good idea for that kind of an expert.
MT5 strategy tester worked slower for me, but developers says it should be faster than MT4. Maybe my advisor wasn't optimized but I doubt it.
We have to adapt for new technologies so it's time to learn this new platform. It has a really big potential because of its possibilities to trade on almost any market in the world.
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