Something Interesting in Financial Video December 2013 - page 5
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The next lesson in online video futures trading course which covers futures trading price limits.
In this video presentation I am discussing a Non Traditional method of trading the Ichimoku system and also looking at a few trading opportunities on the horizon.
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Press review
newdigital, 2013.11.22 19:06
Breakout with Ichimoku (based on Take Advantage of False Breakouts at Great Prices with Ichimoku article)
Talking Points:
- What is a False Breakout?
- How Ichimoku Can Help You Recognize a False Breakout
- Trading Opportunity in EURUSD with Ichimoku on Recent Move
There are few things more frustrating to traders than false breakouts. Especially if your bread and butter as a trader is catching trends at the earliest stage possible. However, much like whipsaws on protective stops, false breakouts are often seen as a necessary evil.What is a False Breakout?
A false breakout takes place when price appears to be making a renewed move in the direction of the trend only to be retraced. A trend trader who is looking for prices to eventually move higher but wants confirmation of a price thrust in the direction of the trend is especially prey to false breakouts. This is because a break of resistance like a trendline that is pierced by price without follow through is ground zero to a false breakout.
How Ichimoku Helps You Recognize a False Breakout
Like many pains of trading such as stops getting hit at an unfortunate price, false breakouts cannot be avoided. However, they can be minimized as well as become a nice trading signal upon their failure. The reason I like looking to false breakouts as a trading opportunities is that they can often have a sharp reversal in the direction of the prior move with a good risk to reward ratio.
Ichimoku is a technical trading system that helps you catch moves in the direction of the trend on the time frame that you’re trading. Ichimoku is often seen as a difficult system to learn due to the 5 components that are displayed on the chart to explain a trading opportunity but each line serves a purpose and when you understand each purpose, you begin to get a feel for the value that Ichimoku can bring to your technical trading strategy.
If this is your first reading of the Ichimoku report, here is a recap of the traditional rules for a sell trade:
If the breakout turns out to be legitimate and 1.3550 is taken out, then the next target would be in the neighborhood of 1.3630 /3650 range.
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Indicators: Ichimoku Cloud
newdigital, 2013.11.25 12:23
Ichimoku Cloud (based on The Definitive Guide to Trading Trends with Ichimoku Cloud article)
Many traders are asked what indicator they would wish to never do without. The answer has never wavered as there is one indicator that clearly illustrates the current trend, helps you time entries, displays support and resistance, clarifies momentum, and shows you when a trend has likely reversed. That indicator is Ichimoku Kinko Hyo or more casually known as Ichimoku.
Ichimoku is a technical or chart indicator that is also a trend trading system in and of itself. The creator of the indicator, Goichi Hosada, introduced Ichimoku as a “one glance” indicator so that in a few seconds you are able to determine whether a tradable trend is present or if you should wait for a better set-up on a specific pair.
Before we break down the components of the indicator in a clear and relatable manner, there are a few helpful things to understand. Ichimoku can be used in both rising and falling markets and can be used in all time frames for any liquid trading instrument. The only time to not use Ichimoku is when no clear trend is present.
Always Start With the Cloud
The cloud is composed of two dynamic lines that are meant to serve multiple functions. However, the primary purpose of the cloud is to help you identify the trend of current price in relation to past price action. Given that protecting your capital is the main battle every trader must face, the cloud helps you to place stops and recognize when you should be bullish or bearish. Many traders will focus on candlesticks or price action analysis around the cloud to see if a decisive reversal or continuation pattern is taking shape.
In the simplest terms, traders who utilize Ichimoku should look for buying entries when price is above the cloud. When price is below the cloud, traders should be looking for temporary corrections higher to enter a sell order in the direction of the trend. The cloud is the cornerstone of all Ichimoku analysis and as such it is the most vital aspect to the indicator.
Time Entries with the Trigger & Base Line
Once you have built a bias of whether to look for buy or sell signals with the cloud, you can then turn to the two unique moving averages provided by Ichimoku. The fast moving average is a 9 period moving average and the slow moving average is a 26 period moving average by default. What is unique about these moving averages is that unlike their western counterparts, the calculation is built on mid-prices as opposed to closing prices. I often refer to the fast moving average as the trigger line and the slow moving average as the base line.
The Ichimoku components are introduced in a specific order because that is how you should analyze or trade the market. Once you’ve confirmed the trend by recognizing price as being below or above the cloud, you can move to the moving averages. If price is above the cloud and the trigger crosses above the base line you have the makings of a buy signal. If price is below the cloud and the trigger crosses below the base line you have the makings of a sell signal.
Confirm Entries with the Mysterious Lagging Line
In addition to the mystery of the cloud, the lagging line often confuses traders. This shouldn’t be the case as it’s a very simple line that is the close of the current candle pushed back 26 periods. When studying Ichimoku, I found that this line was considered by most traditional Japanese traders who utilize mainly Ichimoku as one of the most important components of the indicator.
Once price has broken above or below the cloud and the trigger line is crossing the base line with the trend, you can look to the lagging line as confirmation. The lagging line can best confirm the trade by breaking either above the cloud in a new uptrend or below the cloud in a developing downtrend. Looking above, you can see that the trend often gathers steam nicely after the lagging line breaks through the cloud. Another benefit of using the lagging line as a confirmation indicator is that the lagging line can build patience and discipline in your trading because you won’t be chasing the initial thrust but rather waiting for the correction to play out before entering in the direction of the overall trend.
Trading With Ichimoku Checklist
Now that you know the components of Ichimoku here is a checklist that you can print off or use to keep the main components of this dynamic trend following system:
Ichimoku Checklist:
1.Where is Price in Relation to the Cloud?
2. Is price consistently on one side of the cloud or is price whipping around on both sides consistently?
3. Which level of the Ichimoku would like to use to place your stop?
The 10 period exponential moving average bounce is one of favourite Forex trading strategies. In this lesson you are looking for a candle to reach the 10 EMA and bounce back in the original trend direction. You first target is the prior high or low (depending on which direction you are trading) and your second target is the opposite Bollinger Band.
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Indicators: Bollinger Bands ®
newdigital, 2013.08.06 13:49
Bollinger Bands Forex Trading Indicator
Developed by John Bollinger.
The Bollinger Bands indicator acts as a measure of volatility. This indicator is a price overlay indicator. The indicator consists of three lines; the middle line (moving average), an upper line and a lower line. These three bands will enclose the price and the price will move within these three bands.
This indicator forms upper and lower bands around a moving average. The default moving average is the 20-SMA. This indicator use the concept of standard deviations to form their upper and lower Bands.
The example is shown below.
Bollinger Bands Indicator
Because standard deviation is a measure of volatility and volatility of the market is dynamic, the bands keep adjust their width. higher volatility means higher standard deviation and the bands widen. Low volatility means the standard deviation is lower and the bands contract.
Bollinger Bands use price action to give a large amount of information. The information given by the this indicator includes:
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Indicators: Bollinger Bands ®
newdigital, 2013.08.06 13:51
How Bollinger Bands Indicator Works
Bollinger Bands calculations uses standard deviation to plot the bands, the default value used is 2.
Calculation
Bollinger considered the best default for his indicator to be 20 periods moving average and the the bands are then overlaid on the price action.
Standard Deviation is a statistics concept. It originates from the notion of normal distribution. One standard deviation away from the mean either plus or minus, will enclose 67.5 % of all price action movement. Two standard deviations away from the mean either plus or minus, will enclose 95 % of all price action movement.
This is why the Bollinger Bands indicator uses the standard deviation of 2 which will enclose 95 % of all price action. Only 5 % of price action will be outside the bands, this is why traders open or close trades when price hits one of the outer Bands.
The Bollinger Bands indicator main function is to measure volatility. What the Bollinger Bands upper and lower limits try to do is to confine price action of up to 95 percent of the possible closing prices
This indicator compares the current closing price with the moving average of the closing price. The difference between them is the volatility of the current price compared to the moving average. The volatility will increase or decrease the standard deviation.
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Indicators: Bollinger Bands ®
newdigital, 2013.08.06 13:54
Bollinger Bands and Volatility
When volatility is high; prices close far away from the moving average, the Bands width increases to accommodate more possible price action movement that can fall within 95% of the mean.
Bollinger bands will widen as volatility widens. This will show as bulges around the price. When bollinger bands widen like this it is a continuation pattern and price will continue moving in this direction. This is normally a continuation signal.
The example below illustrates the Bollinger bulge.
High Volatility and Low Volatility
When volatility is low; prices close closer towards the moving average, the width decreases to reduce the possible price action movement that can fall within 95% of the mean.
When volatility is low price will start to consolidate waiting for price to breakout. When the bollinger bands is moving sideways it is best to stay on the sidelines and not to place any trades.
The example is shown below when the bands narrowed.
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Indicators: Bollinger Bands ®
newdigital, 2013.08.06 13:57
Bollinger Bands Indicator Bulge and Squeeze Technical Analysis
The Bollinger Bands are self adjusting which means the bands widen and narrow depending on volatility.
Standard Deviation is the statistical measure of the volatility used to calculate the widening or narrowing of the bands. Standard deviation will be higher when prices are changing significantly and lower when markets are calmer.
The Bollinger Squeeze
Narrowing of Bands is a sign of consolidation and is known as the Bollinger band squeeze.
When the Bollinger Bands display narrow standard deviation it is usually a time of consolidation, and it is a signal that there will be a price breakout and it shows people are adjusting their positions for a new move. Also, the longer the prices stay within the narrow bands the greater the chance of a breakou
The Bollinger Bulge
The widening of Bands is a sign of a breakout and is known as the Bulge.
Bollinger Bands that are far apart can serve as a signal that a trend reversal is approaching. In the example below, the bands get very wide as a result of high volatility on the down swing. The trend reverses as prices reach an extreme level according to statistics and the theory of normal distribution. The "bulge" predicts the change to downtrend.
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Indicators: Bollinger Bands ®
newdigital, 2013.08.06 14:00
Bollinger Bands Price Action in Trending Forex Markets
Bollinger Bands indicator is used to identify and analyze trending markets. In a trending market this indicator clearly shows up or down direction.
This indicator can be used to determine the direction of the forex trend. In an uptrend this indicator will clearly show the direction of the trend, it will be heading upwards and price will be above middle bollinger.
In a downtrend the price will be below the middle band and the bands will be heading downwards.
By observing the patterns formed by bollinger bands a trader can determine the direction in which the price is likely to move.
Patterns and Continuation Signals
Forex Uptrend
Price hugs the upper band in a forex upward.
Forex DowntrendForum on trading, automated trading systems and testing trading strategies
Indicators: Bollinger Bands ®
newdigital, 2013.08.06 14:02
Bollinger Bands Price Action in Ranging Forex Markets
Bollinger Bands Indicator is also used to identify periods when a currency price is overextended. The guidelines below are considered when applying this indicator to a sideways trend.
It is very important because it is used to give indications that a break out may be upcoming. During a trending market these techniques do not hold, this only holds as long as Bollinger Bands are pointing sideways.
One of the uses of Bollinger Bands is to use the above overbought and oversold guidelines to establish price targets during a ranging market.
In the above ranging market the instances when the price level hits the upper or lower bands can be used as profit targets for long/short positions.
Trades can be opened when price hits the upper resistance level or lower support level. A stop loss should be placed a few pips above or below depending on the trade opened, just in case price action breaks out of the range.
Here is a strategy using the 100 SMA and 200 SMA.
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Indicators: Custom Moving Average
newdigital, 2013.07.31 07:48
How to choose a moving average to trade withA trader can choose a moving average based on the time frame that he is trading; the trader might choose the moving average to measure minute chart, hourly charts, day charts or even weekly.
The trader can also choose to average the closing price, opening price or median price.
Moving average is commonly used devices to measure strength of trends. The data is precise and its output as a line can be customized to ones preferences.
Using the moving average is one of the basic ways to generate buy and sell signals which are used to trade in the direction of the trend, since the moving average is a lagging and a trend following indicator. The Moving average indicator as a lagging indicator means that it will tend to give late signals as opposed to leading indicators. However, the Moving average as a lagging indicator gives more accurate signals and is less prone to whipsaws compared to leading indicators.
Traders choose the moving average period to use depending on the type of trading they do; short-term, medium-term and long-term.
- Short-term: 10 -50 Period Moving Average
- Medium-term: 50 - 100 Period Moving Average
- Long-term: 100 - 200 Period Moving Average
The period in this case can be measured in minute chart, hourly charts, day charts or even weekly. For our example we will use 1 hour period.Short term moving averages are sensitive to price action and can spot trends signals faster than the long term moving averages. line more closely than a long term (200 period) average. Shorter term moving averages are also more prone to whipsaws compared to long term ones.
Long term averages help avoid whipsaws, but are slower in spotting new trends and reversals.
Because long term moving averages calculate the average using more price data, it does not reverse as fast as a short term moving average and it is slow to catch the changes in the trend. However the longer term moving average is better when the trend stays in force for a longer time.
The work of a trader is to find a moving average that will identify trends as early as possible while at the same time avoiding fake-out signals (whipsaws).
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Indicators: Custom Moving Average
newdigital, 2013.07.31 07:58
20 Pips Price Range Moving Average Forex StrategyThe 20 pips price range moving average strategy is used with the 1 Hour and 15 minute Trading charts. On this chart time-frames we use the 100 and 200 simple moving average indicator.
Both the 1 Hour and 15 minute chart time-frames will use the 100 and 200 SMA (SMA Indicator) to determine the direction of the Forex trend.
The 1 Hour chart time-frame checks the long term direction of the Forex trend, upward or downward trend, depending on the direction of the moving averages. All trades taken should be in this direction.
We then use the 15 minute price chart to find the optimal point to enter trades. Trades are opened only when the price is within 20 pips range of the 200 simple MA, if price is not within this pip range trades are not opened.
Buy Signal - Forex Uptrend/Bullish Market
To generate Forex buy (bullish signals) using the 20 pips moving average Forex trading strategy, we shall use the 1hour and 15 minute chart time-frame.
On the 1 hour Forex chart time-frame the price of the currency pair should be above both the 100 and 200 simple moving average. We then move to a lower chart time-frame, the 15 minute chart time-frame to generate a trade signal.
On 15 minute chart time-frame, when price reaches the 20 pips range above the 200 SMA, we open a buy trade and place a stop loss 30 pips below the 200 SMA. Stop loss can be adjusted to the amount of Pips that are suitable for your risk but to avoid being stopped out by normal Forex volatility its best to use 30 pips stop loss.
A buy trade can also be opened when price touches the 100 Simple moving average, provided it’s not very far from the 200 SMA. Normally the 100 SMA will be within the 20 pips range of the 200 SMA.
Sell Signal – Forex Downtrend/Bearish Market
To generate Forex sell (short signals) using the 20 pips moving average Forex trading strategy, we shall also use the 1hour and 15 minute chart time-frame.
On the 1 hour chart time-frame, the price should be below both the 100 and 200 simple moving average. We then move to the 15 minute chart time-frame to generate a Trading Signal.
On 15 minute chart, when price reaches the 20 pips range below the 200 SMA, we open a sell trade and place a stop loss 30 pips above the 200 simple moving average.
With this method price will generally bounce of these levels because many traders watch these levels, and open similar trades at around the same point.
These levels act as short term resistance or support levels within the currency price charts.
Profit Taking level For This Trading Strategy
With this trading strategy the price will bounce and make a move in the direction of the original Forex trend. This move will range from 70 - 100 pips.
The best profit taking level would therefore be considered to be 80 pips from the 200 simple moving average.
Trading and training video (from youtube for example) about forex and financial market in general.
Please upload forex video you consider as interesting one. No direct advertising and no offtopic please.
Any the comments without video will be deleted.The Closing Price Reversal - Part 5 of a video series discussing short term price bar reversals such as the bearish rejection, the bullish rejection, the open close reversal, the closing price reversal, the hook reversal, the key reversal, the island reversal and the pivot point reversal.
FOREX TRADING - Scalping - 10 minute video as a practical example about scalping - with 3 MA indicators + price action
A Simple Explanation of the Economic Crisis in the US
This video offers a simple explanation of the economic crisis in the US, its causes, and potential solutions as well.
Here I show two trade i am in that are currently losers. I show my mistakes and hope others don't make the same mistakes.