The Hidden Secret of Technical Analysis
Discover a whole 'other world' of technical analysis, where novice traders fear to go.
Forum on trading, automated trading systems and testing trading strategies
Market Condition Evaluation based on standard indicators in Metatrader 5
newdigital, 2013.06.06 15:54
This is one of setup to be used with technical analysis - this post. But I uploaded on this thread Stochastic the other setup which we can use in technical analysis too (to create the threads and to make simple analysis of the market condition). This second one is related to Stochastic and it is here with one exception: period for slow MA should be 200 instead of 100 for example.
newdigital, 2013.06.06 15:06
This is very simple setup related to technical analysis:
This kind of setup is used for technical analysis. But why the traders are not trading their technical analysis setups? we watched tv ... we are reading some threads about support resistance levels and so on. Why they are not connecting their setups/EAs to the Signals? because this Stochastic condition (overbought/oversold) are not coming on the same bar with the main signals to open buy/sell trade. Let me explain more.
If you desire true market conditions to trade in then you need to use an ECN broker for your trading. However, there are a lot of market maker Forex brokers that pretend to be ECN brokers so watch the video to see how they can fool new traders.
is the 1st video in a series on economic reports created for all
markets, or for those who simply have an interest in economics. In this
and the next lesson, we cover the Employment Situation Report, also
known as Non Farm Payroll.
Non-farm Payrolls is the assessment of the total number of employees recorded in payrolls.
This is a very strong indicator
that shows the change in employment in the country. The growth of this
indicator characterizes the increase in employment and leads to the
growth of the dollar. It is considered an indicator tending to move the
market. There is a rule of thumb that an increase in its value by
200,000 per month equates to an increase in GDP by 3.0%.
FF forum economic calendar :
mql5 forum thread :
Non-Farm Employment Strategy
AUDUSD M5 with 45 pips in profit (by equity) for NFP :
EURUSD M5 : 87 pips price movement by NFP news event :
NZDUSD M5 : 37 pips price movement by USD - Non-Farm Employment Change :
Trading EURUSD during NFP :
This video is good practical example about how to analyse support/resistance for stocks
newdigital, 2013.11.22 19:06
Breakout with Ichimoku (based on Take Advantage of False Breakouts at Great Prices with Ichimoku article)
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.
newdigital, 2014.01.07 07:56
Watch Price In Relation To Ichimoku Cloud (adapted from dailyfx article)
Ichimoku is a trend following indicator that almost anyone can learn to
use with ease. When trading with Ichimoku, you’re often advised to start
with the cloud to get a feel for whether or not price is trending up or
down to past points on the chart. However, to get a better feel for the
strength of the trend, it is better to see how price is reacting to the
cloud rather than only looking where price is in relation to the cloud
at any point in time.
Price & Cloud Interactions
USDJPY Has Demonstrated a Strong Trend Due To Multiple Cloud Bounces:
The cloud is a dynamic indicator that takes into consideration two
aspects of a currency pair. In an uptrend, the top line of the cloud,
traditionally known as Senkou Span A is composed of the mid-point
between the 9 & 26 moving average based on mid-prices, or Tenkan-Sen
& Kijun-Sen, and pushed forward 26-periods in order to give you a
reference for the strength of a move. If current price is above the
cloud, then current price is stronger than the mid-point of the 9 &
26 moving average from 26-periods ago, identifying the strength of the
The cloud’s bottom line in an uptrend, traditionally known as Senkou
Span B, is composed of the mid-point over the last 52-periods on the
chart and is also pushed forward 26-periods just like the top line.
Therefore, if the current candle is above the cloud, which was created
from 26-periods ago, then you can see that price is above both the
mid-point of the 9 & 26 moving average as well as the mid-point over
the last 52-sessions.
Price Bouncing Off Cloud Shows You a Well-Supported Trend
The key point of this article is that it’s not enough to simply know
where price is in relation to the cloud to have a strong trend based
trade. What you need to do is see if price is consistently on one side
of the cloud or if price flips on either side of the cloud showing a
very weak or non-existent trend. If there is no consistency with price
and is consistently bouncing higher off the cloud proving the cloud as
support and that the uptrend is strong, then it is best to take Ichimoku
off your charts as Ichimoku doesn’t work well in ranges and will likely
only clog up the charts if there is no clear trend.
A Cloud & Price Example Trade with USDJPY
Entry to Buy: 105.00 (Breakout through resistance)
Stop: 103.70 (recent price action low and below May 2013 High – Pivotal Support)
Limit: 107.50 (Monthly R2 Pivot)
If this is your first reading of the Ichimoku report, here is a definitive guide on the versatile indicator:
The Importance of Exit Strategy - Part #1
The threads on the forum :
newdigital, 2013.10.09 18:20
How to Exit While Trading with Trendlines
When we place our trades based on trendlines, we are placing them based
on support and resistance levels. We are thinking the price will bounce
off a trendline like it did in the past. I propose we use the same logic
when setting our stops and limits.
In the example above, it’s easy to see the sell entry that was given to
us based on the bearish trendline. We entered right at the trendline
looking for a bounce back down, but where do we want to exit? When do we
call it quits if the trade goes against us? Where do we place our
profit target? Let’s take a look.
Setting Stops Beyond Support/Resistance
We need to look at placing our stop somewhere above this trendline. If
the resistance is broken through, we were wrong on the trade and should
accept the loss quickly. It’s possible that price could return back to
profitable territory after breaking this resistance, but we cannot rely
on being lucky. We can only trade based on what we see.
I like to set my stop 5-25 pips from the closest support/resistance
level depending on the time frame I am trading. The smaller the time
frame of the chart, the tighter I will place my stops. On this trade, I
set my stop 5-6 pips away from my entry since that was beyond the
resistance line as well as the previous swing high (Bounce #2).
Remember that when we set our Stop loss, this is also setting our
monetary risk on the trade. So we also need to consider our trade side
in respect to our Stop loss distance.
Setting Limits Within Support/Resistance
Now that our stop is set, we need to focus on our profit target. For our limit placement, we have two objectives:
And the reason we want our limit to be placed within the closest
support/resistance level (by at least 5 pips) is for the exact same
rationale we used to open this trade to begin with. We know prices have a
tendency to bounce off price levels they have bounced off of before, so
we want to make sure that no support/resistance is in between our entry
and our limit level. In the example below you can see I placed my limit
5 pips above the swing low (potential support). This gives price a
clear path to a profitable trade.
Trendline Strategy Complete
This trendline strategy is one that can be used universally across all
currency pairs and time frames so it is definitely a worthwhile style of
trading to learn. The logic behind the entry and exit rules is also
something that can be tailored to other types of strategies as well.
Indicators: Stochastic Oscillator Blau_TS_Stochastic
newdigital, 2014.01.22 12:58
How to Trade with Stochastic Oscillator (based on dailyfx.com article)
Stochastic is a simple momentum oscillator developed by George C. Lane
in the late 1950’s. Being a momentum oscillator, Stochastic can help
determine when a currency pair is overbought or oversold. Since the
oscillator is over 50 years old, it has stood the test of time, which is
a large reason why many traders use it to this day.
Though there are multiple variations of Stochastic, today we’ll focus solely on Slow Stochastic.
Slow stochastic is found at the bottom of your chart and is made up of
two moving averages. These moving averages are bound between 0 and 100.
The blue line is the %K line and the red line is the %D line. Since %D
is a moving average of %K, the red line will also lag or trail the blue
Traders are constantly looking for ways to catch new trends that are
developing. Therefore, momentum oscillators can provide clues when the
market’s momentum is slowing down, which often precedes a shift in
trend. As a result, a trader using stochastic can see these shifts in
trend on their chart.
Momentum shifts directions when these two Stochastic lines cross.
Therefore, a trader takes a signal in the direction of the cross when
the blue line crosses the red line.
As you can see from the picture above, the short term trends were
detected by Stochastic. However, traders are always looking for ways to
improve signals so they can be strengthened. There are two ways we can
filter these trades to improve the strength of signal.
1 - Look for Crossovers at Extreme Levels
Naturally, a trader won’t want to take every signal that appears. Some
signals are stronger than others. The first filter we can apply to the
oscillator is taking cross overs that occur at extreme levels.
Since the oscillator is bound between 0 and 100, overbought is
considered above the 80 level. On the other hand, oversold is considered
below the 20 level. Therefore, cross downs that occur above 80 would
indicate a potential shifting trend lower from overbought levels.
Likewise, a cross up that occurs below 20 would indicate a potential shifting trend higher from oversold levels.
2 - Filter Trades on Higher Time Frame in Trend’s Direction
The second filter we can look to add is a trend filter. If we find a
very strong uptrend, the Stochastic oscillator is likely to remain in
overbought levels for an extended period of time giving many false sell
We would not want to sell a strong uptrend since more pips are available in the direction of the trend.
Therefore, if we find a strong uptrend, we need to look for a dip or
correction to time a buy entry. That means waiting for an intraday chart
to correct and show oversold readings.
At that point, if Stochastic crosses up from oversold levels, then the
selling pressure and momentum is likely alleviated. This provides us a
signal to buy which is in alignment with the larger trend.
Indicators: Stochastic Oscillator
newdigital, 2013.10.09 07:23
Pinpointing Forex Trend Trade Entries with Stochastics
By far, traders who trade in the direction of the predominant daily
trend have a higher percentage of success than those who trade the
counter trend. One of the biggest attractions of the Forex market it is
characterized by long trends that afford traders the potential to make
hundreds of pips if they have timed their entries with precision and
used protective stops to limit risk.
But How Can Traders Find Where to Enter with a Risk for Maximum Gain?
The mantra, “the trend is your friend until it ends,” can be found in
many trading books, but it seems that many forex traders have not made
the trend their friend and in some cases, the trend has become the
enemy. Rather than being on the receiving end of those pips afforded to
traders who have correctly entered the trend, many traders have been on
the “giving” end of the trade losing pips while fighting the trend.
As people have turned to online dating services to meet their ideal
match, forex traders can turn to stochastics as a way of making the
trend the their friend again.
In an uptrend on a daily chart, stochastics %K and %D lines moving below
the horizontal ‘20’ reference line and coming back above the 20 line
indicates that the profit-taking correction is coming to an end. The
stochastic crossing up also tells us that buyers are beginning to enter
the market again. In addition, this shows that there is good support.
How to Trade the Trend Using Stochastics
Patience is the name of the game when attempting to trade with the
trend. Getting into the trend too early can expose traders to large
drawdowns. Getting in too late reduces the amount of profit before the
swing is completed.
Use the stochastics indicator to find that “Goldilocks” entry of not too
early and not too late. Once a strong uptrend is found, wait for
stochastics with the settings of 15, 5, 5 to move into the oversold
region below the 20 horizontal reference line. Next, wait for the %K and
%D lines to move back above the 20 line. Enter long with a stop placed a
few pips below the last low. Set a limit for at least twice the size of
Once in an uptrend position, traders will attempt to squeeze as much
profit as possible. Traders usually take profits on their open position
or trail stops once stochastics moves into the overbought region. It is
important to note that a forex currency pair can continue to make new
highs even though stochastics is in the overbought region.
So next time you see a trend and you do not know how to make it your
“friend”, let the stochastics indicator introduce you! Once these swings
are highlighted by stochastics, stop placement becomes easier as well.
stochastics crossovers in an uptrend can help you pinpoint your entries
to join the major trend.
4. Difference between Fixed spreads and Variable spreads in Forex
Fixed spreads are hard to find these days. Variable spreads however, are
used widely by various Forex brokers. You just need to make sure that
your broker is not using varibale spreads to hunt your stop loss. Watch
the video to find out more.
02: NON FARM PAYROLL (Part 2)- ECONOMIC REPORTS FOR ALL MARKETS
This is the second part of video lesson about nfp. The first part of the lesson is on this post :
Something Interesting in Financial Video January 2014
newdigital, 2014.01.19 07:43
We interview Adam Hewison, president and CEO of INO.com