Something Interesting in Financial Video January 2014 - page 3

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Sergey Golubev
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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.


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Stochastic

newdigital, 2013.06.06 15:06

This is very simple setup related to technical analysis:

  • Moving Averages indicator with period 55, method - simple, apply to close.
  • Moving Averages indicator with period 100, method - simple, apply to close.
  • Stochastic indicator with the settings 100/8/8

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.



Sergey Golubev
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Sergey Golubev  
3. Market maker brokers pretending to be ECN brokers

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.



Sergey Golubev
Moderator
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Sergey Golubev  
01: NON FARM PAYROLL (Part 1) - ECONOMIC REPORTS FOR ALL MARKETS

This 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 (metatrader5.com)

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%.

  • Release Frequency: monthly.
  • Release Schedule: 08:30 EST, the first Friday of the month.
  • Source: Bureau of Labor Statistics, U.S. Department of Labor.

============

FF forum economic calendar :

  • Source : Bureau of Labor Statistics
  • Measures : Change in the number of employed people during the previous month, excluding the farming industry
  • Usual Effect : Actual > Forecast = Good for currency
  • Frequency : Released monthly, usually on the first Friday after the month ends
  • Why Traders Care : Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity
  • Also Called : Non-Farm Payrolls, NFP, Employment Change

============

 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 :



==================



Sergey Golubev
Moderator
114320
Sergey Golubev  
Google's Stock Analyzed (Symbol GOOG)

Watch over Adam Hewison's shoulder as he analyzes Google's stock (symbol: goog). Where are the support and resistant levels as GOOG moves into a trading range opposed to a trending range? How long will we move sideways before goog starts to test the lows again.

This video is good practical example about how to analyse support/resistance for stocks



Sergey Golubev
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Sergey Golubev  
Ichimoku - Drawbacks Of Ichimoku Kinko Hyo


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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.


  • Ichimoku Trade: Sell EURUSD If Price Breaks Below 1.3415 Showing a False Breakout Occurred
  • Stop: 1.3550 (Technical Invalidation Point on the Chart)
  • Limit: 1.3295 (Monthly Low)

If this is your first reading of the Ichimoku report, here is a recap of the traditional rules for a sell trade:

  • Price is below the Kumo Cloud (That will be our entry trigger)
  • The trigger line (black) is below the base line (light blue) or is crossing below
  • Lagging line is below price action from 26 periods ago (bright green line)
  • Kumo ahead of price is bearish and falling (red cloud = bearish Kumo)

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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Libraries: IncIchimokuOnArray

newdigital, 2014.01.07 07:56

Watch Price In Relation To Ichimoku Cloud (adapted from dailyfx article)

  • Price & Cloud Relationships
  • Price Bouncing Off Cloud Shows You A Well-Supported Trend
  • An Example Ichimoku Trade with USDJPY

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 current trend.

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:

  • Full Candle Bodies above the Kumo Cloud
  • The trigger line (black) is above the base line (light blue) or is crossing below
  • Lagging line is above price action from 26 periods ago (Bright green line)
  • Kumo ahead of price is bullish and rising (blue cloud = bullish Kumo)


Sergey Golubev
Moderator
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Sergey Golubev  

The Importance of Exit Strategy - Part #1

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The threads on the forum :

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Videos :

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Forum on trading, automated trading systems and testing trading strategies

Indicators: AutoTrendLines

newdigital, 2013.10.09 18:20

How to Exit While Trading with Trendlines

Talking Points:

  • Traders should focus on their exit plan just as much as their trade entries.
  • Trendline traders could set their stop losses beyond the nearest support or resistance level and set their limits within the nearest support or resistance level.
  • Setting exit prices according to support and resistance levels could tip the odds in your favor.
How Important Is Your Exit Strategy?

Many traders have a strong set of rules that they follow to enter trades, but have difficulty in selecting their exits. This is troubling because how we exit a trade should be just as important, if not more important than how a trade is entered. After all, our exits ultimately determine if our trades are profitable for us or not. So we need to make sure our exit strategy is just as logical as our entry strategy.

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:

  • Our limit’s distance needs to be further than our stop’s distance.
  • Our limit needs to be placed within the closest support/resistance (by at least 5 pips).
The reason we want our limit further than our stop is because we always want to try to make more money than what we are risking on each individual trade. This is something we discuss heavily at DailyFX so I will say it again here. We want a positive risk/reward ratio.

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. Good trading!




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Sergey Golubev
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Sergey Golubev  

Forex Stochastics

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Indicators: Stochastic Oscillator Blau_TS_Stochastic

newdigital, 2014.01.22 12:58

How to Trade with Stochastic Oscillator (based on dailyfx.com article)

  • Slow Stochastic provides clear signals in a forex strategy
  • Take only those signals from overbought or oversold levels
  • Filter forex signals so you are taking only those in the direction of the trend

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 line.

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 signals.

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.


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Indicators: Stochastic Oscillator

newdigital, 2013.10.09 07:23

Pinpointing Forex Trend Trade Entries with Stochastics

  • An uptrend is made up of higher highs and higher lows. Traders can use Stochastics to find excellent risk to reward entries at those low support points in the trend.
  • A downtrend is made up of lower highs and lower lows. Forex traders can use Stochastics to find excellent risk to reward entries at these resistance high points
  • Stochastics can be used to alert a forex trader to either tighten stops, reduce the position size, or take profit once in a trend trade

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 the stop.


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.



Sergey Golubev
Moderator
114320
Sergey Golubev  

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.



Sergey Golubev
Moderator
114320
Sergey Golubev  

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 :

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Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video January 2014

newdigital, 2014.01.19 07:43

01: NON FARM PAYROLL (Part 1) - ECONOMIC REPORTS FOR ALL MARKETS

This 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 (metatrader5.com)

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%.

  • Release Frequency: monthly.
  • Release Schedule: 08:30 EST, the first Friday of the month.
  • Source: Bureau of Labor Statistics, U.S. Department of Labor.

============

FF forum economic calendar :

  • Source : Bureau of Labor Statistics
  • Measures : Change in the number of employed people during the previous month, excluding the farming industry
  • Usual Effect : Actual > Forecast = Good for currency
  • Frequency : Released monthly, usually on the first Friday after the month ends
  • Why Traders Care : Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity
  • Also Called : Non-Farm Payrolls, NFP, Employment Change

============

 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 :





Sergey Golubev
Moderator
114320
Sergey Golubev  
How I Became A Successful Trader

We interview Adam Hewison, president and CEO of INO.com



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