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Experts says:
A few words from master John Bollinger:
investing. First,a college-level statistics course of the type given in
the psychology department will provide you with the foundation
you need to understand the numbers you are working with.
Second,a few basic psychology courses will shed some light on the
workings of the market,especially if one of them is a course in
mass psychology. Finally,learn how to program. BASIC is a good
place to start,as is LISP. Although C has become the language of
choice for serious developers,BASIC will be sufficient to let you
deal with the analysis programs you are most likely to run into.
And while LISP may not be the language de jour,mastering it can
be fun and will give you a set of skills you will find useful no
matter what language you settle into. Whatever you do,don’t let
computers intimidate you. They are just tools,and can be fun and
rewarding to explore.
Investing is a tough task; take care out there.I think John wants to say let's prepare us to research about and to find what's behind. At lest in the most simple levels.
Like to detect and RSI when we see it undercover or by just doing something different than to be an oscillator. Like this one marking positives/negatives above/below 50
Recap and Patterns
Nice morning and Cable and Euro. Good moves and easy moves.
Why easy? because it's a pattern trading, similar to some trades posted on this thread and this means the things happens again, again, again... and if we know to recognize this patterns we could make profitable trades by only remember what happened in the past.
Observation is a top skill a trader have and need to develop. Observation to discover patterns come to accomplish the rules posted some days ago. Don't change your indicator as your t-shirt.
Now you could up your charts and start to looking for patterns to see how the price movement is not random at all.
First is cable.
Momentum + Price + Time
The hidden pattern on this pictures is called firing off stops.
Recap
The Euro is showing almost the same pattern with slightly variation helped with the MT4 screen distortion (of course metaquotes thinks mql5 is most important than fix this)
Just lines with this pictures, imagine what I could write.
Patterns
Over and over and over. Not equals but pretty near.
Euro, 90 pips triangle (see picture in post #24). 90 pips target achieved.
Recap
Strange day for the Cable today.
First move was better to catch than second or second better than one? I don't know. Bath had pros and cons. Both could be traded with the usual risk.
Not much to say about. We could be screwed on both trades, maybe successful with one. But no problem at all. Losers are part of the game.
But EURO could be traded twice being the second the best according to MACD position and pattern. H1 MACD was below zero line. Entry on green rectangle for 70 pips or see M15 picture.
Currently, Euro is below W Pivot (bearish) but stopped on 38.2 Fibo level.
And the break of 38.2 Weekly support mke the Euro to test 50 fibo level. Next stop 61.8?
H4 shows a possible target on 1.5390/80, 230 pips. Keep European truckers going to stop and we will go there.
And the break of 38.2 Weekly support mke the Euro to test 50 fibo level. Next stop 61.8?
H4 shows a possible target on 1.5390/80, 230 pips. Keep European truckers going to stop and we will go there.
Hell yeah!!!
The MACD
Introduced by Gerald Appel, convergence and divergence between moving averages (MACD) indicator is a traditional, simple and reliable.
MACD uses moving averages in their formula, is an open indicator so the overbought and oversold zones are relative to their maximum and minimum previous.
Provides a sensitive measure of the intensity of market sentiment and provides early clues to the continuation or revocation of the trend.
According to Appel, this indicator is particularly reliable to note entry points
after a sharp decline.
The MACD indicator can be applied to stock market as a whole and also the recently recommended, of course, for the currency market.
The dynamics of their formula comes from subtracting the longest moving average of shorter.
Have a line bisector and apply to it the criteria of interpretive indicators open with the peculiarities that we are going to elaborate.
From the difference in the two moving averages 26-12, you can build a histogram (perpendicular bars below zero (-) and above zero (+), - sessions on 12 EMA is the fastest and the 26-session EMA is the slowest. Generally, a host of 9 sessions to the MACD called Signal, complete the formula and is the slowest line and is built as an EMA of differences from 12 to 26 in each EMA logout computed.
The meaning of the histogram is to detect the difference between the two lines 12 and 26, when the histogram is above zero and then begins to decline we are witnessing a weakening of the upward trend or loss of time, in any other case where histogram is below the zero line and opens it over this is a beginning of purchases and a weakening of the bearish trend or loss of acceleration.
Also when the histogram is above the line and we understand that Signal is signaling the beginning of the movement and when the bull Histogram penetrates down the line Signal, we're in the presence of a OB value bearish or beginning of change.
It is noteworthy that the system for the midline "Zero" is a base of support or resistance, so that once and penetrated with suitable filters is a sign of entering the market.
MACD main criteria for signals:
1. Divergence bullish/bearish
2. Crossing moving average
3. Crossing south-north/north-south of the centerline
4. Overbought and oversold.
As an indicator there are no open areas of exhaustive overbought and oversold, such as diagrams by the RSI, 70/30, so it is up to the analyst to try to delineate those areas.
The first method is relative areas involves strokes of the kind support or resistance using the previous peaks of the graphical histogram, so that in future give us benchmarks of price performance.
One of the prerogatives of MACD is that incorporates aspects of acceleration and the trend in a movement. As an indicator of MA eventually follows the movements of the dominant trend in some cases and this makes it an indicator with delays.
MACD has the ability to predict movements, through the correct interpretation of their differences. Differences can be dominant factors in a change of trend. This can serve as an alert so that you take some profits in positions upwards, or for operators to consider initiating a more aggressive position to the floor.
The device used in the MACD averages can be adapted for each pair of currencies, equities or indexes. For longer-term charts, daily or weekly, a system of faster moving averages 8-21-8 example may be appropriate.
For the fact that the market is very volatile.
Gerald Appel recommends 8-17-9 MACD signals to generate buying and 12-25-9 MACD signal to confirm a sale to an action or value, which has had a strong bullish movement.
But again, all depends on you.
Cycles
What is a cycle?
A cycle is the changing process of the curve of prices and reflects a natural logic of evolution and involution associated.
When you're doing the technical analysis you look thel increase or decrease in the value under consideration, however, most of the time the other axis of graphics that is the time is omitted, the theory of cycles helps us understand the temporary space where events like ups or downs in prices occurs.
Cycle features:
1. Breadth: measuring the height of the wave, can be expressed in points, dollars, etc. ounces.
2. Period: is the time lapse between a valley and another and may be located between minimum or maximum relative.
3. Phase: is the location of time in the valley of a wave and allows linking to different cycles and make forecasts through their differences.
How isolate cycles?
Its graphics system can help to accomplish this task, in principle should make a visual inspection and try to determine for example where the relative minimums are.
Consider the following, if you wanted to trace the movement of the flight of a fly from point A to point B immediately you would a straight line, however displacement in time and space insect does not take place in a straight line but draws a parable , Takeoff, landing and crest.
This parable was called Fractal by the scientist Benoit Mandelbrot in 1975.
Given the volatility and the number of participants in the markets is necessary to apply concepts to appreciate these phenomena, so many times to predict the behavior of prices is needed more than one average, and one compare. And not lose sight of this concept.
The indicators that deal in their formula on comparison or difference between the maximum, minimum and more closures are advised to operate under the structure of cycles, and comparing such data from the market trying to design a possible trajectory of the curve prices. Among them can be found at stochastic, CCI and RVI.
What these oscillators are trying to prove is the rule of thumb: when a value is upward, closes will be very near to their maximum and when prices are declining closes will be very near to the minimum.
To keep your system without contradictions and easy to read, do not use more than two similar indicators to read another and filtered if you prefer a more for a final confirmation such as CCI or the RVI.
The coordinated interpretation of two or more variants gives us excellent market opportunities.