Something Interesting in Financial Video May 2014 - page 3

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Strategy Video: Are We In a Bubble and How Would We Trade It?

  • Comfort in steady bull trends and nonexistent volatility has led to more 'bubble' talk with corrections
  • We don't have a sector-specific bubble now like 2000 or 2008 but rather a positioning bubble
  • While a bubble pop presents considerable opportunity, it demands higher qualification New to Forex?

"We are in a bubble"! The phrase has been used more than a few times in the past month. But is that an accurate assessment? How can we tell? And, how do we trade it? If we are in a 'bubble' now, it is not the traditional sector-specific overvaluation as with the Dot.com (2000) or Subprime (2008) collapses of the past 15 years. Our excesses now are more fundamental to financial participation. In the weekend Strategy Video, we look at what kind of bubble we may be facing now, how to possibly gauge its undoing and where the trades will be should it come crashing down.



 

Ichimoku Kinko Hyo Trading System

A brief look at the terminology, signals and methods for taking trades using Ichimoku Kinko Hyo.

More video on this subject:

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Ichimoku threads/posts on mql5.com forum

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Ichimoku indicator description

  1. Tenkan Sen - moving average of the highest high and lowest low over the last 9 trading days. (Highest high + Lowest low) / 2 over the last 9 trading days
  2. Kijun Sen - moving average of the highest high and lowest low over the last 26 trading days. (Highest high + Lowest low) / 2 over the last 26 trading days.
  3. Senkou Span A - the average of the Tenkan Sen and Kijun Sen, plotted 26 days ahead. (Tenkan Sen + Kijun Sen) / 2 plotted 26 days ahead
  4. Senkou Span B - the average of the highest high and lowest low over the last 52 days, plotted 26 days ahead. (Highest high + Lowest low) / 2 over the last 52 trading days plotted 26 days ahead.
  5. Chikou Span - the closing price plotted 26 days behind.

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Forum on trading, automated trading systems and testing trading strategies

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?

  • Above the cloud -filtered for buy only signals
  • In the Cloud - be cautious but ready to jump in on the prior trend or finesse a current position. what the candle stick formations heavily
  • Below the cloud - filtered for short only trades

2. Is price consistently on one side of the cloud or is price whipping around on both sides consistently?

  • Ichimoku is best used with clear trends and should be set aside during ranging markets.

3. Which level of the Ichimoku would like to use to place your stop?

  • If you use Ichimoku to place stops as well, you can either use the cloud or the base line.





 

Secret of Profitable Forex Traders 

Before you start trading forex, learn the secret of profitable forex traders.


 
A Simple Breakout Day Trading Strategy

Here's a simple breakout day trading strategy that you can use for your day trading - by Markus Heitkoetter

Forum on trading, automated trading systems and testing trading strategies

Something Interesting to Read April 2014

newdigital, 2014.04.09 17:18

The Complete Guide to Day Trading: A Practical Manual From a Professional Day Trading Coach
by Markus Heitkoetter



Do you want to be a day trader? Every day, millions of dollars change hands in the markets, presenting the perfect opportunity for people just like you to make significant money and profits through the art of day trading.
But here's the question: is day trading right for you? And, if it is, how do you get started?
In his new three-part guide, professional day trading coach Markus Heitkoetter lays out a simple, proven system for trading success. From the basic essentials of trading to the actual process of making money in the markets, he'll cover it all.

  • What You Need To Get Started: The Tools, The Methods, The Mindset
  • Finding the Best Market to Trade: Futures, Forex, Stocks, or Options
  • A 7-Step Approach to Developing Your Own Profitable Trading Strategy
  • The 10 Power Principles of Successful Trading Strategies
  • Avoiding The 7 Common Mistakes of Traders
  • Get Started Without Risking A Single Penny
  • Ready-To-Use Trading Plan Templates, Checklists, Resource Directories, & More

Loaded with easy-to-use information, proven and reliable strategies and guidelines, and a practical hands-on approach to the industry, The Complete Guide to Day Trading is your own personal manual to success in the markets.


 

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Press review

newdigital, 2014.05.16 13:42

Trading Video: Risk and Yield Trends Unlikely to Turn EURUSD, EURJPY

  • Risk aversion reared its ugly head in equities this past session, but the fear wasn't very contagious
  • Despite key event risk like EZ GDP and US CPI, rate expectations continued a general trend of compression
  • Rate expectations and risk trends may struggle with complacency, but some trends are better set


A sharp drop from risk trends had FX traders looking for volatility amongst the majors. Yet, the masses refused to bite having become quite acclimated to provocative counter-moves that routinely fall short of momentum. At the same time, trends arising from divergent monetary policy bearings surrendered their drive to a compression in yields. While short-term ambitions have been put on hold, the medium-term trade potential remains. A risk aversion move would be far more violent and self-sustaining than a 'risk on' outcome; and the recent shift in central bank bearings has considerable premium yet to play out. We look at how the trade picture changes for pairs like EURUSD, GBPUSD, EURJPY and others as volatility changes around major themes in today's Trading Video.


 

Trading Video: What Will Decide EURUSD Trend, Range or Reversal?

  • With momentum behind risk and rate expectations themes easing, there is still a bias for EURUSD
  • GBPUSD's return to a year-long bull trend or break of 1.6750 may be decided by UK CPI data this week
  • Risk trends are a constant threat, but there is a hierarchy of opportunity starting with USDJPY

Another effort to generate enough momentum for breakout velocity grew winded this past week. Some pairs like EURUSD and GBPJPY forged serious technical breaks, while others such as GBPUSD and USDJPY came up short. Looking ahead to next week, it is important to plan for scenarios where burgeoning themes fade or otherwise finally take control of larger market trends. We discuss the circumstances and trade opportunities for 'status quo', a new era of activity and even those that may perform regardless of the systemic disposition in this weekend Trading Video.



 

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Press review

newdigital, 2014.05.17 16:15

Nikkei forecast for the week of May 19, 2014, Technical Analysis

The Nikkei tried to rally during the week, but as you can see found a lot of resistance at the 14,500 level. The area is a large, round, psychologically significant number that the markets will try to respect, but eventually the market will need to break above the top of the shooting star in order to go further to the upside, the move we expect to see. The breaking below of the 14,000 level will send this market falling significantly in the meantime. The upside is what we prefer, and think is most likely to happen.






 

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Press review

newdigital, 2014.05.17 16:54

DAX forecast for the week of May 19, 2014, Technical Analysis

The DAX broke to the upside during the week, but found the €9800 level to be a bit too resistive to overcome. With that, we pulled back and formed a massive shooting star, but the €9600 level is in and of itself a significant support level. Because of this, we feel that ultimately the market will follow the trend that it’s been in for some time, sending this market back above the €9800 level. With that in mind, we have no interest in selling this market and can only follow the longer-term trend.






 

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Press review

newdigital, 2014.05.17 18:01

NASDAQ forecast for the week of May 19, 2014, Technical Analysis

The NASDAQ when back and forth during the sessions of the last week, and as a result it appears that the market really is a ready to go anywhere quite yet. The 4000 level has offered significant support previously, and as a result we feel that the market will ultimately go higher, as we are simply sitting on top of a significant amount of support. However, we also recognize that there is a nice potential for a large uptrend line that we are touching now. On a break above the highs from the last couple of weeks, essentially the 4200 level, we believe that the market goes much higher.





 

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Press review

newdigital, 2014.05.17 18:03

S&P 500 forecast for the week of May 19, 2014, Technical Analysis

The previous week for the S&P 500 was back and forth and as a result we ended up forming the neutral candle that you see on the chart. This market is essentially consolidation between the 1900 level on the top, and the 1860 level on the bottom. With that, it appears that we are going to continue to go sideways for the short term, but ultimately we need a break above the 1900 level in order to start going long. That being the case, we believe that this market at that point in time would go to the 2000 level.






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