Forex of tendencies the percent recoil.

[Sirojiddin Nosirov]

 

Forex of tendencies the percent recoil

 

 

One of the simplest and most useful market tendencies, about which it is necessary to know, is percent recoil. We already indicated that the markets do not usually have straight trends. Trends are characterized by the zigzags, which are determined by the alternating peaks and drops. Average trends present the correction of basic trends, while short term trends they present the correction of averages. These corrections, or interruptions, usually roll away the previous trend to the predictable percent size. It is most widely known to 50% - ache recoil. The price, which is past from 20 to 40, will very frequently roll away somewhere to 10 points (50%) to the renewal of increase. Knowing this, investor can examine the purchase of currency, which lost about half of the sum of its previous increase. During the lower trend the actions frequently rise to half from the previous reductions to the renewal of their reduction. 

Usually market rolls away the minimum to one third of previous motion. Ascending from 30 to 60 is frequently characterized 10- point by correction (one third from the advance to 30 points). This tendency of minimum recoil especially helps with the determination of the time of purchases or sales. The investor can to determine previously with the upper trend, where is located recoil to one third, and to use this level for the potential point of purchase. With the lower trend the rebound in one third presents the zone of sale. Sometimes strong correction rolls away on two thirds of previous motion. This level becomes very significant. If correction actually is present, prices rarely will roll away more than to two thirds.

This zone presents another useful zone of support on the graphs. If market moves beyond the limits of two thirds, then, apparently, occurred a trend movement.

The majorities of graphic program packets make possible for user to determine the levels of recoil on the graph. This is done by two methods. After user determined beginning and end of the motion by cursor, appears the table, which reports, different percent recoils will occur at what price level. The second option carries out the horizontal lines, which luminesce the levels on the price graph, at which will occur different percent recoils. These lines of recoil are the levels of support with the upper trend and the levels of resistance with the lower trend. User can previously establish percent recoils on any necessary levels. They are most frequently used by 33, 38, 50, 62 and 66%.

WHY 38 I 62%

These two levels of recoil rise from the series of the numbers, known as “the number of Fibonacci”. These series begin from number 1 and add every two standing with series of number together (for example, 1 + 1=2; 1 +2=3 and so forth). The following numbers of Fibonacci most frequently are used: 1,2, 3, 5, 8, 13, 21, 34, 55 and 89. The attitude of Fibonacci is very important. 

Most important - 38 and 62. Each number of Fibonacci composes approximately 62% of following, higher number (for example, 5/8 = 0,625); hence the level of recoil to 62%. 38 is the result of subtraction 62 of 100 (100-62=38); and hence percent recoil to 38%. Is probable, this all that you should know at the present moment about these numbers. They are very popular among the professional merchants and widely are used for determining the prospects corrections.

 

CONCLUSIONS

The critical goal of visual merchant is the ability to determine market trend and to calculate, when this trend changes. Entire purpose of visual analysis in participating with the significant upper trends and avoiding significant trends downward. There are, however, different categories of trend. The basic trend (usually more than 6 months) measures the most important trend of market. The average trend (it lasts from 1 to 6 months) tracks the less important trends, which are to the correction of basic trend. The small trend (usually it lasts less than the month) has the smallest value of three and are measured short term market fluctuations. This shorter tendency is extremely important for purposes the determination of the moment of entrance for the market. It is important to control all three trends in order to see the suitable prospect. For this reason it is necessary to use day, weekly and monthly graphs.

Upper trend presents a series of the being risen peaks (resistance) and the drops (support). Lower trend presents a series of the reduced peaks (resistance) and the drops (support). Resistance levels are always located above market. The levels of support are always located below market. The lines of trend are brought along the peaks and the drops and are one of the easiest methods of measuring the market trends. Recoil to 50% is another useful technology. Also by percent recoils they appear 33, 38, 62 and 66%. The doubling of price usually speaks about the feather of sale
 on the market. The division of price of two usually signals about the state the feather of sale on the market. The following head shows, as the simple lines of trend together with the levels of support and resistance for creating the predictable price figures are combined.