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Statistics |
| Unique Visitors: 9 |
| Total Unique Visitors: 130228 |
| Visitors Out: 2011 |
| Total Visitors Out: 4365 |
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| Capture Profits Using Bands And Channels |
| 2010-01-19 00:11:00 |
Widely known for their ability to incorporate volatility and capture price action, Bollinger bands have been a favorite staple of traders in the FX market. However, there are other technical options that traders in the currency markets can apply to capture profitable opportunities in swing action. Lesser-known band indicators such as Donchian channels, Keltner channels and STARC bands are all used to isolate such opportunities. Also used in the futures and options markets, these technical indicators have a lot to offer given the vast liquidity and technical nature of the FX forum. Differing in underlying calculations and interpretations, each study is unique because it highlights different components of the price action. Here we explain how Donchian channels, Keltner channels and STARC bands work and how you can use them to your advantage in the FX market.
Donchian Channels
Donchian channels are price channel studies that are available on most charting packages and can be profitab...
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| Channel Breakouts With The CCI |
| 2010-01-08 23:35:00 |
Often in life, the right action is the hardest to take. The same dynamic occurs in trading. For most traders it is extremely difficult to buy tops and sell bottoms because from a very early age we are conditioned to look for value and buy "cheap" while selling "dear". This is why although most traders proclaim their love for trading with the trend, in reality, the majority love to pick tops or bottoms. While these types of "turn" trades can be very profitable, turn trading can sometimes seem like a Sisyphean task as price trends relentlessly in one direction, constantly stopping out the bottom and top pickers.
Most traders are reluctant to buy breakouts for fear of being the last one to the party before prices reverse with a vengeance. So, how can they learn to trade breakouts confidently and successfully? The "do the right thing" setup is designed to deal with just such a predicament. It tells the trader to buy or sell when most ingrained lessons are against doing so...
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| Introducing The Bearish Diamond Formation |
| 2010-01-05 09:03:02 |
For years, market aficionados and forex traders alike have been using simple price patterns not only to forecast profitable trading opportunities but also to explain simple market dynamics. As a result, common formations such as pennants flags and double bottoms and tops are often used in the currency markets, as well as many other trading markets. A less talked about, but equally useful, pattern that occurs in the currency markets is the bearish diamond top formation, commonly known as the diamond top. In this article, we'll explain how forex traders can quickly identify diamond tops in order to capitalize on various opportunities.
The diamond top occurs mostly at the top of considerable uptrends. It effectively signals impending shortfalls and retracements with relative accuracy and ease. Because of the increased liquidity of the currency market, this formation can be easier to identify in the currency market than in its equity-based counterpart, wher...
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| Profiting With Gartley Patterns |
| 2010-01-05 08:48:30 |
Bearish Gartley
Bearish Gartley: A Recent Example
Bullish Gartley
A Recent Example of a Bullish Gartley Pattern
So why does this pattern work so well?
This is purely opinion, but as you look at the pattern construction there are two key elements to the success of this pattern.
Let’s put it in the context of a Bullish Gartley Pattern:
A) You are trading with the overall trend. Note that the move from X to A is a large move up, and that the move against the trend from A to D is counter to that of the XA move, but is contained within XA so the trend up is not broken. In fact, in Elliott Wave world the translation of this pattern is that we have one Impulse wave up from X to A, then three corrective moves to the downside (AB, BC, and CD). The conclusion then from Elliott Wave would be the likelihood for another impulse wave to the upside.
B) Secondly, the reason this pattern is success...
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| Integrated Pitchfork Analysis |
| 2010-01-05 08:47:45 |
In this article we look at preparation, techniques and money management for using integrated pitchfork analysis.
Spotting the Trade Opportunity
The process of low-risk high-probability spotting trades is very systematized for the experienced trader. He/she should visually scan the various choices of the operational time frame charts: 60-min, 30-min, 15-min and less frequently the 5-min chart. Our goal is to detect candidates representing low-risk high-probability trades. Once these opportunities revealed, we will employ different techniques with all the recommended disciplined rigour and patience. One of these is the zoom-and-retest technique, which is applied to a German Dax up-sloping failure.
Finding the Optimal Set-Up
In this trade, we have spotted triple up-sloping failures on 60-min, 30-min and 15-min operational charts (refer to Figures 1, 2 and 3). We have chosen the 60-min chart (refer to Figure 4), as our optimal operational trading time frame, because of the better trend ...
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| How I Identify Powerful Setups Using Symmetry? |
| 2010-01-05 08:47:41 |
I am often asked what I mean by the term "symmetry" in my work. I can attempt to define with words what it means to me in the market but the following charts (visuals) will probably illustrate the concept more accurately. Symmetry is essentially similarity and sometimes equality in the market. Actually, I just used the thesaurus and came up with Balance, Equilibrium and Proportion as synonyms.
Let's start with an example of "symmetry" in both price and time! The first example is on a 15-minute Nasdaq futures chart below. (I had a ball with this one with my subscribers as it started to unfold.) The overall trend on this chart at the time of this "potential trade setup" was bullish. If this trend was going to remain intact, we wanted to consider entering the buy side after a corrective decline terminated. What helps us determine when a corrective decline might terminate? SYMMETRY!
In this particular case, I saw the decline that was playing out in Nasdaq futures approaching the 10...
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| How to trade triangle breakouts |
| 2010-01-05 08:47:29 |
When prices fluctuate in a smaller range over time a triangle formation occurs. Triangle patterns are some of the best trading opportunities in financial markets. Our favorite aspect of triangles is that they usually retrace beyond the standard 61.8% Fibonacci retracement level and hurt traders. By Elliott Wave terms, we also see a “wave E” break of both trendline resistance/support and the 61.8% Fibonacci level.
This does two things. First it hits stops and sees a surge in breakout buying. Second, that mass movement by the market sets up the reversal point in “wave E” which then catches the market wrong footed again. Fun! Identifying triangle patterns usually only comes about near the apex in “wave E” so experienced traders know to be very cautious as whipsaw movement is the standard for these formations. Interestingly, the currency markets currently have two major pairs in long term triangle patterns. Let’s look at each of these.
First is USDJPY which we beli...
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| Surf's Up With Filtered Waves |
| 2009-11-10 20:29:51 |
In 1977, long before investment analysis software made testing strategies a painless process, market researcher Arthur Merrill manually tested the idea of "filtered waves". Several years later, Martin Zweig popularized the concept as a trading model in his 1986 book, "Winning on Wall Street". In this article, we'll introduce you to this simple trading strategy and illustrate why every active trader should consider paddling out to catch these waves.
What are Filtered Waves?
Very few people read Merrill's short book, "Filtered Waves, Basic Theory: A Tool for Stock Market Analysis", when he completed it, but this work clearly demonstrated that legendary trader Jesse Livermore's swing trading methods worked. A Wall Street legend, Livermore had detailed his methods of swing trading late in his trading career and was able to make a complex subject understandable to all.
While Livermore traded on a short time frame, Merrill discovered that with an appropriate filter, this strategy could for...
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| Channeling: Charting A Path To Success |
| 2009-11-10 20:29:07 |
Channel trading is a powerful yet often overlooked form of trading that capitalizes on the tendencies of markets to trend. It combines several forms of technical analysis to provide traders with precise points from which to buy and sell, put stop-loss and take-profit levels, and much more! This article will show you how to create and effectively trade these amazing instruments.
Channel Characteristics
In the context of technical analysis, a channel is defined as the area between two parallel trendlines and is often taken as a measure of a trading range. The upper trendline connects price peaks (highs) or closes, and the lower trendline connects lows or closes. An example of a channel is shown below.Breakout points in channels indicate bullish (on upward trends) or bearish (on downward trends) signals.
Channels are useful for short-to medium-term trading - not long-term trading or investing. The technique often works best on stocks with a medium amount of volatility. Remember, th...
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| Analyzing Chart Patterns: Why Charts? |
| 2009-11-10 20:28:47 |
By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com
Before the advent of computers and data feeds, the use of charts to formulate trading strategies was outside the mainstream of trading techniques. The reason, creating charts was difficult. Each chart had to be created by hand, with chartists adding another data point at the close of trading for each security they were following. Also, chart users were often misrepresented as a bizarre group of individuals huddled in the recesses of the brokerage house as they added the latest data point to their closely coveted charts.
But with the advancement of technology and the increased popularity of technical analysis, the use of charts has greatly increased, making them one of, if not the most important tools used by technical traders.
A single chart has the ability to display a significant amount of information. More conceptually, charts are an illustration of the struggle between buyers and sellers. While this point is d...
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