Many traders fantasize about a trading system or a technical indicator that can capture every zig and vices on the market. The idea is very n & # 39; Yana, but, sorry, bad news media, it is simply not the case. Please do not zastrelvaytse messenger!
Despite all the marketing hype all over the Internet, no system, no light can not do everything.
Have you ever tried to adjust the car? Well, if you did, you certainly do not use just one tool. Depending on the machine to do the job, it took a whole bunch of specialized tools. Not only that, you also need to know how to use the tools and when to use them.
Attempting to draw a regular income from any of the market – this is the way to. This will require a lot of specialized tools, and for most traders, technical analysis provides our tool palette.
Since the market may ziggats and die at any time, we need it "Tool Box for trading" a full technical analysis tools.
For example, if in the commercial market is the range, then oscillating indicators It works very well.
However, if the market has the tendency, the oscillator is not worth beans heap. If the market is trending, things such as moving averages, with the & # 39 is one of the "choice of instruments".
Returning to the car analogy … If your car is not running properly, your mechanic pops up on a diagnostic machine that quickly explains what the problem is. Then it's simply a matter of drawing the necessary tools and parts for the situation.
When it comes to trade, the bottom line is that if you can not diagnose the current market, it is likely that you will be ill prepared and lose money.
In this post I'm going to share the strategy, which will help you much better read (diagnosis) on the market. This, in turn, will ensure the proper use of the trading system and technical analysis tools to do the job.
Equipment System Development 1
You need to find the market or time frame that best fit your trading system.
Let's use my program of commercial secrets as a real example. In this program, I want to look at a specific example of a candlestick, stohastyki indicator and a number of formations diagrams. This creates a unique system that helps me capitalize on numerous trading on all markets, including Forex, f & # 39; yuchersy and promotions.
Although I find countless deals with this program, it does not mean that it will work equally well in all situations. Let me explain …
Let's say I want to trade stocks on a daily basis. I can see the 15-minute chart and notice Microsoft not so much a situation where my system is configured. Just going to say, 5, 10 or 30 minutes, I can find some great options. But if Microsoft for any reason, it seems, does not produce a reduced number of transactions for my system, I'll just look for other promotions to get more opportunities.
Let's look at an example in forex trading. Say you have developed a strategy that looks promising. You have a lot of currency pairs to see which ones contain the most options, as dictated by your trading methodology.
Let's look at another example. Say you are a trader's position and use daily schedule. If you do not find a lot of shopping options, all of a sudden you can find a stock of them, looking at the 2-day or weekly schedule. You can even jump down on the four-hour schedule to get another point of view.
Once you have found a few good candidates, you need to go to the …
Technique system of 2
A sufficient number of these commercial settings for your system Only half of the equation.
You will need to trade markets that follow! In other words, as soon as they launch your entry, they begin to move with a lot of speed in the right direction. I can not stress enough, momentum is something that puts money in your account. Without this, you will get a small profit and get beaten in difficult market conditions.
Transactions that have a lot of turns, will show price bars that are basically increases the maximum highs and higher lows. The trend of decreasing, you'll have mostly lower highs and lower lows.
In a strong trend, bars are also prone to closure upper third their range. The strong downward trend they basically closed lower third Bars range.
When viewing my candlesticks I would also like to see the superiority of green candles in the trend and a lot of red candlesticks in the trend.
So to do it all together …
Step 1: First find a suitable time frame in which there is a fairly broad trading options, depending on your strategy
Step 2: Make sure that when you start trading you will see signs of strong momentum and move on
If you do not see signs of strong momentum, then the chances of the market will be bad, and you want to avoid like the plague, so how to make money much more difficult. Loose markets also force you to stop.
By performing the above steps, you will get a small group, "the cream," a stock of goods, currency, etc .. So you will spend the entire energy fully into markets that will give you the greatest chance of success.
And the last thing to note … Markets change, so you need to constantly assess, it is still your favorite stocks, currencies and commodities behave identically. If not, you need to look for the best terms or enters a new market.