Trading tactics, systems, strategies - summarizing

[Андрей Сырбу]

After having analyzed the market, trader needs to know will it work on the rise or fall. In addition, by this time he must decide what part of his capital to invest in the deal. And finally, the last step is actually buying or selling the contract. That's the hardest part of the whole process of trading on margin markets where the definition of the specific time of opening and closing positions must be as accurate as possible. The final decision about how and where to enter the market should be based on a combination of technical factors, money management and the type of exchange order. Process of determining the time of market entry and exit based on technical analysis is very short-term nature of this analysis and is defined days, hours and even minutes, not weeks and months. But in all cases use the same technical tools. Further, we consider the most General terms such an analysis.

 

[Андрей Сырбу]

1. The tactics of breakouts.



There are three variations of the trader's action at price breaks:



* to take a position in advance, anticipating a breakthrough

* open position at the time of breaking

* to wait for the inevitable pullback after the breakout



There are arguments for and against each of the three approaches, sometimes a combined approach is used. When you work with several lots, a trader can open one position on each of the three stages. You can take a small position before the anticipated breakthrough, and then buy more immediately after the break and finally open up additional positions during a slight fall in prices during the correction following the breakout. If one trades with small positions, his decision will primarily affect two considerations: by what means he is willing to risk on this trade; how aggressively he will act.



The most conservative trader in this situation will open a long position on the pullback. But, paradoxically, the tactics of waiting can also be risky - in the sense that while waiting for a rollback, one can miss the moment of entry into the market.



2. The intersection of the trend lines.



This allows the signal to enter the market or exit it soon enough, especially when there is a significant intersection, repeatedly "proven" trend line. Of course, this is not to forget about other technical factors.



In the case of using the trend line as the level of support and resistance long positions are taken when prices fall to the level of a steady upward trend line and short when lifting to the level of the downward trend line.



3. The use levels of support and resistance



Break of the resistance level may serve as a signal for opening long positions, which can later be protected using a stop order. It can be placed below the nearest support level or, for greater security, directly below the breakout level, which will now function as support.



The rise in prices to the level of resistance in a downward trend and fall to the support level in an upward trend can be used to open new positions and adding lots to existing profitable positions. When choosing a protective stop levels should first pay attention to the levels of support or resistance.



4. The use of price adjustment.



On the upside, the intermediate price falls that make percentages of the previous growth by Fibonacci can be used to open new or additional long positions. It should be noted that in this case, the analysis of percentages of the length correction refers to a very short period of market movement.



An opportune moment for opening long positions is a 38 percent retracement in prices, occurring after the bullish breakout on the upside. It is highly advisable to open short positions when in a downward trend the prices jump up covering 38% to 62% of the distance of the previous fall.



5. The use of spaces.



Price gaps formed on bar charts can also be used to select the optimal point of opening or closing positions. For example, the gaps generated in the process of rising prices, frequently become support levels. Therefore, when a rising trend, it is reasonable to open long positions when prices fall to the upper border of the gap or a bit below it. A stop order can be placed under the gap. On downtrend, a short position opened when prices reach the lower border of the gap or even partially fill it. The protective stop order in this case is placed above the gap.



Source: forextales.ru

 

[Андрей Сырбу]

Averaging.



Averaging is the strategy when you make a mistake, or just made any transaction (the first that came to mind), and the price went against you, and you produce the same type of operation at a better price already. The main disadvantage of averaging is the fact that you don't know in advance what the price will go against the market. But averaging requires each time (after the first) to invest twice the previous amount of collateral. But if you have a lot of money - you can afford the price movement of 100, 200 or more pips. Although such shifts in the market occur infrequently, but it is not the best strategy, especially if you have made a mistake with the direction.



Possible strategies:



1. The first strategy is long-term maintenance of open positions (from several days to several months). This strategy is used by strategic investors and semi-professional speculators. The most effective on arising trends and the least profitable at the side or slow trends. Requires mandatory insurance and the corresponding work on the futures options market. When working on long positions is no less important than technical analysis is fundamental analysis. The share of long positions in the trader's practical work should not exceed 15% of the amount of collateral. Analysis for opening long positions will help you in a shorter game, namely:

* determine long-term levels of support and resistance

* strong long trend will warn you when you work against it on short positions

* you will gain self-confidence when playing with a short position in the long trend direction

2. The second strategy is to work on medium-term trends lasting up to several days. Also desirable backup options. Most attractive to non-professionals. Average positions are more stable for profit, although the analysis when making decisions for this game is slightly more complicated. The quality of work also depends on the ability to play a short game (to choose the right time to open and close a position). When you open a secondary position is not only technical analysis, but also carefully seen is whether any news of a fundamental nature to the time of closing the position whether the closure of any regional market at this time. The psychological factor of the game goes by the wayside. With all the external stability, be sure to follow the market, he is able to bring any surprises at the wrong time. If you lead a medium term play based on fundamentals, you should also make sure that technical analysis, at least don't contradict your positions.

3. The third strategy consists in opening short-term positions lasting from several minutes to several hours. Used by professionals. Pros: there is no risk of adverse fundamental news and price changes at the time of your absence. Cons: large costs (commissions, spread, communication services, etc.), greater risk of adverse short-term price changes, requires constant monitoring, concentration and voltage for the entire working day. Main assistant at work will oscillator technical analysis methods (use rules for the choice of opening). Don't be fooled by the small gain obtained in this work. You risk to lose all that for a long time and a large number of transactions made.





Source: forextales.ru

 

[Андрей Сырбу]

Strategies and Forex trading systems



Know the difference between a successful trader from the unsuccessful? Successful strictly adheres to the trading plan and avoid impulsive trades. Unsuccessful on the contrary, acts of impulse and chaotic. Typically, these would-be traders there is no clear trading strategy.



Good traders never in a hurry with the transactions, and waiting for the appropriate conditions.



Proceed based on strategy, not speculation.



The main task of profitable trading is to find the optimal strategy and strict adherence to a specific trading plan.



Having a profitable trading system, you will be more peaceful trade. Also, having a plan, you will trade less impulsive.



Many believe that owning a good strategy is a key success factor. And these are not empty words, indeed many of the traders who have long been engaged in trade and studied fairly well both technical and fundamental analysis will confirm it.



Many sleepless nights "scratching their heads" about creating your own strategy, however, should not try to reinvent the wheel, save your time, because it is already done before you.



If you do not follow your trading strategy, then you don't have one.

For successful trading it is necessary at the beginning to decide which set of rules you use, in other words, what strategy or tactics you choose for yourself.

Any business, including work on the exchange, becomes successful only when pre-selected a certain strategy and tactics. Correctly chosen model of behavior is the key to success.



Strategies include both trading techniques and methods of capital management. If you haven't already developed your strategy, you can use ready-made and you will save your time!



Remember that any strategy or trading system is just a tool and on how skillfully you will learn how to use them, will depend on your well-being in the future.



Strategy - strictly ordered set of rules for trade, following which achieved success and prosperity.



System trading is the only way to properly manage your work on the exchange. Effective trade without the use of any system or strategy is absolutely impossible. Of course, each person may accidentally make one or two profitable trades, but stable profit for such trader is more dream than reality.



The correctly chosen strategy - the success of your work.



You know the situation when:



* You are not confident in your strategy, it will bring profit or loss;

* You are not sure, you should make a deal now or should wait for a while;

* You find it difficult to determine which indicator to believe;

* You spend sleepless nights, trying to find any patterns in the market;

* You earn several times slowly, and then carry a huge loss, absorbing all the previous profit and the whole Deposit.



The main thing is not so much the successful forecast of how many choosing the right strategy. The forecast is, ultimately, still a probabilistic process. In order to accomplish all this requires strict adherence to a chosen trading strategy, samodisciplina, exposure.



All professional traders know that only an effective trading strategies, along with competent management of capital, can afford to consistently get a profit on the exchange. This is obvious because only a good trading system explains what and when should be done in any market situation.



Human nature is such that under the action of the emotions it inevitably takes a wrong decision on the speculative arena, instead of closing profitable positions, it additionally gives purchase requisition to the broker at the moment when the trend has weakened.



Trading system - in fact, the only way to minimize emotional tension, inevitably destroying every trader.



You have to adhere to strict trading strategy. The strategy should be well tested as long as it does not demonstrate the desired and lasting positive result.



When traders use trading system they save time and effort when taking the necessary trading decisions, they know what actions will protect their money from excessive risk, and what actions are needed to increase trading profits.



When there is no strategy, the trader earns a little a few times, and then bear a huge loss, absorbing all the previous profit and the whole Deposit.



And then the trader has a lot of questions, such as:



* How to avoid, usually leading to the loss, the emotional impact of the market on a player?

* How to cut off false signals?

* How to save time and effort when making trading decisions?

* The impact of today's news in the market?

* How much time is necessary to develop a profitable system?

* Where to get ready profitable trading strategy?

* What actions will protect my money from unwanted risks?

* What steps are needed to increase trading profits?

* How to avoid the psychological burden?

* What strategy does the minimum drawdown of Deposit?



Suitable strategy will save you from having to sit constantly at the monitor screen, you will only need to wait for her signal.



Source: fxmag.ru

 

[leonsio]

Combine and win! Testing a consensus approach




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Does technical analysis in reality? Recent studies show that combining different approaches is more profitable than trading the same methodology.



Many traders believe that it is impossible to rely on one rule when making trading decisions. However, the use of a large number of trading rules can lead to the fact that we will get a lot of conflicting signals. For example, on the same day 2% nd filter can give a buy signal, while a moving average with period 10/20 can give a signal to sell. One possible solution to this problem is to combine individual trading signals, when they form a consensus in one direction. This article is based on recent academic research, which describes the Approach of combining signals of the Combined Signal Approach (CSA) to technical analysis. The strategy of the CSA is weighing two or more trade rules and calculate a combined signal, which should be more effective than the sum of its parts. The power of numbers.



In a combined approach, you buy in the market when trading signals give us the consensus on buying, you sell, when trading signals give us the consensus is for sale. The combination of different trading signals reduces the risk of use the same trading rules in a given period of time. For example, you can use the five rules: the intersection of two MA, the rule is the percentage of the filter, convergence/divergence moving average (MACD), and Bollinger bands, and on their basis to develop a combined signal that generates a long signal when three of the five rules be bullish. You can also use a more rigorous version of the system that require that four of the five rules pointed to the need for opening a long position.



The combined approach gives us the opportunity to make profitable trades even when individual Forex trading signals are profitable. The purpose of the strategy CSA – synthesizing individual rules into a more powerful whole. It is likely that a combined signal would work better, since information regarding future price movements, rastavatsya among different rules.



The mechanics of the trading model CSA.



There have been two empirical test in order to compare the profitability of the approach of the combined signals and separate trading rules. To determine profitability we compare these tests with the profit, gained while working on the system of long-term investment of buy-and-hold adjusted value of transactions (spreads on buy and sell and commissions).



In the first test used 12 of the trading rules of the four categories: crossing MA, price filters, breakouts of trading ranges and breakouts Bollinger Bands.



The strategy opened a long position when "X" or more from 12 trading rules pointed to the need for opening a long position, the output is true when the same number of rules generated a sell signal.



We tested the system using a consensus of seven and eight of trading signals, representing more than 50% of the rules.



Individual trading rules



1) the Intersection of MA with the period of 50 days

- Open a long position at the opening the next day if the price closed above the 50-day MA.

- Closed a long position at the opening the next day if the price closed below the 50-day MA

2) the Intersection of MA with a period of 200 days.

- Open a long position at the opening the next day if the price closed above the 200-day MA.

- Closed a long position at the opening the next day if the price closed below the 200-day MA.

3) the Intersection of MA with periods of 5 and 150 days.

- Open a long position at the opening of the next day, if the MA with a period of 5 days crossed up MA with a period of 150 days.

- Closed a long position at the opening of the next day, if the MA with a period of 5 days, was closed under the MA with a period of 150 days.

4). Bollinger band (20 day, two standard deviations).

- Open a long position at the opening of the next day if the price closes above the upper Bollinger Band.

- Closed a long position at the opening the next day if closes below the lower Bollinger Band.

5). Bollinger bands: the same rules as in clause 4, and change only parameters: 20 days, one standard deviation.

6). Bollinger bands: the same rules as in clause 4, and change only parameters: 30 days, two times the standard deviation.

7). Filter 1%.

- Open a long position at the opening the next day if the price increased by 1%, not breaking down the level of yesterday's closing.

- Come out when you open the next day if the price decreased by 1%, not breaking up the yesterday's closing level.

8) Filter 2%. The same rules as in step 7, but use the price movement of 2%.

9) Filter 5%. The same rules as in step 7, but use the price movement of 5 per cent.

10). Breakout 50-day trading range.

- Open a long position at the opening of the next day if the price breaks the highest high of the last 50 days.

- Closed a long position at the opening of the next day, if the price breaks the lowest low for the last 50 days.

11) Breakdown of the 150-day trading range. The same rules as in clause 10, however, use a maximum and a minimum for 150 days.

12) Breakdown of the 200-day trading range. The same rules as in clause 10, however, we use the maximum and minimum of 200 days.

© CAMILLO LENTO, ACTIVE TRADER

 

[Dionisa]

creating a TRADING SYSTEM.

in order to create your own trading system, check trade signals used on the profitability, loss-making.

Shopping shyly, which often make a profit make your trading system signals which often bring loss

eliminate! Use only those signals in which you are confident.

The trading system must:

· use simple and clear trading idea;

· build on the principle of sequential resolution of uncertainty;

· to be universal, i.e. to work in all types of trends (bullish, bearish or side);

· with a high probability to signal the beginning of a new trend and the end of the old, strictly implement the underlying trading idea;

· average yield profitable positions should substantially exceed the yield loss.

Building trading systems is carried out in the following sequence:

1. Choosing an idea( e.g., buy on a trend line PODDERZHKI);

2. Defines how to filter false signals (e.g., proof of purchase indicators);

3. Testing of the system by identifying the points of opening and closing positions;

4. Calculated profits and losses taking into account the initial capital, commissions, availability of stop-loss, etc.;

5. Graph of yields plotted on a graph of signals of purchase and sale;

6. The analysis and optimization of the results, changes in the trade idea;

7. Return to step 3 until satisfactory results were achieved either the trade idea would not be rejected.

 

[Dionisa]

And a few General principles and rules for managing capital:

1. The total amount of invested funds shall not exceed 50% of total equity.

2. The total amount of funds invested in one market, may not exceed 10% - 15% of total equity.

In this case, the trader safe from excessive investment of funds in one transaction, which can lead to ruin.

3. The risk norm for each market in which the trader invests his funds, should not exceed 5% of the total amount of its capital.



Markets included in one group, move more or less the same.

When working in the FOREX market there are four basic market in which the behavior of exchange rates is quite similar: the dollar zone, sterling zone, Jenova area and the Eurozone.

5. Determination of the degree of portfolio diversification.

Diversification is one way to protect capital, but diversity also needs to be the measure. Always needed a reasonable compromise between diversification and concentration. More or less reliable distribution of funds can be achieved, opening position at the same time in four-six markets of different groups - no more. The larger the negative correlation, existing between markets, the higher diversification of the invested funds.

6. Determination of the level of stop-loss orders.

7. The ratio of possible profits and losses. Normal is the rate of profit to losses of 3:1 if noma gains below 2:1 from the making of sdelki better unsubscribe.

Building a trading strategy , remember the following rules:

- Do not forget about the principles of effective money management.

- Bargain in the direction of the intermediate trend.

- On the upside - buy on short-term falling of the prices, at descending sell on short-term oulanyah.

Keep profitable positions as long as possible.

- Time to close unprofitable positions, then profitable.

- Use stop orders to limit potential losses.

- Adding positions adhere to the following principles:

a) the number of positions at each subsequent level should be less than the previous one.

b) add only to profitable positions.

- Analyzing the situation go from long to short-term graphics.

 

[Яков]

Unable to take any position according to the technique,the main thing-a proper money management...

 

[Александр Янчак]

Not important, and important.

 

[volnorezz]

It is important all of the above, but the most important in my opinion is the psychological aspect. Personality and way of thinking to be exact. You can not follow the classic rules of trading makes of the market and to be able to make it

 

[торгаш]

in my opinion the most important is discipline, then hard rules that a trader nivkoem case not supposed to break,and then should be set the purpose and time frame for its achievement, under this purpose and need to create a trading plan and only then to find the trading system which would match the criteria of your character and psychology. I think that's how we should treat the construction of its activity on the Forex.

 

[infovirus]

Personally, I practice understand that a trading plan should be included not just one vehicle. Ie, funds must be diversified. If You trade in one vehicle, then You risk all of Your capital. In my strategy there's two TS, one aggressive, aimed at obtaining in excess of the income, and the second conservative aimed at preservation and growth of capital, the period of this CU W1. Also has a 6-th accounts, in order for DTS to achieve my goal I had not reduced leverage, etc.

 

[drummers]

Infovirus you keep all accounts in one dealing center or a few? And which of the 6 accounts you are working aggressive? Or all accounts combined trade for 2 TS at the same time?

 

[infovirus]

One account is the aggressive trading, and other 6-th of accounts used for accumulation of capital. Them being trade for another vehicle-based swaps. The yields are small, but notoriously low-risk. So for my plan it is good enough. The word aggressive assume a yield of 100% per month. Now testing another improvement in my vehicle I want here from July to start on the real world.

 

[ediq]

I have 5 terminals 3 accounts 1 main and 2 on the left. New something never on the real test not even cents. Sometimes what it takes for your vehicle and completely a stranger never trust