Calling Lot of Technical Indicators

System of "mutual bail

Knowledge of the entire system always comes through the knowledge of some small parts of it, missing some small detail and not destined to understand the system as a whole, and just have a system always works.

As you know, you can sell a variety of ways. Using various methods of trade, it is possible to obtain a given market. You can totally reject the technical analysis and governed only by purely fundamental, you can invest in the market from 50% deposit, choosing a smaller shoulder-commerce, and 2%. All depends on the trader and how to trade. Each of these methods may be unique and profitable, and everyone knows how to use them and what kind of signal is said about buying or selling at the right time.

When the market is always necessary to choose the most appropriate and expedient method of analysis and apply it to the last, after this analysis was fully tested and showed good results. In our series of scientific articles, we set a goal to teach you to analyze the market through the methods of entry, as well as a successful step in the trade is considered a time of entry. In our scientific article, we would like to teach you how to analyze the trade through technical indicators, how to perform the analysis in changing their performance. As it should react and make decisions.

As we know, there are several types of indicators. All these types are divided into groups: leading indicators and the retarded. Allocate a list of all the indicators and to share them to their destination, we will not. We give only a list of frequently used indicators, the time-tested and will show how to learn to properly analyze and prepare their trading systems at work in the market. So, as we said, there are retarded, then there are excellent indicators of operating at relatively long price trends. They do not warn about the upcoming changes in prices, but simply report the direction of their motion (ie, rising or falling), directing you to the appropriate action. Buying and selling signals for indicators, following the trend, you lishite a possible early entry into the market, but significantly reduce the risk, so as always to play in the direction of the prevailing trend. As a rule, of which emit moving averages and MACD. See Figure 1:

Figure 1, delayed indicators MACD, Moving Average, four schedule EURUSD.

Of leading indicators, are used for predicting future price changes. Of leading indicators will give a greater advantage at the expense of greater risk. The best way they work to calm markets, where there is no pronounced trend. Usually leading indicators used to measure "perekuplennosti" or "pereprodannosti market. It is believed that the pereprodannosti is a signal coming price increases. Such indicators could include RSI, refer to Figure 2:

Figure 2, leading indicator of RSI, a daily schedule of EURUSD.

There is another category of indicators Oscillators, in particular, would like to draw your attention to the Stochastic Oscillator. Stochastic Oscillator compares the current closing price with the price range for the selected period of time. See Figure 3:

Figure 3, Stochastic Oscillator, a daily schedule of EURUSD.

Figure 3 provides a Stochastic Oscillator, one of the most interesting indicators, which can be described as follows:

Stochastic Oscillator
Stochastic oscillator is represented by two lines. The main line is called% K. The second line -% D - is moving average of% K. Line % K is usually portrayed by a continuous line, and% D - dashed.

On the above figures are indicators, in which we wish to present their new theory of "mutual bail. The name of this theory, coined not by chance, as each of the indicators as entrusted to another, and a set of signals shows that it is at this point and need to enter the market, minimizing the dangerous ways of entering.

Here Figure 4:

Figure 4, the combination of indicators, the theory of "mutual bail, schedule EURUSD, daily time interval.

In order to make decisions on market entry or exit turn to schedule 4, according to the sequence of indicators in the chart will give the narrative interpretation of each of the indicators.

Moving average value - one of the oldest and most popular tools of technical analysis. Moving average of value - is the average price of an instrument for a certain period. The period for calculating the moving average is selected at the discretion of analytics. In calculating the "simple" moving average price of an instrument for the last "paragraph" periods first summed and then divided into "Point." Thus, the closing prices over the past 25 days and divide the sum by 25, we get an average price of a tool for those 25 days. Similar calculations are made separately for each period in the chart. It is important to note that the calculation of moving average is only possible if all data for the "P." periods. That is, 25 day moving average, you can begin only after the graph can see prices 25go day. Traditionally moving average is used to monitor changes in prices. Typically, investors buy securities if the price rises above the moving average and sell when it falls below it.

MASD indicator is calculated as the difference between 12 and 26 day moving averages of the price instrument. This can be above or below zero. If MASD above zero - means that 12 day moving average of more than 26 days. This is a bullish signal, indicating that current expectations (ie, 12 day moving average) are more pronounced bullish in nature, compared to previous expectations (ie, 26 day moving averages). This suggests bull lines shift in demand / supply. If MASD falls below zero - mean 12 day moving average of yields on 26 day, and happened Medvezhye shift lines supply / demand.
The curve is usually an indicator MACD smoothed using 9 day moving average of the indicator MACD (not prices). This line is called "signaling." She anticipates the convergence of two moving averages (ie, movement to the MACD zero line). What is the logic of this tool? Indicator MACD - is the difference between two moving averages of prices. If the short moving average exceeds the long (ie the MACD rises above zero) - then the expectations of investors become bullish in nature (ie, the line supply / demand shifted upwards). Additional use of 9 day moving average MACD would more accurately determine the time of such change in the expectations of investors (ie, bias lines supply / demand).

Relatiye Strength Index (Relative Strength Index) RSI is an indicator of price and pace of change is calculated as follows:

RSI = 100 - (100 / 1 + RS), where the RS-related EMA (n) increase in prices for EMA (n) falling prices. All possible values of the indicator is in the range from 0 to 100%. When building the set on the schedule set by 2 levels (30% and 70%) that their interpretation of the RSI line perekuplennosti / pereprodannosti market. However, for best results, many use levels of 20% and 80%. RSI always gives advance or instant messages, but never late.

There are several ways to interpret a stochastic oscillator, of which we will consider the three most common

1. Buy when the oscillator (% K or% D) first falls below a certain level (usually 20), and then rises above it. Sell when the oscillator is initially rises above a certain level (usually 80), and then falls below it.

2. Buy when% K line rises above the% D. Sell when% K line falls below the% D.

3. Look for divergences. For example: the prices are a series of new highs and the stochastic oscillator can not rise above their previous highs.

On the above figures are indicators, in which we wish to present their new theory of "mutual bail. Pay attention to Figure 5:

Figure 5, the theory of "mutual bail"

According to Figure 5 will try to interpret visually and theoretically developed our theory for market entry and subsequent withdrawal of profits:

1. During the movement of prices occupy wait until you find zahozhdenie RSI and Stochastic indicators in the area perekuplennosti or pereprodannosti.

2. After this time it was, move the view of the indicator is MACD, presumably to understand when it will be counter-trend, as the only indicator MACD prosignalit this indicator go to the Moving Average.

3. LED Moving Average to determine the good point to enter the market. When crossing the Moving Average indicator of candles can enter the market, exposing a stop at the level of the shadow of the previous candle.

4. Withdrawal from the market is carried out by the signal perekuplennosti or pereprodannosti on RSI and Stochastic.

When using our system, the main challenge is not to overdo, and each time interval is desirable to choose the most advantageous parameters for each indicator, pre-experiment with them. And do not forget about the foot.

A good trend you!

President Alexander M. Mazurkevich
AlMaz Hedge Fund Management