2000 will go down in history of financial markets as a year of significant peaks of the bovine market in the stock market of the United States. However, there was another much less visible but no less important event for financial markets, which occurred in spring 2000. The magazine "Business Week" published April 17 article, entitled "The Alchemy can be gold." Article summarized a study of doctor Andrew Lo and his colleagues from the School of Applied Mathematics at the Massachusetts Institute of Technology (MIT). Dr. Lo examined the image model (over 60,000) for over 30 years from 1962 to 1996gg. in an attempt to prove or disprove the secrets of technical analysis of graphic models.
Theory of Law is based on the premise that certain price patterns are repeated on actively traded markets. The results of the study can not be described as nothing other than amazing. Indeed, the classical image model such as "head and shoulders, double tops and bases," "pennants," "flags" and other popular models, not only were quite recognizable, but also has high Predicting the future price movement properties.
This recognition of academic science has been announced in the financial press as the final provision of the technical analysts to equal the playing field with the fundamental analysts. Statistically, the study proved that the study of graphical models can lead to dramatic results in the management of investment portfolios.
Price movements in actively traded markets are chaotic by nature. We can not predict what will be the next price movement - up or down. In doing so, no one can know how much he can do on the transaction (even if it is a profitable business). So, why did not even try to predict price movements? The answer is in the control of risk. Risk - this is the only factor in the equation of income and the risk that a trader can manage. Famous traders learn this lesson early in their trading career. "Take care of their losses and profits will take care of themselves," was the trade council, Amos Barr Hostettera, the founder of Commodity Corporation and mentor of many "market wizards."
In the chaos of market activity appear non-random patterns that are repeated and which can also be recognized. This happens because the markets can do only three things, rise, fall or move sideways. Unfortunately, they sometimes make it all on the same day. However, there are certain patterns that occur almost daily, giving the trader a valuable window of positive probability. Probability is the key word here! Traders are dealing with probabilities - and never with certainty. Only the two professions have to deal with the obvious facts - accountants and mortician.
There are even software tools for the recognition of image models, which automatically calculates the exact ratio of the previous price fluctuations. There are nonrandom model, because all the price fluctuations in the past have had the effect of future price fluctuations. That is why trade at recognizing patterns is predictable and acts as a leading indicator, as opposed to oscillators and moving averages, which are indicators of delay.
Knowledge of relations - this is the first step in recognizing the graphical model. Software tools can help the trader to calculate these ratios. This allows the trader to choose the price fluctuations in any temporal form of ticks and monthly schedules. Trader should then just select the type of trade on the graphical model, which is consistent with his style and strategy. Recognition model - it is just a key, but the decision rests with the trader. "Head and shoulders, pennants and flags, and many other models have these important relationships needed to confirm their consistency. Below is an example of application software tool for calculating the ratio of price fluctuations.
Knowledge of relationships is very useful for trading on the movement. The values inherent in their graphic representations of the past price fluctuations. Each price fluctuations is repeated at some future point in time. Calculate an index allows the trader to see not only the ratio of all variations, but the exact number of points in the oscillation. The knowledge inherent in the harmony of each movement is necessary for the understanding of future price fluctuations. Markets are expanding and converging in the ratios, which are laid down in the Fibonacci series summation.
Using ratios to recognize patterns better to wait a number of models and relationships to form and to complete them, as shown in the examples. This will take some time to understand the significance of this, but this time will be spent not in vain. The schedule for each market instrument has its own model and harmony. Find market-based instruments, which are symmetrical patterns that are easy to understand. This will allow you to explore the recognition of patterns in depth.
Time is the most elusive of all the technical indicators. Tool "Pesavento Map" very successfully arranged the key points in time to turn the trend in the intra-day trade. Based on the principle that markets can only increase, decrease or go sideways, the tool looks for similar patterns that occur past few days, and then determine the trading "card" in the next few trading hours. "Map" is not standing alone trading plan, and should be used with the points of support and resistance, and in accordance with the rules of money management. My personal experience has shown the successful use of "Maps" in the first hour of trade. The first hour of trading the financial press sometimes referred to as "amateur hour". Map has a tendency to give the best signals are input after the first hour of trading. Site may also be useful in the days when a strong trend is developing, which occur in approximately 15% of the time.
Below are two graphics that show the use of this tool. I used this tool for trading on 23 March at the ES. "Map" marked a red line. My goal was a temporary 10:30, and my price target was the level of recovery 0.618, marked by the green line.
The use of a combination of these two tools allows you to best take advantage of these tools. When the map indicates the price spread, and there are several key Fibonacci ratios, there is a perfect opportunity for trade. But this is only the probability, not certainty. Managed Funds and monitoring risk are central to trade. Using these two tools is not any exception, and before you use them when trading with real money, it is first to practice on virtual accounts.
Theory of Law is based on the premise that certain price patterns are repeated on actively traded markets. The results of the study can not be described as nothing other than amazing. Indeed, the classical image model such as "head and shoulders, double tops and bases," "pennants," "flags" and other popular models, not only were quite recognizable, but also has high Predicting the future price movement properties.
This recognition of academic science has been announced in the financial press as the final provision of the technical analysts to equal the playing field with the fundamental analysts. Statistically, the study proved that the study of graphical models can lead to dramatic results in the management of investment portfolios.
Price movements in actively traded markets are chaotic by nature. We can not predict what will be the next price movement - up or down. In doing so, no one can know how much he can do on the transaction (even if it is a profitable business). So, why did not even try to predict price movements? The answer is in the control of risk. Risk - this is the only factor in the equation of income and the risk that a trader can manage. Famous traders learn this lesson early in their trading career. "Take care of their losses and profits will take care of themselves," was the trade council, Amos Barr Hostettera, the founder of Commodity Corporation and mentor of many "market wizards."
In the chaos of market activity appear non-random patterns that are repeated and which can also be recognized. This happens because the markets can do only three things, rise, fall or move sideways. Unfortunately, they sometimes make it all on the same day. However, there are certain patterns that occur almost daily, giving the trader a valuable window of positive probability. Probability is the key word here! Traders are dealing with probabilities - and never with certainty. Only the two professions have to deal with the obvious facts - accountants and mortician.
There are even software tools for the recognition of image models, which automatically calculates the exact ratio of the previous price fluctuations. There are nonrandom model, because all the price fluctuations in the past have had the effect of future price fluctuations. That is why trade at recognizing patterns is predictable and acts as a leading indicator, as opposed to oscillators and moving averages, which are indicators of delay.
Knowledge of relations - this is the first step in recognizing the graphical model. Software tools can help the trader to calculate these ratios. This allows the trader to choose the price fluctuations in any temporal form of ticks and monthly schedules. Trader should then just select the type of trade on the graphical model, which is consistent with his style and strategy. Recognition model - it is just a key, but the decision rests with the trader. "Head and shoulders, pennants and flags, and many other models have these important relationships needed to confirm their consistency. Below is an example of application software tool for calculating the ratio of price fluctuations.
Knowledge of relationships is very useful for trading on the movement. The values inherent in their graphic representations of the past price fluctuations. Each price fluctuations is repeated at some future point in time. Calculate an index allows the trader to see not only the ratio of all variations, but the exact number of points in the oscillation. The knowledge inherent in the harmony of each movement is necessary for the understanding of future price fluctuations. Markets are expanding and converging in the ratios, which are laid down in the Fibonacci series summation.Using ratios to recognize patterns better to wait a number of models and relationships to form and to complete them, as shown in the examples. This will take some time to understand the significance of this, but this time will be spent not in vain. The schedule for each market instrument has its own model and harmony. Find market-based instruments, which are symmetrical patterns that are easy to understand. This will allow you to explore the recognition of patterns in depth.
Time is the most elusive of all the technical indicators. Tool "Pesavento Map" very successfully arranged the key points in time to turn the trend in the intra-day trade. Based on the principle that markets can only increase, decrease or go sideways, the tool looks for similar patterns that occur past few days, and then determine the trading "card" in the next few trading hours. "Map" is not standing alone trading plan, and should be used with the points of support and resistance, and in accordance with the rules of money management. My personal experience has shown the successful use of "Maps" in the first hour of trade. The first hour of trading the financial press sometimes referred to as "amateur hour". Map has a tendency to give the best signals are input after the first hour of trading. Site may also be useful in the days when a strong trend is developing, which occur in approximately 15% of the time.Below are two graphics that show the use of this tool. I used this tool for trading on 23 March at the ES. "Map" marked a red line. My goal was a temporary 10:30, and my price target was the level of recovery 0.618, marked by the green line.
The use of a combination of these two tools allows you to best take advantage of these tools. When the map indicates the price spread, and there are several key Fibonacci ratios, there is a perfect opportunity for trade. But this is only the probability, not certainty. Managed Funds and monitoring risk are central to trade. Using these two tools is not any exception, and before you use them when trading with real money, it is first to practice on virtual accounts.www.ensignsoftware.com
No comments:
Post a Comment