On the other side of the entrance

Joe DiNapoli, president of the company "Coast Investment Software, Inc." Expertise: Although his methods can be applied in all time scales and in all liquid markets, Joe is most preferred inside - the daily trading on the stock market indices. He began to sell, since the index was introduced S & P in 1982.

Joe DiNapoli - trading veteran with more than 30 years of market experience. He is also a strong researcher, an internationally recognized lecturer and a well-known author.

His formal education is linked with the electrical engineering and economics. His informal education was in the bunker, the so-called trade locations, fully equipped with electronics and communications equipment, where the majority of early studies, Joe.

Exhaustive research Joe displaced moving averages, creating their own "predicted oscillator, in particular, his practical and unique method of applying Fibonacci ratios to the price axis, makes him today one of the most eminent experts.

Joe has taught his techniques in the major financial capitals of Europe and Asia, as well as in the United States. Only in 1996. Joe DiNapoli taught his techniques to students in more than 23 financial centers around the globe. His articles have appeared in various publications on technical analysis in various countries around the world.

He was co-authored the book "The tops of trade in futures, the lessons of the masters in 1990, which recognized the Book of the Year. His most significant work to date is the book "Trading with DiNapoli levels, which has become the standard for students of Fibonacci trading techniques.

When Chuck Lebeo ( "Technical Traders Bulletin") asked its readers the names of successful traders they most wanted to be interviewed, Joe DiNapoli name sounds most often. Similarly, the "Atlanta Constitution" cited the work of Joe, referring to the "magic power" of Fibonacci ratios in the market. Joe has used this magic time and again on national television to make exciting and surprising accurate market forecasts, particularly for stock market indexes and interest rate futures.

As president of the company "Coast Investment Software Inc.", Located in Sarasota, Florida, Joe continues to develop "high" trading methods, using combinations of leading and lagging indicators of unique and innovative ways. He conducts a limited number of private tutorials each year at his trading room and he also makes his trading methods available to others via software and training materials on trade.

The methodology that we are going to present, is designed to appeal to the entrance to the market with an extremely safe and minimal risk. I am sure that the money in the trade should be made after proper entry. If you go right, then your position is not likely to be closed to stop the order before they start to grow, as you intended. If you enter the market in the right direction, but for the wrong price, then your position can be closed before the market goes your way.

To prepare the ground for the application of this non-traditional trade strategy, it is necessary to make some assumptions about how markets behave. If you do not agree with the assumptions, the methodology would be meaningless, and you should not use it. Also, would like to see any trader who attempts to use these strategies have been at least a year of active trading experience. The three-year period, even more preferable. You should also have good knowledge of traditional use of indicators Stochastics and MACD.

The reason for this could give an example of how the legendary Jack Benny plays the violin. He could play the violin for non-traditional, to obtain such results, which he wanted because he knew very well how to play the violin in traditional way.

The assumptions with which we begin:
1. Markets do not often rampant trends.

2. Markets include a series of measurable actions and reactions.

3. Buying or selling at the breached is quite a dangerous way to trade.

4. Buying a drop in the upward trend and sell on rises in the descending trend is much safer way to trade.

5. Using the predefined goals of profit guarantees a high percentage of winning deals.

If you agree with the assumptions 1 and 2, you can see how obvious assumptions 3, 4 and 5.

Rules regarding the use of indicators DiNapoli Preferred Stochastics and MACD DiNapoli will be the following:

1. I'm using DiNapoli Preferred Stochastics and MACD DiNapoli only as a defining trend of instruments. I do not use them as oscillators perekuplennosti / pereprodannosti or momentum indicators. For this purpose, can be used much more effectively Detrendovy oscillator DiNapoli.

2. Alert ascending trend in any indicator served fast (blue) line across a slow (black) line from the bottom up. Alarm sales served fast line crossing the slow line from top to bottom. Situation lines on the scale of the indicator is not important, but the angle of intersection plays a major role. The more acute angle will be and what it will be closer to 90 degrees, the better to determine the quality of following this trend. (see Figure 1)

3. Some software packages are in the presence of the above indicators (such as proposed by eSignal). In others, they can be programmed independently. This should be especially careful in order to achieve the required accuracy.

The idea behind this pair of indicators is quite straightforward. DiNapoli MACD is a strong indicator to determine trend, and DiNapoli Preferred Stochastics deliberately weakened determining counter-trend movement. As an example, let's take down the trend, some using MACD, as shown in Figure 1. The blue line does not cross the black line. In addition, we have the upward movement, as defined Stochastics. This upward movement occurs in the downward trend. Movement limited DiNapoli (Fibonacci level of recovery), where we can sell, because the MACD supports top-down trend.

In practice, the DiNapoli Preferred Stochastics of great assistance in determining what level of restoration selected in the implementation of the entrance. You can see that, even if the DiNapoli MACD fast line has crossed a little slow line, the angle of intersection would not have been close to 90 degrees. While the level of recovery keeps the market, you can hold the position. If the restoration of broken down but the trend remains intact, you can still hold the position!

Figure 2 is an example of "Intel corp.". Time scale on the graph - 30 minutes, although the strategy will work for all commonly used time scale. The method may also be applicable to all liquid markets, including the stock market, futures, Forex, etc.

Figure 2 shows two reduction of opportunities for shopping. They were represented by traditional signals "sale" on preference Stochastics DiNapoli, while the rising trend in the DiNapoli MACD remained intact.

Figure 3 represents a 5-minute e-mini. As signals are buying or selling signals show use the same methodology. Investigation of the effectiveness of this approach in the past may be unreliable, because the indicators of modernization in real time, and what you see on the historical graph, is the last indicator, calculated on the closing of the bar, rather than for each segment of the bar, as it is constructed with Each tikom. Point A, for example, is preferable to Stochastics DiNapoli filed signal "shopping" in real time.

The strategy becomes even more effective when the time periods overlap markets - those in which the main movement and those which arise only minor restoration.

You could, for example, to sell at all, "traditional buy signals" on the 5-minute Stochastics DiNapoli Preferably, when the half-DiNapoli MACD points down on the sale. Possible combinations almost endless, which is another advantage of the methodology. You will not do the same, which makes another trader using the methodology, if only he did not choose exactly the same time periods, and reversals in which you operate. Your stop-order and will not be grouped because the stop-order is established in the light of more distant recovery, or if the DiNapoli MACD in the chosen time scale goes against you. Of course, this assumes that you can manage this risk in accordance with the parameters of money management.

After you put your transaction, you then have to select the appropriate logical target for revenue determined in accordance with the analysis of the expansion.

Getting profit with the "safe" interaction with the markets, as appropriate, using the reaction in the trend is the fact that directed at the methodology.

Forex Magazine
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