Physical Market

The physical laws of the market

Trader is facing some difficulties, building a picture of market movement. While most of us recognized the existence of the conflict and find solutions in the price schedule, we are not able to use a reliable mechanic in the market our trading strategies. Fortunately, the repetitive elements of the graphic pictures offer a powerful hint to understand and manage the vital aspects of the development trend. After repeating the dynamics of crowd behavior, price action tends to follow the classical rules, which modern scientists use to the world.

This is likely not a random coincidence. Emotions and mathematics interact continuously, while they build the Fibonacci levels of recovery that we see every day, analyzing our schedules. These ratios provide a remarkable glimpse into the deep order, behind the normal price movement. It is based, convergence-divergence between the two market forces helps us to understand how to trade on market fluctuations. For example, we can look for schedules that are a model for a turn or break, which provide opportunities, but we are also seeing surges and ticks, to guess the emotional intensity of the crowd, and to predict where it peregorit or change direction.

Successful traders intuitively feel that the bilateral market mechanics as they cope with the art of speculation. Their advanced skills of the specific logic required for combining the functions of left and right hemispheres of the brain focused on the sale of the methodology. Perhaps future technical analysts measure quantitatively these profound interaction between the behavior of the market crowd, and the physical laws of nature, and even open up a new area of technical price forecasting. We, meanwhile, let's explore some basic characteristics of underlying physical nature of markets.

1. Objects in motion tend to stay in motion.

New traders are emerging on the market and with less side have sent the price momentum. At the early stages of new trends, increased mobility, but inertia tends to slow down the extent of price changes. This often creates a series of tests or mini-models of clusters, while the price of trying to avoid the influence of the old range. Ultimately, the impetus to overcome inertia and price movement takes a more vertical look. This freedom of movement actually reduces variability due to reduce friction, and unilateral market takes control of the situation.

New trends are very difficult to stop, even as they gain entrance. As with other objects in motion, trends nourish themselves as they draw fresh energy (of money and emotion on the part). This prompts the price to go well for conventional barriers such as the goals set by outside forces. But no trend can not last forever, or go to infinity. Just like its physical counterpart, opposite the market force will eventually stop or deploy directed price movement.

Simple friction slows the ball roll. Active trends experienced friction in the form of market gravity. Classic trading wisdom says that the rally needs buyers, but that the markets will "fall on their own weight" under certain circumstances. Unfortunately, the dynamics of this well-understood mechanism does not exactly correspond to that in nature. If it was identical, all the markets would fall to zero as soon as the purchase and sale depleted. In fact, retain some market value, assuming that each market has a hidden center of gravity, which will reach a price movement, if all members otoydut aside at the same time. The "central tendency" gently pulls market movement to hidden in the middle of a quiet time, but can act with extraordinary intensity, when the price activity creates a strong imbalance in the extreme market conditions.

Distance from the current price bar prior to this elusive market value measures the level of inefficiency at a time. It also determines the most of opportunities to trade on the movement. The stripes represent Bollindzhera usual tool for measuring the voltage in the hidden spring. But other indicators, which rely on the deviation from the middle, also perform an adequate job. And do not miss the simple graphical model. Certain formations may show the ineffectiveness of the primary through a simple set of price bars. For example, a candle "shooting star" after a strong rally signals monitoring trader on the invisible wall.

Central Supply Trends
Combine candle patterns and extremes Bollindzhera to reveal the hidden friction that will stop or deploy a strong market trend. Notice how "Immunex" crosses the upper band the 19 th of July, but rose within its borders a high candle "shooting star".

2. Each action causes an equal force to resist

Traders at all levels must deal with the wave motion on price charts. They define the basic cycles, which should be consistent policies, otherwise, they risk failure. At its basis, these waves reflect the ongoing battle between the bulls and bears, and the main axis of the range trend. Price is pushing forward to increase the involvement, but then pauses to check the previous boundaries and dispel variability. Price bars are compressed, the volume is reduced considerably and the trend pulls against its initial direction. But once the market returns to stable state, the cycle deystviyaprotivodeystviya suddenly restored, and the variability increases. Fresh impetus has re-awakening to a new trend of price level, or expands it back to its beginning.

But why the markets are not established between the two horizontal extremum, if the trend and counter-trend forces are equal and are directed against each other? The answer lies in how active markets scatter directed force. Each buyer must, ultimately, sell, and each seller must, ultimately, close the short position. This leads to layers of cycles which equality of price action and reaction over time. Traders watch this dynamic process in the trend on the different length schedules for the same market-based instruments. In other words, a separate market could show a strong rally in the afternoon schedule, down the market for 60-minute schedule, and the consolidation of the side for a 5-minute schedule - all at the same time. While this iterative process may seem chaotic, it actually reflects the polarity of the separation of the main counter-action. This three-dimensional axis of the trend range also has an additional benefit: their convergence creates many opportunities for trade on the movement.

Determine the location of these important opportunities through the convergence of a certain imbalance between the action-resistance through several layers of price activity. This logical analysis also supports the opposite attitude, which leads to successful trading on the oscillations. For example, while the crowd sees the possibility of buying when the price rises, due to high participation, swing-trader sees the effect of sellers, increasing in this market due to the entrance of new crowd of buyers. Well-being made, thanks to this type of irrational logic, generated by the recognition of the basic forces of nature in the physical market.

Differences temporary formats
Pricing activity in 3 formats, gives rise to different temporal perspectives on resistance and support, while "Qualcomm" tries to stop the sharp decline. Daily schedule shows turning "hammer" next to the 6-month minimum. 60-minute schedule shows bearish roll with a dangerous GEPom down, while the 5-minute schedule of the proposed short-term traders an excellent opportunity to earn a strong rebound from the round-level - 50.

3. The brightest star burns out faster than that emits a cold and dim light.

We measure the force or weakness of the angle of its trend increase or decrease. Common sense dictates that a steep price bars represent stronger price movement. But as the intensity of price changes directly interacts with the resistance trendline? To answer this question, we can rely on the characteristics of central tendency, discussed above. If each market to strive for basic fair value at each point in time, dynamic movement should reach that price in less time (lower bars) than the slow increase in the same direction. In other words, cool bars trend should burn and finish their movement much more quickly than the slow beverage trend.

Unfortunately, these angles are relative to the observer. Low price distorts movement on the charts with an arithmetic scale. The range of the degree of growth distorts movement on the graphs with a logarithmic scale. Therefore, before we can objectively measure how brightly lit market, our star, we must adopt a common system of price changes. Unfortunately, it is more difficult than it seems at first glance. Various image types and methods of forcing us to apply the measure, which often depend on software or service that we use. The most fruitful analysis adoptiruet common vision for a common database, so that visual comparison of the intensity of the trend was for a soil. Then we can use our eyes and simple standard deviation, to explore the length and stability of price changes.

Use a graphical method for finding the parabola that produce a strong turn. In contrast, swing-trader perspective, vertical price movement is seen as a prelude to correct with the same intensity in the opposite direction. Also, as a supernova signals the inevitable decline of aging stars, parabola said the market that his makeup trend is running out, and possibly the emergence of a strong correction. First, install a fixed percentage of the logarithmic scale between 15% and 20%. Then view the complete database with the steep angles of the short-term price changes. Isolate the markets with the highest price bars and the visible trends in excess of 45 degrees. Then reinstall the logarithmic scale for the market, so that the recent price activity filled the screen. Apply the standard bands Bollindzhera and look for bars that are good for the upper or lower band. Find your level of entry, while reducing down to a larger format and temporarily turning the model to determine the location of a smaller scale that fits well with the broader picture of the graphic.

Trends that are moved by very small angle is also predicting a decline of its own, but for different reasons. This spread should be increasing or decreasing the mechanics wedge models found at many price charts. As traders and investors want to vigorous action. They buy or sell so they can watch the price gradient to new levels. Minor trends will never meet this need for complacency. For example, the observed increase in the price in an upward trend to a new peak over and over again, but never collected enough momentum to accelerate the degree of recovery. Investors will eventually lose interest in this type of price action and deserters from the ship "in search of more exciting trading tool. The market is losing broad support, and finally falls into the abyss.

Raspolozhenie accelerations
An experienced trader finds the most dynamic trends in parabolic and then logs in natural levels of turn. Start by setting a fixed logarithmic scale (eg, 15% in figure A). Quickly browse your database and locate the most vertical price movement, up or down, which you can find. Come back to a more convenient scale schedule (Figure B) and apply three-dimensional graphical analysis method to find the entrance with a small risk.

4. Powerhouse leaves marks in the form of emission or radiation.

This classic principle of physics requires nebolshtgo move financial markets. The real possibility of trade appear to be possible, because they possess the characteristics of an impending directional price movement. This manifests itself in the participation of the crowd, the price action of the known boundaries, creating recurring pricing models, and convergence of technical indicators. Interpret these diverse market signs correctly, and collect consistent profit trading in the oscillations.

Engineers are building machines to explore and exhaust to measure their internal characteristics. For example, a device attached to the exhaust pipe of vehicle, said vehicle on the current internal state of the machine. Traders are building similar measuring tools to assess the internal condition of the market activity. But, just as engineers are developing tools to study a very narrow range of physical data, traders must limit input to specific market characteristics and filter out a lot of market noise, which can negatively affect profits.

Graphic models with correct prognostic power provided evidence that market-based engineers can define and measure. Radiation opportunities occurs through convergence of various elements in the narrow convergence of price and time. Each independent signal taut in this small point of the market increases the chances that trade will install a reliable result.

Reading a graphic picture of
While the projected graphs show the well-organized model for the expected price levels. "AMCC" starts with the Turning Islands (1), who finished a clear 5 wave Elliott (2). Price decreases by a maximum of 48 intermediate and 62% th level of recovery from the previous motion (3). The low concentration (4) is formed under the level of recovery. The bottom line Bollindzhera (5) extends downward, opening the door to drop the price. All signs point to the imminent first failed attempt (6), in which the price will recover 100% or more of the preceding movement trend. Trader measures such evidence, sells in the zone of accumulation, and waiting for models to work out the expected result.

Conclusion
Today's traders have great difficulties in organizing the market movement in the control structure and system performance. Too often, they ignore the important image data, because it does not fit into the convenient system of horizontal price limits. This obsession with finding just interpretable models demonstrates the inability of the trader to understand the more powerful the mechanics of price forecasting. Unfortunately, the concentration on a narrow strategy of performance akin to attempting to play music with one note. It works only when a fleeting moment requires a separate, flat sound.

Expand your knowledge through the application of physical laws of the market. Every aspect enhances your ability to make a profit on the fine aspects of the market crowd. Keep in mind that these natural forces to rely on mechanics, which many traders will have to accept. This allows you to receive important advantage on the road to successful trading. You may need an entire life, to explore these complex interactions between development rates and emotional crowd. But each part of this wonderful mystery adds new levels of opportunity to follow trade developments.

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