Dr. Arthur Rassell Lockhart has developed an advanced analysis of the trend. His analysis can be applied to any market-based instruments, and includes Japanese candles, for three-price break, Fibonacci levels, Facing, based on market structure, and target reference points, the calculation of core, full-time and current trading ranges. The next interview will help us a little deeper look at this new analytical method and its application for Forex market.
Eyb Kofnas: One of the biggest challenges facing traders Forex market is a big picture association with intra-day for the purposes of trade. You are using the market model of the structure and then within hours of confirmation of the trend for buying or selling signal. That is right? How do you do?
Rassell Lockhart: If we look at the unmarked schedule, we have no idea what kind of market, what time scale, or what the price scale. Nevertheless, we find all important at this graph - the structure, waves and trends. In this sense, the task of the trader is the same in any market for any temporary structure in any price range. This approach assumes that the structure and dynamics of market behavior are essentially the same in all markets and at all time scales. For this reason, the essence of trade may be easier to recognize formations market structures, identification of the waves, the definition of trade signals the entrance and the design trade purposes. This can be done to completely unmarked graph. Of course, the actual trade, we know the market, as well as time and price magnitude. It appears that the simple task of trade becomes a strange way, quite complex. Complications in large part, comes from the nature of time in the markets. We can, for example, to sell directly to the 30-minute temporary structure. But what are we going to see - this is the result of complex market structures, waves and the behavior of trend at all levels of the scale of time. And since we usually only look at the factional part of time scale, like 30 minutes, we are very blind to the source of the determining factors, suddenly coming from other time periods.
Most traders focus on price, usually paying little attention to the temporal dimension in the time scale of trade and even less on temporal factors in the other temporal scales. Most graphics programs also have this bias in making the general case, at best, a difficult one-the possibility of knowledge of market structure, waves and trends in multiple time scales. Correlation between market structure creates a wave and kickbacks, and the flow of waves, we can see that we are called trends. This is true at all levels, enhance or reduce the transient time. What I want to emphasize is how to use the fractal quality time in the trade. Courrier David and I have developed a "RaloMatic" as the first step in this direction.
Kofnas: What constitutes a "RaloMatic"?
Lockhart: This is a unique software tool for the simultaneous monitoring of trends in multiple structures of the time. It uses a three-price break as a method of tracking the trend, because of its ambiguous definition of trend. In addition to the standard method, I developed three additional methods of price breakthrough, called "promotion" and "fresh start" that serve to make the intra-trade more efficient. At the present time, "RaloMatic" restricted feeding data "RealTick". As an initial intra-sample time periods, we focused on 1 -, 3 -, 5 -, 8 -, 13 - and 30-minute period, in addition to daily and weekly time scales. "RaloMatic" makes it possible to know the status of the trend in these time periods simultaneously. In addition, the state of the trend in numerous temporary structures have led to several new indicators.
A new indicator - "TrendWeight", which is the simplest for the sum of multiple periods of time. As the "TrendWeight" close to the inter-sessional maximum (or minimum), the trader is willing to increasing the probability of a turn. Such a turn would be easily recognizable, usually deploying a trend, first at one minute scale of the data that will allow the trader to fix profit, to bring a stop order or to make a deal to turn. The second new indicator - "BodyWeight". It is a totaled the difference between the size of bovine and Bear phone, where size is the difference between the opening and closing period. For example, when an upward trend may be new records, but the degree of change in "BodyWeight" decreases. It can also be seen in the appearance of candles "dozhi, which typically occurs at the end of the trend. "BodyWeight" also shows how changing various periods of time. We believe that the period of time, which is heavy, ie, has the greatest differential in body weight is most often the most productive period for the trade.
Opportunities "TrendWatch" in "RaloMatic", we can keep track of what time brings the greatest profit. In this way, also, we can find out such important things as: What is the overall time is ideal for trade? Does it in the session, or between days? Is one day better for trade than the other days?Kofnas: You can show us a specific schedule showing the application of technology to your currency pair and the adoption of trade decisions in the kratkosro chnoy of time?
Lockhart: Yes. Figure 1 below shows the 30-minute schedule for EUR / USD. Insert shows the three-price break the trend in all periods from 1 minute to 30-minute period, and shows that all time periods show up for sale. We can see that the trend is clearly down, but it was also apparent movement by the minimum. How can we sell in this situation?
One way is to request a "structured input signal" to the movement in the long or short side in all conditions. However, the 30-minute data, we have only three periods, and will take a few more periods before the market structure, and especially the wave structure razovyutsya. The market can move significantly, while we wait for the structure.
We are able to take advantage of the structure, which develops in a short period of time?
Let's look at the same data presented in the now five-time scale (see chart 2 below). Five-minute data clearly show a downward structures with the existing signal input. The market here could form a clear upward movement of the structure and make up. Therefore, we do not want to stand in a short position only on the basis of the trend. We want to go in a short aside on the basis of clear and certain signal wave structure, which increases the probability of a successful trade. Please note that the market structure provides a reasonable level for the foot, as well as the exact point of entry into the market.
Because "RaloMatic" uses primarily methods Fibonacci spiral of growth for a particular purpose at a price and time, as soon as the wave structure identified, the level of stop-orders, the level of the entrance and the purpose can be designed on the graph as shown in Figure 3 below. The market had fallen soon after descending the structure has been revitalized and has reached the projected target zone after about 35 minutes after entering. This illustrates the use of a short period of time to find a wave structure for trade, while a longer period is still in the process of structure formation.
The transaction on the target level can gain of 55 points for the EUR / USD. Down structure, which is formed on the 30-minute data is likely to bring even greater gains, but the transaction is illustrated above may already be implemented, while the transaction is in the longer term is still evolving. Thus, the trend (based on data from the three-price break), the signal input (according to the 5-minute wave structure) and goals (goals for growth in the first Fibonacci level downward waves) may be the three vital elements of successful commerce.
Kofnas: Trader wants to sell, making the choice that the price of the currency pair will be above or below or within the next hour or two. Starting with your analysis of multi-temporal structure, and within hours of trends and market structures, show us how you came to such a transaction?
Lockhart: When the trend is known, when the wave structure is known, when the input signal for this structure is known, the direction of the design over time has a high chance of success. We can use the data in the figure 3 to see why. In this scheme, the structure has been stepped down at 10:55. This is a time when we would put our position in the short side. But what point is a temporary projection? From "RaloMatic" is calculated based on the characteristic time of descending waves, and becomes known to us as soon as this structure has been completed (at 10:40). The growth of waves over time, based on the Fibonacci series, design goal at 11:30. Therefore, if your system allows opening positions, we place an order to reduce the market for 35 minutes this time. As you can see, the goal has been achieved in this temporary location and the price was slightly lower over the next five minutes. If we open a position in the longer term, we have used to structure a longer period of time. The key to the direction of trade as well as price and temporal definition of the objective remains the same regardless of time or the market. Find the wave structure, set period of time, which will give you the signal input wave structure in the direction of the trend, set your stop-order on the basis of this structure and set its target for cost-effective and time-based growth factor Fibonacci.
Forex Magazine
based on www.futuresmag.com
based on www.futuresmag.com
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