Today there are many trading software that promises you a hand in making money with the currency market. A simple search on Google for very many results. This raises a very pertinent question: which method is more efficient to analyze and to trading on the markets, the human mind or computer software?
We’re going to see in this and subsequent articles about the advantages and disadvantages of the human mind and the use of trading programs.
First you need to talk about price. The markets were created by humans. In particular, they were created from the conviction that human beings act on the same markets at the time, internally, they believe that the price of a particular title or of a given currency pair is too high, too low or just right is .
Continue reading Forex Human Mind VS. Computer
We continue to talk about the MACD as a trading indicator most used by far, and its signal line. Earlier we said that the MACD is the most abundant 26, 12, 9. L ‘EMA at 26 and 12 times was used, the same we did with the EMA to 12 periods. Remains out of our considerations to the 9 EMA periods, then our signal line.
As we now know, if the moving average in the short and medium term is above the long-term moving average, this indicates a positive trend, as demonstrated recently that prices are rising, and the average short-term is more longer than in the past. But how do we find the momentum of an uptrend? We can do this by comparing if the difference between the average of today and of our reporting period is greater than that normal.
Continue reading MACD, how can you tell if you have to go long or short
Yesterday we introduced the speech to be able to make more money using the currency market, more than one timeframe for the graphs. It ‘s a very achievable using moving averages. For example, use the SMA to 10:21 period, in addition to the SMA at 50, is very useful. Specifically, when on a graph the first two values are above the value of the 50 SMA, you should buy, or go long. On the contrary, if the lines of 10 and 21 SMA are below the 50 SMA, you can go short or sell.
Continue reading Improving earning potential by using more timing – part 3
To understand the importance of studying a theory of trading before you deploy it and test it in a practical way, it is necessary to briefly examine the performance characteristics that indicate when a method is robust.
During testing of a system of trend-following, we would expect a trend of 100 days compared with a trend of 50 days, will produce an increase in profits, has increased reliability. As you increase the calculation period, this pattern continues, and when you reduce the calculation period this pattern is reversed. Is not able to use very short calculation intervals because slippage and commissions become too large, while in contrast to the long periods are not desirable because of the fluctuations on your property. Just for the big time, the oscillations may be large. There must be a clear cost model compared to the average.
Continue reading Improving earning potential by using more timing
The Relative Strength Index (RSI) is one of the most popular technical indicators used to assess fluctuations in charting. The RSI is typically used to compare the strength of a currency and predict price movements of the same.
This indicator was developed by J. Wilder. The RSI gives more emphasis to the latest data and provides a better indication of that provided by other oscillators. Because it is less sensitive to sharp price fluctuations, it helps to sift through the unwanted noise in the Forex market and put it away.
The RSI is equal to 100 – 100 / (1 + RS) where RS is the sum of positive closing prices divided by the sum of closing prices in the negative.
The RSI helps users to predict price movements and identifying turning points in the market. An increase in the value of these data will normally be followed by an increase in the prices of currencies and vice versa, or a downward trend indicates that the currency price will probably drop.
In addition to being a momentum indicator, Forex traders use the RSI as an indicator of volume. Due to the nature of the Forex market have reports of volume in real time is not possible. The RSI has a scale from 0 to 100, which is that any reading below 30 indicates an oversold market condition, while any reading above 70 indicates an overbought market.
Finally here are five ways to use the RSI:
- moments indicate overbought or oversold in the market;
- find any differences, or if the price of a currency reached a new record and the
- RSI does not show the same situation, usually a price reversal is imminent;
- find support and resistance levels;
- graphics clear learning indicators;
- find violations of the price.
- As you can see, therefore, the RSI turns out quite useful.
The theory of Elliott Wave is one of the most popular and which may be more difficult to implement because the waves have correctly can be very subjective. In this article we will examine a possible methodology to use Elliott waves in the market trade forex . Before proceeding I recommend reading the introductory article to the theory of Elliott wave .
The theory of Elliott wave analysis is a method developed by Ralph Nelson Elliott (1871-1948) which is based on the theory that many things in nature can follow a pattern of 5 waves. Applying this theory to financial markets means assuming that market prices will also follow this pattern of 5 waves composed of 3 waves of progress, called impulsive waves and numbered with numbers 1, 3 and 5, and two backward waves, called corrective waves with numbers 2 and 4.
Continue reading Using Elliott waves to trade in Forex
The CME Group will introduce a new list of contracts next week, designed to allow investors to protect businesses operating in foreign currencies against the turmoil in world currency markets.
The contract volume is related to the volatility of key currency pairs and for the first time the electronic futures markets will focus on the currency pair euro / dollar. The main products of these contracts are a wide range of derivatives of new creation, focusing on the volatility of prices, such as metals futures and currency markets. The company has introduced trading in futures on crude oil and gold in late 2010, while similar agreements are tied to corn and soybeans, whose launch is planned for the next few weeks.
Continue reading The operator will introduce the CME contracts forex volatility
There are many different financial markets in the world, but the Forex market is the largest. Today this market is likely to offer benefits that no other market has ever had. However, there are still some challenges to this market we have to win, if you want to earn money.
The first challenge is that this market operates around the clock for five days a week. Keeping this in mind, there is a need to set up a trading strategy so that it can be exchanged during the period of time convenient for you. It ‘also need to note that the Forex market allows you to invest only a small portion of your money and be able to earn a lot, but at the same time you also risk losing all your money.
It is no secret that the Forex market is extremely competitive and a very challenging area because of these two factors. For this reason, many people lose a lot of money. In addition, there are also many scams on the Forex market that will make you want to have some rapid gains. All these scams can cost you time and money.
Continue reading How to avoid the false systems of Forex
The exchange is one of the most business sectors invested never have taken place in human life. An investor or individual can instantly win thousands of dollars through the exchange of foreign currencies according to the movement of the value or rate Forex. A non-stop money-making business, you essentially trade foreign currency through your broker, while controlling the trade levels for each currency in which you are interested in trade. The market conditions “change of time and then if the investor has to strategies and think about what he or she trades can gain more profit daily. These changes usually occur because of events in real time in the country. With 24 hour access to Forex markets and the promise of huge amounts of profits, business exchange is a worthwhile investment to consider.
Continue reading Auto Trader Forex – how, what and when
Those that you use as a trading platform Metatrader sure you have tested dozens, maybe hundreds, of Expert Advisors by the respective strategy backtesting with tester. To perform a backtesting over a long period of time will inevitably need the quoted price of the currency pair and for the entire period during which we will test.
Continue reading Improved access to historical quotes Metatrader 5