Trading on the Forex market recognizes and classifies the different styles of trading, because of the fact that there is a wide field of tactics and strategies for trading and analysis of the currency market. Longtime development and improvement of basic and complex method of trading on, certainly, the most complex international financial markets, have resulted in the generation of a multitude of highly productive trading strategies, which are still created styles and Trader tactics. However, any attempt to find a unique trading style or universal technical indicator for establishing the winning pattern is completely the wrong approach the methodology of trading a. Building your own style of the individual, as well as professional teams, their building blocks found in the study of basic economic and technical factors, as well as the skills of pattern recognition, through understanding of the methodology of each of the styles, which are commonly known and recognized in the Forex market. Speaking on the performance of trading in the Forex market, with particular emphasis on money management, as well as strategically important element in our last issue, we presented some of the most common styles and tactics trading. For a specific reason, and this time we use the opportunity to point out the important fact that each of the styles, in his default, in fact aims to set out how it will provide more efficient management of the investment in the Forex market. Any obvious differences between styles, which at first glance we see essentially the model that the tactics and methods of trading that fundamentally benefits, which better adapt to the personal type of trader. Specifically in practice, fundamental and technical analysis, with many of its indicators, multiplicative effect on psychological different types of personalities. The essence of psychological analysis of the currency market, in mutual agreement with other analytical factors, shapes and natural establishes certain types of behavior and styles of business.
So it is quite clear that, before the adoption of any of the styles of trading, a very important detailed knowledge of all of its methods, as well as ways for adequate application of the principles in practice. Given that the market is “alive” and particularly mobile in periods of high volatility, the demand for creative and research mentality of traders is particularly evident. Good knowledge of the methodology adopted the style with which we trade, in given moments allows us to trade, “according to the cliché”, in terms of the use of technical tools and applications known tactic, but certainly there are situations in which dominates our personality – the decision to enter the position. All individuality and arbitrariness moment of entering / exiting positions, only one of the factors of complexity style choices trading. Also, the selection of one or more indicators, when creating the analysis and process monitoring changes in the market, as well as a concrete way of perception of their application, certainly defines dealer that creativity is beyond the scope of strict pattern. In this sense, each upgrade brings new tactics and results favorable Trade, and thus form a style dealer. Noting that every tactic has its advantages and disadvantages, before we adopt some of the styles, we need to know that there are many paths to success, so that in each of the styles important to identify the basic settings, which have proven to be successful over the long term application. On the example of the style “News” dealer will use all its positive aspects that, plus a graphic presentation, and show the most commonly used tactics. Trading with the use of this style for primary advantage has what is known in advance that the market will run into previously known point in time.
The most characteristic of this style is that the strategy offers performance trade in a short time interval. The most affordable style is just for those traders who do not have time to be doing this work full-time. Appears side (“bounce”) form, due to uncertainty about the outcome in advance of the publication of the news. The second stage consists of breakthrough levels of resistance / support, leading to sharp price movements and opportunities for profits. After the initial impulse, just as he reaches the maximum of its movement, there is a comeback attempt rates back. These stages are part of every market reaction in the publication of economic news and trading strategies on these phases are known as: trading by “breakthrough”, “riding” on a bull or a bear, playing on both sides at the same Time “hedger”.
Prior to the news, enter the position is done in both directions, sell and buy, at the same time. When news publication, trader comes from the “losing” position while maintaining the position to make a profit. Primarily what this strategy offers is to avoid the risk that the failure modes in deciding the prediction of price trends. Another advantage is that it is not limited selection of a currency pair, because all currencies are subject to the revelations of conscience. Aggravating circumstances of this tactic is reflected in skill and capabilities of traders to quickly make a decision on the retention of “wining” position. Depending on the planned store, can be considered a good result to the loss of 20 pips, with the movement in the opposite / positive direction is not bad, and that favorable trade accomplish more than lost 20 pips.
Trading on the attack
Tactics that follows the trend of prices on the publication of news and back after the news. Entering the position, after the publication of news, and in the direction of the breakout line, in order to keep the position until the end of the movement. Back after the news was part of the strategy, which after reaching the end of the first movement, with the help of Fibonacci retracement is to carry out trade in the direction after returning.
Riding on a bull or a bear
This strategy (expectation of results – bull / bear-or buy / sell) is treated as one of the most aggressive, so it is sure to set a stop-loss (SL) accounts, and it is recommended limiting profits and orders take – profit (TP), due to the complexity of prediction of the main trend and the level of its movement. Of great help is, of course, well-informed and behavior
The rules for entry into the position:
Enter a long position (buy) if: 5 EMA goes above 10 EMA and both stochastic lines to go up (do not enter if you are stochastic lines already in overbought territory); RSI must be greater than 50.
Enter the short position (sell) if: 5 EMA goes below 10 EMA and both stochastic lines to go down (do not enter if you are stochastic lines already in oversold territory); RSI must be less than 50.
The signal for a Buy position
When the price chart (the market) is near the upper line of Bollinger Bands a, and the upper and lower Bollinger began to spread to the middle Bollinger move upward generated by the increase in prices. Protective position of SL (stop loss) is usually placed below the middle line of Bollinger Bands.
Signal for buying position on USD/CAD at 1.25800
The signal for a Sell position
When the market finds near the line of the lower Bollinger, Bollinger Bands and lines-and begin to grow, the middle Bollinger starts moving up, down, generated a signal for the upcoming fall in prices.
Protective positions SL) Stop Loss) is placed above the middle line of Bollinger.
Signal for selling positions on gold $1205 an ounce
As a universal rule to close the trade position in most cases corresponds to the situation when the line Bollinger Bands and begin to collect (“mouth” or “jaws” Bollinger). Open jaws Bollinger Bands confirms the intensity of the prevailing trend, while the narrower side lines following trends.
Typical situations for entering the position:
When the market is found below the line of the lower Bollinger practical, decreasing the candle breaks through the lower boundary line Bollinger Bands, the need to wait for the next growing candle that his body passes through the line of the lower Bollinger’s up and then the generated signal for the position of purchase.
When the market is above the upper boundary line Bollinger Bands, the need to wait for the next declining candle that my body pierces the upper Bollinger’s down and then the generated signal for a sales position (for example in the chart: yellow arrow shows the signal for the next Sell candle after the observed pattern). In both cases the safest closing position is just before the price cut line middle Bollinger. The projection of TP (take profit) can be projected on a larger range of price movement, but it requires more monitoring of the trade transaction or application of other rules to protect capital. Of course, SL and TP should always be designed in terms of risk control, in accordance with the rules governing coins on trading account.
The signal for purchase is determined by the parameters of the RSI indicator, when the price breaks the level of oversold (level 30) from the bottom up. In this moment the price chart must be above the moving average lines that had already been entered on the chart. The opening position for the purchase should always be practiced at the beginning of the next candle, and directly behind the generated signal. Protective position of SL (stop loss) is usually placed under the nearest neighboring minima, and TP (take profit) is projected according to one of the rules of money management. A sell signal is generated as the price chart found below the line of the moving average and the RSI indicator breaks overbought level (level 70) from the top down. SL position is set above the nearest neighboring peak, and TP is projected according to the usual method in accordance with the amount of capital in the account. Characteristic positions SL and TP are set and depending on the time interval at which the trades, taking into account the risk control in relation to the amount of capital available.