See beginning of this article as the "Forex Secrets -. The true and the false breakout of resistance and support levels in Forex (Part I)"
In "exchange secrets", and LL Connors Rushky following. In trading on the deviations (fluctuations), the most appropriate model for the study of commerce previous peaks (maxima or minima) is. These tests, we can show the double-break point (rest-point, key point). So you can be a perfectPosition for the opening of an agreement. Under these conditions, the risk of loss is minimal. The test (test tube) at least where the long term position should be opened, there can be a bit 'higher or lower. After all, the carrier can not be set before the realization of the limit of detection (the tube). Most of our models was formed immediately after the detection of success (tube) - that is to say after the last maximum / minimum approval by the market and the return toThis new value.
FOREX
Figure 2.9. An example of the double-break point (rest-point, key point). (To display the image you see the notes at the end)
T. Demarque examined the difference between true and false breakouts through the technical levels. He stressed the importance of assessing whether the intra-day price are true epidemics. TD-points must be chosen properly. TD-line must be drawn from left to right. The price to be calculated. After thisThe three-way-out must be respected:
1 may seem a sign of reversal.
2 An important change in the correlation between the demand and suggestion is possible.
3 The guide price is important as knowledge.
There is also another factor to be addressed. You must check whether the intra-day price breakout is true. This is particularly important. I consider my investigations in this area as an essential elementContribution to improving the technology of choice from one moment to enter the market - and leave. What's more, the principles established in other methods of technical analysis as well. The following situation is fairly typical. Traders take a position in the points of the trend line breakout-be. When they see with horror that the prices to settle down and start moving in the opposite direction. This leads to considerable losses. However, dealers on the sameMistake of not thinking about the origin of it. False breakouts are still quite common. And 'scandal bench, because some of them completely by merchants refuse to use the trend line. Or techniques to develop TD-lines slightly improved the situation. However, false breakouts occur. As far as I know, is a technique for assessing whether the outbreak is false or true were not yet developed.
Now living on the breakout qualifiers.
TD-qualifier of the outbreak# 1
The signal from "buy" is true, if the closing price the day before the arrival of the signal decreased.
The signal to "sell" from life, if the price is the closing of the day, before the arrival of the signal increases
TD No. 2 qualifier of the outbreak
The signal from "buy" is when the opening price is higher than the price of the outbreak.
The signal to "sell" from life, if the price is lower than the opening price of the outbreak.
TD No. 3 qualifier of the outbreak
TheSignal from "buy" is true if the closing price on the eve of the outbreak, has summarized the difference between the closing price and the minimum price the same day (or the closing price two days before the outbreak, if it is lower) is lower than the price of the outbreak.
The signal to "sell" from life, if the difference between the closing price on the eve of the outbreak and the difference between the maximum rates of closure on the same day (or the closing price of the two daysbefore firing, if it is higher) than the price of Breakout.
I found three TD Breakout Qualifiers. There are two pricing models, made the day before the outbreak likely. In addition, there is a pattern that is formed in the days of the outbreak. In particular I have drawn the following conclusion. If a market in the state of oversell (buy too much) the day before the outbreak, increasing the probability that the quantities (pressure) of the buyer (seller) all have the samecan not be reduced after the epidemic. This only makes the illusion of market power (weakness).
Giving the analysis of the behavior of prices, on the eve of the outbreak, I discovered the following. If the closing price on the eve of the magma chamber is lower than in previous days, increasing the likelihood of true intra-day breakout.
In this case, you should open a position in intra-day crossing (crossing) for the trend line. I find that as TDBreakout Qualifier # 1 (see Figure 1.37?).
In some ways, similar to TD Breakout Qualifier # 3 TD Breakout Qualifier # 1 In reality, it takes into account the price movement on the eve of the breakout trend. But in the case of TD Breakout Qualifier # 3 to determine the difference between the maximum and the closing price on the eve of the trend line break down. More from this difference, that heavily on the closing price removed. And 'the method of calculatingdelivery of value. The question is calculated as follows. The difference between the closing price and the minimum price the eve of the trend line is upward breakout tothat added much to the closing price (see Figures 2.10, 2.11 (143 and 144)).
Bonds Chart 2.10 each. (To display the image you see the notes at the end)
The real breakthrough can be detected as follows. You have the difference between the closing price on the eve of the magma chamber andMinimum price that day (or the closing price the previous day - if it is lower). In addition, the difference must be added to the closing price the day before the outbreak. If the total is less than the price at the time of the blast, the breakout is true. If the resulting value is higher than the price at the time of the outbreak - the epidemic is probably wrong
In the example (see Figure?) The difference between the price ofClosing and the minimum price at the outbreak of the TD-line treatment, (AB), the closing price is taken on that day. The value obtained is less than the price at the time of the outbreak. Consequently, the trend line breakout is true. In this table, the TD-line application (A'-B ') is also shown (traces).
In Figure (145?) To determine if the trend is downward breakout true, is the use of the procedure, the sense in view of reversalone described above.
Chart 2.11 S & P 500 (To display the image you see the notes at the end)
First there is the difference between the price and the closing price of the minimum on the eve of the outbreak to determine the high lead (AB). In addition, the closing price must be the same day, this difference will be added. As you can see, the resulting value is less than the price at the point of rupture. This confirms that the outbreak is the case.
Chart 2.12 soybean oil.(To display the image you see the notes at the end)
The main drawbacks of "classical" theory of the distinction of true and false breakout technical levels, from the point of view of Forex Master V-TS.
These drawbacks are as follows.
1 The "classical" theory of true and false breakouts has developed the technical level (not taken into account if the volume of trading) was not the question of the Forex money market conditions. Some other marketsconsidered.
2 Demarque T. also recognized that this approach is wrong in general. Classicism has approved the following. What concerns him, still do not know any technique that allows retailers to see if the price breakout is true or false could.
You can judge for yourself.
In fact, it is clear that the agreement will be given immediately after opening the previous day's level of technical breakout much more accurate. E. Neiman do not write on this aspectdirectly. However, his approach to the opening sequence on the belief that the particular breakout is based must pass along the trend of development. This approach should be examined much more. The reason for this is that once one of the key figures of the opposite (as "head and shoulders", or "vice versa head and shoulders") is simply the result of (only): a peak the day before the local outbreak.
Some dealers try "play it safe." Not always be avoidedin the figure "head and shoulders", which offer opportunities of five (!) days to start the technical level of the outbreak. In this context, the following questions arise.
You can always give post factum analysis of large markets. In this case, a serious tendency to select the duration between 30-70 days or more (Swagger as he did). So you can recommend their offers merchant in the 6 th day of opening to start the technical level of the outbreak.
But what about the actualCommercial? Under these conditions, the trader does not know the actual duration of the course. For example, see Figure 2.12 GBP / USD move 30 June 2006 serve as an example. The support at 1.8000 was broken. After a waiting period of 5 days, you could open an agreement close to 1.7560, the Day 6 - after the currency reform was more than half of the way in the proposal (with 440 points!) Int One might expect a local minimum at 1.7310 - to be more accurate to 1.7435.It is at this point, after the outbreak of the maximum depth of yesterday, the currency has reversed.
According to Figure 12 GBP / USD movement (To see pictures, see the notes at the end of article)
This is the way to use the technique of bravado, you can win only 125 points in a trend of growth conditions (690 points). However, it should be noted that the opposite might happen soon. That is, disclosed, and 500, to adhere dogmatically to the rule "is not a business during the openingopen the first 5 days after the landing aircraft. "As a result of an agreement at the end of the movement of currency, or in front of the recoil. If a doctrine does not apply to the practice no longer correspond to what would be best to drop (waste), is not it?
Now dwell on the recoil system of T. Chand in his book "On the other hand technical analysis). Despite all the positive aspects of this system has serious difficulties inherent in it. That is, within theWith this system, we can not identify a point where he turned the reverse recoil.
The theory of the breakout level, represented by D. and D. McCormick cats in "Encyclopedia of Trading Strategies", designed to be revised (shown) from the point of view (compared to) the closing price the previous day. That is, can give hundreds of examples, if the work is given to the technology of profit in forex. At the same time there are also hundreds of adverseSituations - such as the outbreak of a local high point of the day before the resolution or in a very serious setback in the direction that may lead to the breakout level.
Given in classical analysis, Forex, are the terms of the technical levels of resistance / support is tilted (inclined) and horizontal channels are not clearly defined - they are only "often". Therefore, how can you tell the difference between these characteristics for which the characteristics ofcommon?
Major was the first to put the following problem. How to develop your position in all this mess of true and false breakouts, trends and apartments at different times?
The movement of the currency pair can be divided as follows.
a) the wave trend;
b) bounces trend;
c) an apartment.
Then, all possible combinations of these three features are on trial at different times, at least get 3 screens - as A. Elder hasrecommended.
And 'necessary to calculate the number of combinations. For example, the combination of No. 1 This means that the trend in minimum time, while the apartment is located in a time of great size.
Be determined at what points must be true or false during a pandemic?
It 'just use three screens (display) the elderly? Perhaps more screens would be preferable.
For me, I work with 4 screens. What are the disadvantages andThe advantages of date?
How different is time correlated to the following conditions. That is, indicates a point of sale terminal, there are 4 screens. However, we must consider the amount of time frame is much larger.
What is the correlation between the technical levels of resistance and support, each of which exposed to 4 screens?
Completing the way in which the fundamental and technical analysis are mutually exclusive? How can aTraders use fundamental analysis in terms of their application in the field of technical analysis are the problems listed above?
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Forex Secrets - unlock the true and false resistance and support levels in Forex (Part II)
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