Tag: indicators

 

What is technical analysis?

When I first started off learning TA, I thought it was ‘technical’. There is nothing technical about it. Technical tends to mean something very complex. It’s not that. TA is a strange two words. Actually, there is little in the way of analysis with pen and paper. Basically you use your eyes. That’s it. You won’t find any charts or descriptions of indicators in this post. Novices – and I was one – tend toRead More

New traders conned

This morning I receive yet another email from somebody selling a system for beating the markets, subject to terms and conditions. It’s some software that runs on their server, that gives off signals when to enter long or short. Cost? USD $x9x down from $xx9x – and one is offered some ‘ultra’ indicator as free. Links to the advert are tracked, so that ‘they’ can monitor who clicks what in their emails. The adverts usuallyRead More

Deceptiveness of the RSI

The RSI (relative strength index) is classified as a ‘leading indicator’ because it is thought to have predictive value. By contrast lagging indicators are said to simply follow price and have less predictive value e.g. bollinger bands. The reality is that no indicator can predict anything and all indicators have limited predictive value because they all rely on historical price movements. Notions of predictive value are formed after events have happened, and are subject toRead More

Assessing trend strength

It’s usually possible to easily spot the direction of a trend by looking at a chart – that’s the easy part of trading. What’s not as easy is to work out how strong the trend is. By ‘strong’ I mean, if you’re putting your money on the trend going in the preferred direction, you would wish to have some idea of how powerful or reliable is the push. See below a clear trend down onRead More

In a good and difficult week

Only occasionally I share results of my trades. This week has been an important success in the lead up to the BREXIT referendum. The markets have been wild, to say the least. But in trading we like ‘wild’. I’ve used the ‘stealth trading system’ – and this last week was a pretty good test, playing 30min to 1H time frames. The wildest ride I ever had was with GBPCAD today 17th June 2016. See below. I kept myRead More

The power of time momentum

I’ve now coined the term ‘stealth trading’ to mean trend following. All this is perfectly legal!! The chart below shows generosity to the markets. No longer are we fighting with the markets. We’re being kind in order to get our due returns. This is entirely different to a snatch-and-grab approach. See original assessment here at Tradingview. This is a follow up to EURUSD Analysis on 13th May 2016. (Snapshot reinserted here for ease of reference.)

EURUSD Analysis

This is my latest analysis on EURUSD. This is based on combining a number of indicators to find a probability estimate of where the trend may go. In this analysis a trend is identified. No prediction is made. A strategy for entry and following of the trend is worked out.  Probability estimates based on standard indicators: 1. EMA50 2. Aroon 19 (a customised version). 3. BuySellSignal 4. ATR stop-loss by Vervoort. 5. RSI. 6. FibonacciRead More

More on trend following

Trend following is where the money really is! Why? Because you’re not bobbing in and out of the markets trying to catch a few quid. Instead you’re finding established trends to ride for quite a long way. There are several ways to catch trends. See: Trading with Guppy and  Revisiting the Williams Vix Fix . The technique in the chart below is based mainly on using Aroon and RSI indicators. This seems more efficient and less energy/timeRead More

Who the devil is Aroon?

Aroon is not a ‘who’. Aroon is an indicator of momentum in the markets. But it does more than show momentum. It is about time-momentum which is a novel and under-appreicated concept. The Aroon was developed by Tushar Chande  (PhD in Engineering and MBA at the time). In 1995 Chande first published his ideas on the Aroon, in Stocks & Commodities – a most respected journal contributed to by people of exceptional qualifications and trading experience.Read More

Support and resistance again!!

Today I came across another classic example of support and resistance. I often review things that I had already learned so as to etch in my brain the importance of the concepts. The chart below explains more.