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The chart below shows an ideal situation. In this example the trend was entered quite late. Caution: ideal does not mean representative of all trades. To learn more study the chart, where it is accepted that a very high percentage of setups will fail/lose. This is a game about losing but it’s not for losers! ...
The nature of what ‘prediction’ means came up a couple days ago, in one of my online discussions. The words that caused me to look into this were, “What’s harder to predict? 1 pip movement or 1000 pip movement?” – in the course an exchange of ideas on different methods. This question was partly rhetorical and somewhat argumentative (not that ...
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 ...
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 ...
Correlation is about how certain things are related. Some instruments are inversely correlated i.e. if price goes up on one, then price tends to go down on another. Positive correlation means they move in the same direction. It is almost never the case that there is perfect correlation between two instruments. Interestingly the DAX (GER30) ...
The terms ‘trend continuation’ and ‘trend following’ have caused me some confusion for quite some time until about 6 months ago. The first obvious difficulty is the use of the words themselves. It’s natural to think that if a trend is continuing then you must be following it. But the two techniques are rather different. ...
It’s a question that’s impossible to answer as it depends on several things – and each trade is different, as many things affect a particular instrument you’re trading. [An instrument is a stock (aka equity), commodity, forex, or whatever]. The really big and most important point of a stop-loss is to limit losses and limit ...