HOLY GRAIL - myth or reality?
The notion of traders "Holy Grail" - a system of trading in the Forex market, which, roughly speaking, is "working" under the laws of the market movement, which is capable of extremely precise to adjust to market movement, which is able to foresee its future direction and, accordingly, on this basis, a system which provides a fixed return, and which excludes incidental damages, even!
Obsession with finding trading in the forex market, which would exactly meet all the requirements that relate to the concept of the "holy grail" haunted many generations of traders, they do not leave it without thinking, and the current generation of traders.
Strictly speaking, this is a concept and lead to progress in the formulation, revision and improvement of mechanical trading systems (MTS) and automated trading systems (ATS) in the international currency market FOREX!
Who knows, maybe it was you, dear reader, and prepared for the honor of finding the "holy grail" and destroy the very notion of Forex and all that it includes a ...
And at the moment, I suggest to consider the position of the system related to the concept of the "holy grail" is those who are able to work in any market at any given time, that is, that although not perfect, but many of its parameters and characteristics meet the requirements of to the "Holy Grail".
Here for example one such system ...
Its operating principle is based on the indicator ADX (Average Directional Index, the index averaged direction) Welles Wilder, this strategy works in any market in any time frame.
First of all, you should review the working principle of the indicator ADX.
Simply put, ADX measures the strength of the trend in a certain period of time. The stronger trend in either direction, the higher the ADX. (If you want more information about the construction and interpretation of the ADX, recommend It was developed and described in detail in his book "New Concepts in Technical Trading Systems" by Welles Wilder.
When prices in a strong trend of making new highs (lows), you should always buy (sell) on the first pullback.
This is a fairly accurate method used to determine the opening position after recovery.
Opening this transaction, we expect to continue the previous trend.
Usually follows one of two results.
Re-test may fail in the previous high / low - in this case can usually be made small, but still a profit.
In the second scenario will begin a new stage to continue the trend.
In the worst case, this is the entry point with a very low risk and a few embodiments of the output.
The indicators used and their settings:
Moving Average (MA) - 20-day RSI, Exponential, to close
The indicators used and their settings:
Moving ) – 20-ти периодная, экспоненциальная, на закрытие Average (MA) - 20-day RSI, Exponential, to close
Average Directional Index (ADX) - 14-day, at closing, with a level of 30
Terms and Conditions for purchase (the conditions for the sale of the other way around):
- 14-period ADX must be greater than 30 and continue to rise.
It identifies the market with a strong trend.
- Look for the restoration of prices to 20-periodic exponential moving average (Moving Average, MA).
- Typically, the reduction rates is accompanied by a decrease in ADX.
- When the price touches the 20-pernodichnoy exponential moving average, put a buy stop above the previous bar.
- After his performance of the protective type stop selling to the newly formed swing low.
- Tighten the stop the accumulation of profits and exit at the peak of the last samoyu fluctuations.
- If you think that the market may continue its movement can be closed at the peak of the last swing only part of the position and bring the foot to rest.
- If the transaction is interrupted by a protective stop, open it again, putting a new
- Buy stop on the original entry price.
- After a successful transaction ADX must again rise above 30, before it can be
- Trade another reduction to the moving average.
PLEASE NOTE: Many traders wrongly believe that the decrease in ADX
indicates a trend reversal. This is rarely true.
Typically ADX peaks when starting price consolidation. This scheme is easy to find.
Do not be lazy, take the time to independent study and research plots of the scheme.
Perhaps, soon you will understand why this system can try to call the "Holy Grail"!
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Grail - it is reality! The question is how to represent the people themselves. For me, this is 1000% accurate levels of resistance rates. Ascending and descending. Hint - voskhodyaschii parallel, parallel top-down, horizontal, no!