Recently I was thinking about how to make my trading better - how to increase the odds more. Thinking about many successful traders from the history, they used yet different kinds of a Market Cycle Theory. The need for such a theory arised from their own trading experince and so why not to use one for our own wealth creation? What theories are there and which of them can trader use for trading? Keep reading and you will find out.
- Dow Theory
Considered as the origin of technical analysis. Formulated by Charles H. Dow in 1900. Bearing the most valuable ideas for every technically based trader. Mr. Dow in his theory (besides many other valuable thoughts) recognized three different trends. Primary, Secondary (Intermediate) and Minor trend.
Primary trend is major trend of the market which will influence the Secondary and Minor trends. It lasts one and more year (some sources says 1-3 years).
Secondary trend is formed against the primary trend and lasts from two weeks to three months.
Minor Trend lasts from hours to a month. It should be watched simultaneously with Primary and Secondary trend. The direction of this trend will be logically in the direction of the Primary trend and allow the trader to trade with the Primary trend.
On its layers it can be combined with different market wave theories such as Elliot Wave Theory with further employment of Retracement Theory. But it is not the subject of this blog.
Dow's trends are very poweful tool which tells you where you are and what you can expect. More on chart below.
- William Delbert Gann
The master of market cycles. The theory is very extensive and it is not possible to write it all down in this short blog. There are few books out there which describes it very well e.g. GANN MASTERS TECHNICAL ANALYSIS COURSE. This book includes other important thoughts by W.D.Gann which should be known to every aspiring trader. The greatness of Mr. Gann can be found in other posts on this site or anywhere on the internet. Needless to say many other theories out there arised from Gann's knowledge e.g. Murray Math.
Even more curious are statements that Mr. Gann used the astrological cycles. Whether it is true or not, I don't sincerely know. But one thing remains at table and it is an academic paper by Dichev and Janes (University of Michigan, 2001) which proves statistical significance of: "Returns around new moon dates are about double the returns around full moon dates. This pattern of returns is pervasive."
- Magical T-theory
Discovered in the early 1970's by Terrence Laundry. Cited from 1997 Introduction to T Theory, Laundry sums up his theory as follows: "it basically states the duration over which investors can obtain “superior equity returns” will always be equal to the previous time period in which returns were subnormal. A simpler way to put it is to say the market can only “make a strong run ” as long as it has previously ”rested”. As you might expect, the practical purpose of the theory is to anticipate the runs of “superior returns”."
On the chart below, we can see the old way how Mr. Laundry has used his theory. He further discovered and proposed using it on Advance-Decline chart.
- Andrew's Pitchfork Derived Cycle Theory
I don't exactly know where I learnt this from but If you knew the author, I would be very grateful for letting me know. I would definitely consider this to be the most fresh and the best of all dynamic cycle theories out there.
We start by plotting A.H. Andrew's Pitchfork. From the reaction swing (B-C) we take the center point and from there every past high/low is projected to the future with the same distance counted in bars or time.
One of the presumptions for me always was that it has to be the original Andrew's Fork. It means (B-C) swing is above starting point A. If C was lower than A, then the market would not have enough energy to move higher.
- Cycles in Quantitative Trading
I did a bit of googling but haven't found any 'sophisticated' method used by quants =) If you knew about any, I would be more than grateful for anything. You can comment below.
From all of the traders technical analysis and theories described above I will go with the oldest one, the Dow Theory as it has time proven robustness and is least subjective to ones trading.
If you liked this Foreign Exchange blog, please leave comment or like. You can also check my latest Forex charts or blogs:
In todays blog I'd like to talk about the RSI. The very well known indicator available in every possible charting platform out there. There are many traders using it while being profitable traders, from what I can remember even Marty "Buzzy" Schwartz was using it with his Moving Averages and Stochs. And then as always in this business there are people who are using it, but can't find out what do they do wrong all the time... And so, I would share some thoughts (mainly gained from book by John Hayden which is solely about the RSI) what they might be doing wrong and what not.
From my point of view it is most important to mention that the RSI is a momentum indicator, but we still meet with people who trade against a strong momentum which is shown by their plotted RSI.
However before going any further, it is always good to simplify the formula computing the value of RSI and think about it as a logarithmically scaled Momentum indicator.
This is very important to know:
- Simple Bearish Divergence - Occurs in BULL market only
- Simple Bullish Divergence - Occurs in BEAR market only
Lots of literature and websites suggests you trade the Simple Divergences, more specifically to short the market when Simple Bearish Divergence occur and vice versa. But Simple Bearish Divergences, as learnt above, occur in bullish market only, so there is no logical reason to think that the trend has changed because of Simple Bearish Divergence occurred. Even further it is better to think about it as a trend confirmation and good place to reload your ammunition in the pullback which created the simple bearish divergence.
Take a look at this picture below which sums it all up.
So we could continue explaining further and further, adding more details about what can this one simple indicator tell you about the market.
And if you saw some videos/literature (link) which tells you the RSI doesn't work, I would ask myself first whether the person saying such a words has at least tried to find out the basics about the indicator. And not just blindly following first rule which was found as a first link through Google.
I hope you like the article if so leave a comment or 'like' =)
You can also check some of my previous articles.
Quant Trading: Averaging Point Estimates of Linear Regressions as a Way for More Accurate Predictions
A Chinese man walks into a bank in New York City and asks for the loan officer. He tells the loan officer that he is going to China on business for two weeks and needs to borrow $5,000.
The bank officer tells him that the bank will need some form of security for the loan, so the Chinese man hands over the keys of his new Ferrari parked on the street in front of the bank. He produces the title and everything checks out.
The loan officer agrees to accept the car as collateral for the loan.
The bank’s president and its officers all enjoy a good laugh at the Chinese man for using a $250,000 Ferrari as collateral against a $5,000 loan. An employee of the bank then drives the Ferrari into the bank’s underground garage and parks it there.
Two weeks later, the Chinese man returns, repays the $5,000 and the interest, which comes to $15.41. The loan officer says, “Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multi-millionaire. What puzzles us is, why would you bother to borrow $5,000?”
The Chinese man replies: “Where else in New York City can I park my car for two weeks for only $15.41 and expect it to be there when I return?”
Copied from: https://www.topspeed.com/cars/car-news/car-joke-of-the-day-how-to-park-for-cheap-in-new-york-ar54464.html
An extraordinary LBC interview between Nigel Farage and Marine Le Pen, the controversial right wing leader of France's Front National speaks.
Amongst the numerous topics covered in this lengthy interview, this French Leader of the current French opinion polls talks about the tension between European Leaders. Relationships with USA and Russia, the logical steps to let European nations have their own currencies which will naturally find their own values. "The Euro is a major European handicap". The special trade relationship the French and British could strike up. The blackmail tactics against the UK by the European Leaders. Marine praises the British people for deciding to leave the European Union. Marine also confirms the immediate suspension of the Schengen Agreement when FREXIT happens.
Viva la France, when France will become French once again!
Come, Tell me your Forex Story. Join the Forex Foreign Exchange Market Forum and tell your Trading Story at Forexmospherians.com
I would love to hear all about your trading journey, where do you come from, when did you first become interested in Currency Markets and Trading, how long have you traded, what currency pairs do you trade, what type of indicators do you use on your Forex charts, are you a Fundamental Trader or do you use Technical analysis, what FX strategies do you use and what is your Forex trading plan?
This Video Dedicated to Forexmospherians and all other good guys in Life.
Current GBPUSD 4,800 pip Short
You have found the Forexmospherians and so the Question is: "What are you going to do now?"
Videos, Blog posts, photos and alerts are all available throughout this Forex Forum and so feel free to check the history GBPUSD and how I traded this pair and shared the analysis and Alerts.
Seek The Truth - Seek The Kraken
71 Forex Pairs and the Analysis is freely available here for every Time Frame and Beyond.
The following is Live Forex Technical Analysis for GBPUSD - The Forexmospherian Currency Kraken:
CBA = Neg
JBCB as follows:
Daily = Bear
1 Hour = Bear
15 Min = Bear
5 Min = Bear NTZ
FPA as follows:
1 Min = Pos NTZ
5 Sec = Pos NTZ
1 Sec = Negative
1/20th Second = Negative, Negative, Negative.
The following videos highlight the Hidden Forex Market Secrets and Technical Analysis
Video Published on Jan 23, 2016
Video Published on Jul 5, 2016
Video Published on Oct 12, 2016
Here are my thoughts
I am at heart a scalper
I understand that a lot of money can be made with swing trading but my style is of scalping
Here is in a nutshell my method
M5 chart + macd + stochastics + bollinger bands
I have attached a chart as an example
I have made approx 15% in last two months
Here's a Forex message in a bottle - I may have mentioned this before but thought it just could add some value to someone someday somewhere:
The question is would it be fair to Forex Brokers if we posted what the Forex Markets would do for 71 currency pairs in multiple time frames, thus giving everyone here time to prepare.
I say no, that's not fair on the Brokers at all! and we never ever do it! (everyday nor with up to or greater than one weeks notice as per Forexmospherian Currency Kraken, FPA and CBA. Nor do we make numerous videos giving 12 months notice of what the markets will do neither. Nor do we code any posts nor publish videos that contain hidden Forex market alerts and messages. Just to name but a few items not available here!
Have a great weekend everyone :0)
Trading Forex | Everything is Consciousness
After considerable thought given to a previous post called "Everything is" which I wrote many years ago and shared at another Forex Trading Forum called Forexstreet, I decided to go into this a little more and hopefully it will be of use to others who missed out first time around or for those who needed further information. So, lets get into this with a Free thinking mindset which is at the heart of Foreign Exchange Trading. Reasonable to say so some effort needs to be made to observe the wider market picture, not just here but in all things in life and throughout the universe. Further market observations perhaps will register and hopefully a deeper understanding of Price Action and market dynamics can be attained.
The very Basics in terms and Magical Three
Everything in the Universe fits into one of three Classical Categories;
Everything in market dynamics has Three Classical States:
1)The market is going Up.
2)The Market is going Down.
3)The Market is going sideways.
Every Forex Trader falls into Three Classical categories :
1) The Smart FX Trader.
2) The Semi Smart FX Trader.
3) The Misinformed.
A Pattern inside a Pattern inside a Pattern.
Some science: With exchanged Reference points and applied variables.
Gas and liquid move quickly and easily from one place to another so lets very quickly and only for a moment substitute those elements into market movements along with Solid Matter.
Daily or 4hr Tf's, with market Bull or market Bear conditions with momentum. Two questions now spring to mind for these Time Frames:
1) Easy to spot Bull/Bear momentum in these Time frames?
2) Easy to trade this momentum and profit either side of the Time frames in a successful, consistent, productive, time efficient manner?
Consider sideways movement or the appearance of moving no where in these frames. In other words, we are looking at Solid Matter in scientific terms for all of the aforementioned.
Markets moving no where, static or in Solid Matter.
In reality Solid matter never stops moving because atoms attract then repel each other but do not go too far away and are bound by an invisible rubber band for sakes of simplicity (Bulls oppose Bears). Now within Larger Time Frames which are also known as the dead process, naked to the human eye, brain and everyday profit making opportunities. Expansion and Contraction of markets through a heat source created by “Work” will also be known as energy thus in turn will create a reaction. The smaller frames can therefore be interpreted to the Liquid and the Gases. Their reaction and atomic structure are built very differently to those of the Solid therefore they cannot be handled in the same way.
Taking Solid Matter to the umpteenth degree enables clearer sight of molecules and how the lattice of infrastructure recognises their movements, very loosely translated equates to being similar to finger print or DNA. Spectrum of internal Lattice structure, Lattice Supremum or infimum when expanded are reviewed in market dynamics and pattern molecule recognition through every frame available and beyond. Some may call this the Matrix and a deeper understanding will only be achieved once a fully engaged mindset of compatible, conditioned and experience enhancement via intensive formulae equations which are satisfied using the following...
For Copyright reasons I will only discuss this in smaller Groups but thank you for taking the time to read and review some basic science, mathematics, geometry and atomic structure within the Matrix of the markets. One can only hope E.Y.E.S. software are now beginning to see and are becoming more engaged with the consciousness which was taken away before many even begun this journey.
Originally posted somewhere in the Blogmosphere (Forexstreet) by Sir Gissachance on November 22, 2012 at 11:00pm with 1290 views, 12 Likes, numerous comments.
- Comment by Peter JCP on November 24, 2012 at 11:03am
Hi Sir Gissa - some great pips you have amassed on those pairs using "masterclass" trading techniques fitting of the accreditation you have acquired through decades of trading experience.
Your latest "3D" chart on the EU even shows something I have not seen on any other chart - and I will bear that in mind for this next week.
Have a great weekend
- Comment by Sir Gissachance on November 24, 2012 at 3:14pm
Due to the unprecedented amount of requests to continue posting on this blog then I will share, update, support and advise further as follows;
Thank you for those kind words and as you are fully aware, I have published a blue chart which is my normal public setting. The positioning of blue chart above black will give stark contrast to viewer and awaken their inner thoughts. (As stated on another post this is not for the faint hearted but I did give prior alert).
Collaboration of items posted will undoubtedly inspire the VAK and therefore Golf Ball sized consciousness will and can only expand. However, by using additional insight through a fully functional, Free Thinking, effective, efficient, professional, well traveled, diverse and broadly educated state of mind, in other words "ForeXmospherian."
We can apply a fully varied knowledge base and skill set, including using mathematical and scientific calculations as a tool. Which pass through every Degree of Geometric dimension. This base view is how I See, Hear and Feel PA in every single TF. I would however like to submit additional information but one will not progress to that at present due to "information overload" which would be unfair and flood all learners new and old, fellow traders and any Forex Educators.
I digress, you may also say deep reflections run through ones mind as one translates the absolute minute movement of electrons within a chart and the positive nucleus encompassed by negative orbital frequencies. (N.B. These do not actually travel in the direction one is taught but may cover that later on another occasion).
Have a great weekend.
Sir Gissachance (PPND)
- Comment by Sir Gissachance on November 24, 2012 at 8:50pm
First of all I would like to mention that I don't have any personal experience with this and also would like to warn you about possible damages it can cause to your (mostly - in case of psychedelics) personality. And is absolutely NOT a recommendation to do anything like this.
This topic caught my attention recently and so I started doing a little bit of research about it which I would like to share in this blog and afterall I would like to hear your opinions and bring on some serious discussion.
About Microdosing in Short
Microdosing is taking small amounts of normal dose of mostly psychedelic drugs. The most used is LSD then shrooms and mescaline. The reason why most of the people choose LSD is that it most probably does not (for now there are very few academical writings about it out there) harm you physically (from what I've found out, the pure LSD can damage your psychological side).
The Users and Experience
This is the paragraph where it becomes more interesting. From article which can be found on Wired, the users are mostly people who are looking for solving difficult problems in their jobs, those who has to keep their minds concentrated for long time period and increase their skills.
It is said that Sillicon Valley is 'home' of those microdosers. But you can also find others from different professions in the article describing their experience.
New York-based research chemist Joseph says: he's surprised by the range of contacts who are asking him about it. "Older folks, very sensible professionals in hedge funds or the medical industry. They are not looking to have a trip with their friends out in nature - they are looking at it as a tool."
Fadiman one of a few academical researcher on microdosing whose 125 participants report enhanced pattern recognition. They can see more of the pieces at once of a problem they are trying to solve.
I am not looking for any pill (like in the video below) which would make me a super-trader. But on the other hand, trading is the game of edges and so why not to increase it? :)
And if you enjoyed the reading, you can check my two latest blog posts:
Quant Trading: Averaging Point Estimates of Linear Regressions as a Way for More Accurate Predictions
Everything You Need to Know About Peg on EUR/CZK and How to Trade it Afterwards
I wish You from the bottom of my heart merry Christmas and happy holidays ! :) Lots of presents [pips ;)] under the christmas tree and enjoy the great christmas atmosphere with all the people You love and like :)
And Christmas in Canada be like :o) Hope this will avoid us all :)
I am an occasional chess player and there are many quotes and proverbs about chess that can be viewed as trading Forex :) I would like to share some of them with you and also would like to know what you think about it whether it is same as a Forex trading strategy, similar or absolutely unrelated to trading in the Forex currency Markets. ;)
I would like to add one picture everyday.
So the first one is:
What do I think about it... Is probably that I was too much concentrating on the openings of my Forex trades rather than the middle game or endgame in the process of learning currency trading.
As once a well known czech lobbyist Mrazek said: "There are only two types of people, those who are for sale and those who you can buy."
Can Clintons be added to any of above mentioned category? Well after watching the below shared documentary, at least for me, they definitely can be.
It has also twisted a little bit my view of global politics. As long as I thought it is the US which is 'winning' over Russia in their global geo-political games but it seems it's more than easier for Russia to back Clinton Foundation and take over any important industry.
A lot of facts could be manipulated in the documentary as I don't have so much time to check its trustworthy but at least one thing is very clear which we should not forget: "It is all about the money!"
Forex Traders and Educators Wanted Dead or alive. (Preferably alive!)
Why not join Forexmospherians.com and share the latest posts, alerts, updates, news and great company with some of the best Forex Folk online.
They say the best things in Life are for Free and so this probably includes the Free Membership at Forexmospherians.com :0)
Alternatively sit on a cold wet rock like a Bull Frog and dream about that perfect Trade and Forex Forum you missed out on!
Sign up/Sign in to join Forexmospherians.com we are only a small hop away!
2016 The Great BREXIT Escape Year from the European Union. A remarkably fantastic achievement by the British people for not falling for every Politrick in the book from Britain and Europe's leading liars statisticians, economists, columnists, politicians, news and media and of course the circus side acts from the latest celebrities. BREXIT played out with the normal underhand tactics along with some new ones too. However, congratulations to all for voting to leave the European Union at long last. Britain once again shows Europe and the rest of the World the way home and onwards to new beginnings. Lets just wait and see how long and how many other nations around the world will take back control and realize the Eurozone and Globalisation generally was always the "Emperors new clothes" and a set up for the nations sheeple people.
2016 BREXIT turned out to be an excellent year for the Brits and a wonderful year to collect the colour with a belated Happy 90th Birthday present for HRH Queen Elizabeth II and the Royal Household.
"BY THE LEFT, QUICK MARCH!"
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Foreign Exchange Markets Technical Analysis for Multiple Currency pairs using Support and Resistance and Chart…
The Basic Forex Technical Analysis:
Narrow Sideways Channel and entry strategy thinking along the lines that the market will eventually breakout.
Channel Breaks = Bear Market
Price Action held under 200 MA = Bear
Declining Channel Identified
Forexmospherians.com Site Maintenance and Upgrades for Sun 9th July 2017. Duration: 2 hours.
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First of all I would like to recommend a great document out there - "DB Guide to Exchange-Rate Determination" which was written by Deutsche Bank in 2002 and is overfilled with FX rate determination, forecasting methods which can be used for all short term, mid-term and long term trading. If you haven't read it, look for it, download to your Kindle and take the time. It is worth. :)…
The Team at Google have been working hard with the Forexmospherian techs and have just developed…