Translated from Russian by Google Translate
2 Сентябрь 2009

School of currency dealing. Technical analysis. Part 2. Trading Strategies

In a previous article I focused on the fact that there are two reasons for technical analysis forex does not work. The first - when the newcomers are beginning to change from one strategy uncontrollably on the other, not trying to dwell on one thing. Second - when using forex technical analysis by itself, without embedding it in a trading strategy. I believe that these two components are complementary, because you’ll first need to dwell on any one indicator, and then begin to build on the basis of its trading strategy.


All indicators are only Forex parts are a recipe for cooking food, which is called the «success». It turns out that the trading strategy and forex indicators are inextricably linked with each other and one can not exist without the other. Imagine that you have spare parts to the car. They are scattered in and of themselves will not benefit. But if they are put together according to the rules and assembly sequence, we get the machine on which to move. Together, all the details are useful, but they are useless in isolation. The same can be said with respect to trading strategies based on the use of technical analysis Forex.

Many novice traders make permanent castling technical indicators, trying to get the perfect recipe for success. But the constant volatility is unlikely to be able to give a positive result. If we use the tools individually, and will regularly change them, it can be compared to those as if we tried to collect the car from any two parts, for example, wheels and steering. Oops! Then try to collect the car from the seat and the engine. Same story.

That’s for this reason, just as the collector circuit assembly of machines needed, a trader needs a strategy of trade. Your goal when using the trading strategy will be to ensure that the current price meet your expectations. That is, that was predictable. Currency Trading Forex - is a balancing of probabilities, and your task - to outweigh the possibility of profiting in his side.

Some forex strategy, based on the use of technical analysis

Always necessary to realistically assess the potential of various indicators. They all have their own characteristics and each in its own good. For example, the signal produced by the crossing of moving averages or signal produced by the crossing of the MACD indicator is unlikely to lead to the conclusion that the entrance to the market will correct. Here, we must bear in mind that there is a separation of technical indicators to the leading and lagging. The above indicators are lagging, so when they will show that it is necessary to enter the market, it will be too late and the price will go a considerable distance.

Therefore, the emphasis is on the leading indicators that tell us when to enter the market, and when of it out. The peculiarity of leading indicators is that they predict the behavior of prices, before she committed the alleged act. Great popularity among the leading indicators used by the divergence and points of reference. Divergence - the difference between price and indicator reading.

In that case, if you prefer a short-term trading, namely the scalp, the pivot points and divergence are the most effective tools for determining entry and exit from the market. Information on how to use pivot points and divergence abound, so there is no sense in this paper to dwell on this account.

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In order for your trade has been more effective there are many methods and ways of trade. But it is worth remembering that the best trading strategies - these are strategies that you have created for themselves. Earlier I mentioned that the newly created indicators do not work. Do not operate on the grounds that they are not known to the public. But trading strategies are based on well-known indicators of work and work very effectively. The aim is to try to understand the probability of market movements in a certain direction and the right decision.

It should also be remembered that technical analysis Forex indeed consists of an infinite set of all possible indicators, but you do not need to memorize all of these indicators, candlestick patterns and shapes. This compares as if learned by heart all the details of your car before you could sit behind the wheel. If this rule would be applicable to the currency market, it would simply cease to exist.

Search the indicators forex that you like, and that you understand well. Study of these indicators are formulated on the basis of their own strategy. Its essence should be to help you at any given time to understand where the money goes. All of this is that a secret, which allows traders to consistently make a profit, while other traders who are not using a strategy that consistently receive damages.

In addition to the above, conducting technical analysis of Forex, you never want to forget about the rules of Money Management, that is, the risk management strategy. For example, professional traders risk no more than 1% of their capital.

But that’s not all. Do not forget about such a feature of the currency market as the ability to control themselves and their actions. You must comply with personal discipline, be psychologically stable. If you say that trading in the Forex market - is an easy exercise, you will probably cheat. Currency dealing - is a complex business where surviving one. But still they are. These are the people who came to his goal, no matter what.