We offer 7 extremely simple but effective ways to enter the market. They are one of the best, although simple and straightforward. These methods are well manifested, confirming efficiency in the vast majority of cases, when other methods of folds, giving false signals or causing us to doubt the correctness of the decision. They were selected as a result of studying ways to correct market entry. Described entry points work equally well on any markets: FOREX, futures, shares. And whatever the confidence of success, we should not forget about the orders stop-loss.
Trade in trend
Trade in the trend seems often to be the easiest task. We all know the old indisputable truth: «the Trend is your friend». But entering a position not in the beginning, only that the emerging trend usually looks problematic and dangerous for the majority of investors. The reason is hidden in the psychological barrier arising from the majority of the people from the exchange community, who are struggling to revise their views on the current trend. When started rising prices after descending movement all waiting for the crash, so happy to sell, and any decrease in the uptrend all seem to think that prices will go higher, and why everyone is ready to buy at each correction. That's why most investors are buying almost at the top and sell almost at the bottom of the market. In the middle of the trend often occurs tranquility investors, they almost completely disappear concern about the safety of the profits accumulated in the trading accounts.
Purchase rising and sale in descending trend the majority of traders are not coincide with the rhythm of the market. Please note, we do not consider the cases, when the trade is created in the moment of the birth of the trend. We are now talking about how to behave inside the trend. For this situation the best ways of entering the market are based on the use of trend lines with the use of support or resistance, defined by the last completed movements. So, here are the two best point, allowing to enter the trade with a high probability of success for a relatively small share of risk in the market trend. In each of them implies the use limit orders, and only occasionally - market, if there are reasons to believe.
Buying from the uptrend line at the third contact. The upward trend is determined when rates rise. We have the opportunity to draw a line with a slope up. This is carried out in two consistently rising grounds of price bars with the absolute bottom relative to at least two previous and the next two bars. The best time to enter the market occurs in the third touch rates trend line. At this point, of course, you have to buy - and only buy (Fig. 1).
Using this technique, it should advance to find out the price levels that may be different depending on what time will happen prices contact with the trend. The best option is to use daily charts, where each day will have its price level. A more accurate alignment can be carried out using hourly or 30-minute charts. But it is necessary to take into account the real possibilities of the software, as poor quality can greatly distort the forecast, give incorrect price levels for entry.
For this orientation, the trend lines have a negative impact on trade of false punctures, creating the illusion of breaking through the trend line. Unfortunately, to admit the truth or falsity of a breakthrough cannot be until the bar, breaking the trend will not disappear and will not start haggling following (figure 1 provides just such a case: in day rates falling below the trend line, but closing above confirmed the strength of the bulls). As a rule, if the trend is strong, then the closing price is returned to him, and often you can see that the closing price is almost exactly on the trend line. The chances of a successful purchase only increase: even if the break in the lower part of the market and will, something happens it is not today, and the market will fluctuate around this point, showing alternately force then weakness. The pace of price movement developing in the direction opposite to the main trend, are rarely a symptom reversal, but rather indicate a wait-and-see policy of the bulls, who are confident in their strength, and not wishing to earlier time enter the playing field.
Sale of the line of the downward trend in the third contact. This point is the mirror reflection of the trade at the point 1. Accordingly, the behavior of traders exactly the opposite is the opposite - it should sell in the third of the contact of the prices downwards trend conducted on two consistently declining price heights reached by the market. The choice of these peaks is simple: we need the local peaks, characterized by the fact that the prices are elevated in comparison with the maximums of not less than two preceding or subsequent bars.
the Exact price to enter the market each time changing, over time it becomes lower. Of course, it is best to use a daily scale, but it is also manifested in the hour and half-hour charts. Falsity or the truth of punctures, as and when the upward trend, it is best to reconcile upon the adjournment of the regular price bar.
Trade at the break
trading Strategy breakout prices through substantial levels are considered the most effective ways to control trade positions, offering a high yield. Often they are associated with stop orders is executed directly at the moment of breakthrough and provide an opportunity to occupy a position in the very beginning of the growing price momentum. This is all true, but in many markets, stops are not too practical, and often even dangerous for the trading account, so this way is not always justified. For breakthrough strategies variations of entering the market with the help limit orders will provide a large profit at relatively low risk. Presented here are the options - the most effective ways to trade with a breakthrough, the act preferably at the time of correction.
Buying from support in the area between the penultimate peak and the first of Fibo-levels last complete market movements down. In the growing market, we often see prices move up, developing a zigzag pattern. As a rule, in the first third trend, when he had already delineated and the bulls went to the serial offensive, the bears are still a serious force, so they can often after every price spike upward reduce prices so that they fall to the level of the penultimate peak. Sometimes drop here is terminated, followed by a new movement upward, pushing prices higher. But the market is not the place where all the markup are on their places, so at the last summit rates can not find support, falling even lower. If the trend is strong, the depth of the lower rarely exceed 23%, and rarely - 38%level of last fully complete market movements down.
this zone is limited to the penultimate vertex and 38%level for the last completed movement downwards, is наиболееблагоприятное place to make a purchase. Figure 2 shows the search terms for purchase within a month after the action has increased in two times).
Sale of resistance in the area between the first and penultimate base Фибоуровнями complete market movements upwards.
As with points 1 and 2, point 4 - the mirror similar point 3, which is designed to lead us in the trade on the short side when prices return adjustment to the top. On the market, gathered fall, breakthroughs are often defined at the moment of crossing the levels reached in the previous price lows. Quite often, especially in the early stages of the emerging trend down, the recovery of the market raises rates to the level of penetration support with possible punctures above. Here is the place where you have to sell. To define more exactly the zone of resistance will help Fibo levels, of which work best 38 per cent. Sometimes a good help is the level of 23.6%, indicating the apparent weakness of the market and its readiness to go down. Figure 3 shows how to apply the rules: A level determined on a price point of the base 1, level b - 23.6% interval 1-2; level C - 38.6% interval 1-2.
Purchase of a counter-trend, which is the descending trend, it becomes practical, if rates are upwards, fixing to close in the selected time scale above the trend line. Scenario for this option usually is to begin rates go through the trend line, fixed above, and during the correction down to him from above. The trend line, previously played the role of resistance, there is support. It is one of the most beneficial points for purchases (Fig. 4).
Additional confirmation can always be obtained by the method of determination of the depth of the correction with the help of Fibo-levels. This technique allows you to weed out the deceptive movement that creates the illusion of a trend change, and to understand whether to buy the trend line or better to wait for clarification of the situation.
Sale of kontrtrenda. Sale of a counter-trend, had previously worked as an upward trend played a supporting role, and after his penetration prices down into resistance, is quite logical move. This method is very effective and refers to the extremely effective ways classes advantageous position on the short side of the market (Fig. 5).
Confirmation of the truth of the breakthrough we again can give Fibonacci levels. If the upward trend turned into a resistance, and near it there are the levels of correction, the chances for successful sales soar. Even if we make a mistake, there is the possibility to leave the position without losses, as the market generally tends to rotate some time around break points before deciding where to move further.
Trade in a sideways motion
Trade in the sideways movement of the market to many seems to be quite dangerous and ungrateful thing. Attempts to apply the strategy of breakthrough perform poorly and are often develops in about such a plot: following completion of a stop-order prices for some time are moving in the right direction, and then turn around, bringing investor result in losses. Buy from the lower limit of the trading range and sell in the upper field by only a few too significant psychological stress, because for the most part have to trade against the trend. But there is one strategy, which is extremely efficiently works on the stocks, futures or currencies which signified their trade corridor and started on it movement.
the procedure is based on the simple fact, which shows that in the trading range of any increase above the boundary separating it half in the market increases and tends to growth. At the same time, any reduction below this line leads to a weakening market, acquiring bear properties. Thus, it allows the use of this border zone between the bullish and bearish market for short - and medium-term trading.
Trading from mid-range. Rules for use of the border zone are:
to Buy when the market rises above the middle (50%correction) of the last complete market movements.
Sell when the market falls below the middle (50%correction) of the last complete market movements. This technique is poorly applicable to trade with the time-frame over several days. Rather, it is suitable for intraday trading and for the cases of holding a position of not more than 2-3 days. But the analysis in any case it is necessary to carry on daily and even weekly schedules.
to Identify 50%of the border one, or better yet - two successively traced recently closed market movements usually not a problem, but the question remains: «That you can use to obtain confirmation?» Unfortunately, the simple answer is - usually near the border zone is little indication certainty of future events, and the market in General looks ready to move in any of the parties. So to help understand how one should act, may only view the behavior of the market at the time of passing the boundary separating the bullish and bearish sentiments, including changing its character at this critical moment. Fortunately, the possibility of online trading make this even without resorting to the conclusion prices on schedule. Enter the trade on this method is consistent exit point, which suggests identified trading range, where the position it makes sense to close. Other options imply the exit near any of the Fibonacci levels, depending on the types of profits and potential losses. An example of such trade is shown in figure 6.
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