Applying a trading system can be simple or complex but you have to start somewhere. Here’s how one trader combines elements of different types of trading styles to create a trading strategy that outperforms his previous trading strategies.
I came up with a new trading methodology, which I will introduce in this article. I refer to it as fusion trading—a term I came up with—for quick reference. I use it all the time but you won’t find it listed on Wikipedia—not yet, anyway. Neither will you hear the word fusion on Wall Street, unless you bump into one of my graduates. Though the term is something I came up with, the framework of my sys-tem is not new. The fusion method is implemented by most professional daytraders, especially countertrend traders, like me.
Continue reading The Power Of Fusion Trading By Josh DiPietro
If you had the opportunity, why not learn a thing or two from those who have already figured out what works and what doesn’t? Here’s a chance to soak up some wisdoms as one trader shares lessons he learned as he traveled along his 30-year trading journey.
when I first started out, I taught myself fundamental analysis and then added technical analysis, so that today I use a comfortable blend of approaches. My trading activities allowed me to retire at the age of 36. That was over 20 years ago. Let me share four trading lessons I learned along the way.
Continue reading Four Lessons From Three Decades Of Trading By Thomas Bulkowski
Does it make a difference if your domestic currency is the first currency or second currency? It sure does, and it affects how the currency is valued. Here are some different scenarios you can encounter and how you can calculate the pip values in each of these situations.
prior to opening any live positions in the FX markets, it is advisable for traders to fully understand how to calculate pip values so they know their positional risks and can determine appropriate position sizes. Because currencies are traded in pairs, for example, the EUR/USD, the pip-value calculations will differ according to a currency’s placement within the pair structure. In other words, pip value calculation will differ according to whether your domestic currency is the base currency (first currency) or quote currency (second currency).
Continue reading Calculating Pip Values By Karl Montevirgen
Three parties are involved in trading: the buyer, the seller, and you. Your behavior and actions play an important role in your trading results. Here’s how you can use them to your benefit. Our behavior and actions—not the market’s—are the catalyst that drives our results. The market is a strong force that is beyond anybody’s control. Successful trading can be achieved through personal determination, a disciplined trading lifestyle, and perseverance. It sounds easy, but if it were easy, there would be a higher success rate among traders. Why are 90% of traders unsuccessful? Does it have to do with their psychology?
Continue reading The Trader’s Psyche (Nothing More Than Feelings) By Solomon Chuama
J. Welles Wilder’s classic relative strength index has enjoyed a large following of technical analysts over the years. Here’s a slow version of it.
The slow relative strength index (SRSI) is a momentum price oscillator that measures change in price movements relative to an exponential moving average (EMA). Like the relative strength index, it oscillates between zero and 100. SRSI is considered overbought when above 80 and oversold when below 20. SRSI can also generate signals by looking for divergences and centerline crossovers. Sounds similar to RSI, doesn’t it? It is, and in fact, I use Wilder’s RSI formula to calculate the SRSI.
Continue reading The Slow Relative Strength Index By Vitali Apirine
Planning your trading strategy requires a thorough understanding of the market you wish to trade. If you’re going to trade the forex markets, the first step is to understand how certain markets are interrelated. One of the most important relationships to watch in the currency markets is how the various pairs and crosses are correlated with price movements in commodities especially. A correlation is, as the name tells us, a relationship between two things. In the financial markets, correlation means that an equity, currency pair, commodity, or market moves predictably along with another. Correlation can be positive, in that when A moves up, so does B; or it can be negative, meaning that when A increases, B decreases (and vice versa).
Continue reading Trading Forex: Planning Your Strategy By Imran Mukati
As technical traders, we must always consult the market. Here’s a method that sets clear support & resistance levels and can be used to trade futures, equities, and forex pairs. In this article I will attempt to give justice to the outstanding observations about market movements made by Seiki Shimizu in his book The Japanese Chart Of Charts. Shimizu’s text documents expected price movements following a particular candlestick shape.
Continue reading Candlesticks And the Haguro Method By Gary Burton
Knowing when to exit a trade can work wonders for your trading returns. Here’s one tool that can help you make that critical decision. It was a very hot day in September and I was at a pri-vate lunch meeting with the CEO and CFO of a legal consulting company. They were making the rounds to encourage well-heeled investors to consider investing in their company. Their stock had a high market cap but a low daily turnover, which for most money managers, is a criterion that brings up a caution ﬂag.
Continue reading Sell With Conﬁdence: The Green Line By Ron Jaenisch
We’re groomed to think of losses as a sign of failure, which is why trading is difﬁcult. But experiencing losses is part of a trader’s life and is something you have to accept. Here’s how to approach the idea in a healthy way.
To others, being wrong is a source of shame; to me, recognizing my mistakes is a source of pride. Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes.—George Soros
Continue reading Failing Successfully By Stella Osoba
Since you are likely using sampled data when trading, there is a chance that there could be some distortions in the data. Here’s what you can do to avoid those distortions.
Imagine that most traders consider the price data they use for analysis to be a continuous function. Nothing could be further from the truth. And, depending on your trading style, the impact of this assumption can range from trivial to dramatic. The fact is that the data is sampled data. The sample rate is once per day on daily bars, once per hour on hourly bars, and so on. It doesn’t matter if you average the high, low, and close; you still only have one sample per day on daily bars.
Continue reading Uncovering Hidden Truths: Aliasing By John F. Ehlers