We will identify volatile market for
forex trading:
Bollinger bands: very wide or visibly
wider compared to last flat period.
CCI: levels of this indicator are far
from 0 line and changing consistently to any direction.
RSI: levels of this indicator are below
40 or above 60, changing direction. We avoid trading if it stays
somewhere around level of 50, as it indicate price consolidation or
flat market.
Scenario 1 – moderate swings
Open buy:
(1) EMA5 crosses EMA10 from below to
upper direction, (2) RSI crosses 50 line from below to upper
direction and (3) Stochastic direction is up or just changed
direction to up.
Important: if Stochastic indicator
meets buy conditions, one of (1) and (2) conditions are met and other
are close to these conditions buy order also should be opened.
Close buy:
(1) EMA5 crosses EMA10 from above to
lower direction or (2) RSI crosses 50 line from above
to lower direction or (3) Stochastic
crosses level of 80 from above to lower direction.
Open sell:
(1) EMA5 crosses EMA10 from upper to
lower direction, (2) RSI crosses 50 line from above to lower
direction and (3) Stochastic direction is down or just changed
direction to down.
Important: if Stochastic indicator
meets buy conditions, one of (1) and (2) conditions are met and other
are close to these conditions sell order also should be opened.
Close sell:
(1) EMA5 crosses EMA10 from below to
upper direction or (2) RSI crosses 50 line from below
to upper direction or (3) Stochastic
crosses level of 20 from below to upper direction.
Scenario 2 – seeking for extremes
Open buy:
(1) Price candles became far below both
EMAs and current current candle touches EMA5, (2) RSI reached level
of around 30 or less and is reversing upwards and (3) Stochastic is
below 50 line and it‘s direction is up or just changed direction to
up and (4) CCI reached level below -100 (optimal if below -200) and
is reversing upwards.
Important: if
Stochastic indicator meets buy conditions, one of (1) (2) and (4)
conditions are met and other are close to these conditions buy order
also should be opened.
Close buy:
(1) EMA5 crosses EMA10 from above to
lower direction or (2) RSI crosses 50 line from above
to lower direction or reached level of
about 50 and reverses downwards or (3) Stochastic crosses level of 80
from above to lower direction.
Open sell:
(1) Price candles became far above both
EMAs and current current candle touches EMA5, (2) RSI reached level
of around 70 or more and is reversing downwards and (3) Stochastic is
above 50 line and it‘s direction is down or just changed direction
to downwards and (4) CCI reached level above 100 (optimal if above
200) and is reversing downwards.
Important: if
Stochastic indicator meets buy conditions, one of (1) (2) and (4)
conditions are met and other are close to these conditions sell order
also should be opened.
Close sell:
(1) EMA5 crosses EMA10 from bellow to
upper direction or (2) RSI crosses 50 line from below
to upper direction or reached level of
about 50 and reverses upwards or (3) Stochastic crosses level of 20
from below to upper direction.
 |
| Forex trading with Volatility Market |
First trade we missed quite nice
trade oppurtunite, because Bollinger Bands indicated flat market.
So we start with the first trade: this
is moderate swing trade, CCI and Stochastic confirmed the trade,
while RSI and EMAs were about to confirm the trade on past candle, so
we enter at the next candle opening. Exit confirmed by stochastic.
Second trade: market became
volatile, indicated by bollinger bands. In thi case we see CCI and
RSI extreme. We enter trade on next candle after the signals are
confirmed. Exit is indicated by RSI crossing 50 line upwards.
Third trade: Bollinger bands and
CCI indicates trending market. CCI comes close to level of 0 and RSI
crosses 50 line down and then crosses back upwards, while Stochastic
and EMAs confirm the trade. Exit is indicated by Stochastic.
Fourth trade: all indicators
indicate moderate swing trade, while Bollinger bands stays wide
indicating volatile market, so we enter at the next candle. Exit is
indicated by Stochastic.
Fifth trade: here we see either
„seeking for extreme“ moderate swing trade situation. Seeking for
extreme situation suggests entering the trade one candle earlier,
although entering later would still be profitable. Exit is indicated
by Stochastic.
Sixt trade: the trade is still
running as I am writing explanation now. This is normal moderate
swing trade, all indicator confirms that so we enter at the next
candle after confirmation.
Between trades 2 and 3 there is quite
confusing situation. All signals are likely to confirm buy trade,
but: Bollinger bands indicates trending market. But in trending
market for a possitive trade, we need CCI to stay around level of
100, not being in extremes few candles earlier. In this situation we
see that CCI just recovered from extreme of over 320, so it is
dangerous time to take early trade. Anyway, if by mistake we would
have taken this trade, the loss would be minor, compared with all
other profitable trades
إرسال تعليق