Posted on 11 May 2012
Tags: Bollinger band, bollinger bands, bounce, breakouts, candles, decisions, Different, direction, dots, future price, histogram, Horizon, horizontal, Identify, important, important tools, kinko, MACD, market trends, market volatility, moment, momentum, movement, moving average, moving averages, overbought, parabolic sar, pips, relative strength index, resistance, RSI, signals, squeeze, Support and resistance, time consuming, trend reversals, Trending, understanding
Good trading decisions are based on the right use of several tools under different situations. Bollinger Bands, MACD, Parabolic SAR Stochastic, RSI, ADX, Ichimoku Kinko Hyo are some of those very important tools.
Bollinger Bands
Bollinger Bands is a market trending tool which gauges market volatility. Bollinger Bounce is a strategy which assumes that prices always attain the centre level of the Bollinger Bands. Hence, Bollinger Bounce works best in markets when prices are ranging rather than following a single trend.
Bollinger Squeeze is a strategy through which you can identify breakouts beforehand. It simplifies to understanding that breakout always follow subdues market activity. After the breakout, however, one can trade on the side in which prices have made their breakout.
MACD
MACD helps in figuring out market trends early. It makes use of 2 moving averages and a histogram to calculate the distance between two moving averages. The only problem with MACD is that it is too time consuming to use so many moving averages.
Parabolic SAR
Parabolic SAR stands for Parabolic Stop and Reversals. As the name suggests, it is a useful and easy indicator to indentify spot trend reversals. Understanding this indicator is easy because it clearly represents sell signals and buy signals through the movement of dots above or below the candles.
Stochastic
Stochastic is a useful technique through which one can make out overbought and oversold conditions. The movement of moving average lines above and below two values of 20 and 80 signal overbought and oversold conditions. When moving average lines are below 20, the market is oversold and should look towards buying. If the lines are above 80, the market is overbought and should focus on selling.
RSI
RSI stands for Relative Strength Index. RSI works in the same way as Stochastic to spot overbought and oversold market conditions.
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Posted on 01 August 2009
Tags: algorithm, Algorithmic Trading, Algorithmic trading in foreign exchange, Australian dollar, Bollinger band, buying, Canadian dollar, commodities, Currency Rates, currency trading, economic changes, Electronic trading, financial consultancy, foreign exchange, foreign exchange market, forex, Fundamental Trading, Fundamental trading in foreign exchange, FX, FX market, FX traders, overbought, oversold, potential frauds by the broker, price movements, regulatory changes, relative strength index, RSI, selling, statutory changes, Technical Analysis in Foreign Exchange, Technical Analysis trading, technical indicators, traders, volume spread analysis, VSA
Here I will explain you about algorithmic trading , fundamental trading and technical analysis in foreign exchange.
Algorithmic Trading in Foreign Exchange
In the FX market Electronic trading is growing, and nowadays algorithmic trading is becoming much more common. As estimated by financial consultancy Celent, by 2008 up to 25% of all trades by volume had been executed using algorithm, which has been increased from about 18% in 2005.
It is required for an algorithmic trader that he should be fully aware of all the potential frauds by the broker. A check should be included in part of the weekly algorithm to see if the amount of transaction errors at the time when the trader is losing money occurs in the same proportion as when the trader would have made money.
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