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Strategy and methods of search of days of a trend.

Strategy and methods of search of days of a trend. Dwain Ross ★★★★★

Strategy and methods of search of days of a trend.



That day during which there is an expansion of daily trade range and the prices of opening/closing are located on various ends of this range, adjoining near the greatest and small values for trade day, is called day of a trend.


During the whole trend day of the price reach everything new and new maximum/minimum values. At the end of the day volatility increases that is one of characteristics of trend days. It can be directed as towards the main trend on day schedules, and against it. In trend day the main thing is that growth of trade range and increase in a difference between minima and maxima gives a certain chance in generation of profit for a small period.


Essence of change of trade range

Can point several signs to emergence of trend day, but the most frequent of them are decrease in volatility or trade range. In the sequence of the lowered/increased volatility some recurrence is observed. The market is in a condition of fluctuation between the moments of calm and the moments of its movement up/down. Volatility of the market is more subject to recurrence, than its prices.


When the market is quiet, there is some balance between transactions on purchase and transactions for sale owing to what, trade range becomes less. If on the market new information begins to filter, then it destroys the settled balance of the prices and the market begins to look for new areas of the prices.


In this case open positions, both short, and long get to a trap as are on the party which is opposite to the direction of the market that in turn forces them to close. Thus, it creates visibility of a disbalance between inflow of funds for the market and their outflow.


Such impulsive jumps in prices attract new participants of the market that in turn creates a vicious circle. Those traders who trade on local extrema and notice the unidirectional movement, begin fight of closing of positions.


As there is a reduction of trade range, we can understand when the market comes out a phase of tranquility and will begin the movement. We see that us, perhaps, the new break waits. To understand most difficult it where the break because still there is a communication between sellers and buyers will be directed. The only thing that we can make, so it to be ready to future growth of volatility of the market.


It is a lot of strategy which are based on breaks, can define the direction of an entrance on the market only after the break already takes place, and the market already knows where it wants to go. Such technology of trade does not allow to define turn points, but allows to be more confident in the direction of the movement of the market.


Trade techniques

Trade techniques which use technology of breaks also of the system of trade which follow a trend which is defined within the present day most of all are good at trade of trend day. Therefore it is required to wait until the market is defined where its further movement will be directed. For this reason the main number of the trading systems can instruct for an entrance on the market, only after the market begins the movement in this or that direction and that, only when passing a certain distance.


We advise you to use such techniques, and they will give you the chance to work successfully at the market during the trend day.


There is a morning trade range. It can be determined as a difference a boundary by a maximum and a minimum in the first 1-2 hours from the beginning of the auction. Of course, it is possible to use any other intervals of time, but nevertheless it is desirable to use one hour. Having decided on morning trade range, place the buy stop a little above a maximum of morning trade range, and sell stop is a little lower. If you already opened the position, then place stop-and-reverse (stop and a turn) on the opposite end of range of trade.


The big movement of the price in the first 15 minutes after opening of the market is called "an early entrance". There is a high probability of the movement of the market at the same direction. If during these 15 first minutes on graphics appeared two very high 5 minute bar, then you have to be very quick to have an opportunity to enter on the market during that pause which usually takes place.


Many such trading systems have a risk very big, but it is all the same necessary to pay attention that with increase in market volatility also that profit which can be received from this raises.


Exit techniques

Among easy and widespread ways of an exit from a trend is such as exit when closing market. It is possible to designate the trend day closed on an extremum opposite to opening ideal. Such method gives the chance for the trader to remain in the market full trend day, without risking to postpone a position to night. Next day, most likely, will open with a gap in the desirable direction. From it the exit technique at opening of the market of the next day proceeds.

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