The role of aspect ratio when using technical analysis

The role of aspect ratio when using technical analysis

The most common type of analysis is fundamental for 95% of active traders, is a technical analysis. This type of analysis is based on several postulates, such as frequency of occurrence of history and inertia, the price trend. All these laws were still in the Dow theory, which is a technical analysis in its pure form. Analyzing the schedule with the help of "technology", the trader is looking for specific patterns, which, in fact, are the most repetitive mikrostsenami stories that have been dealt with in the first postulate. Analyzing the behavior of prices in the time interval, which manifested a particular figure, as well as looking at a news background, in which it happened to form, it can be very accurate conclusion about the future behavior of prices.

The success of trade in the global forex market has many components. This psychological side, and technical training for the trader, it is specific, intuitive moment of foreboding, which gives many years of practice. Perhaps, it is difficult to enumerate all the elements of success, but, judging from a purely mathematical point of view: - the success of the transactions is determined by only two parameters, which in contrast to the above can be clearly expressed numerically. This is a chance of a positive outcome of the transaction and the amount of risk. The interaction of these two variables determines the resulting trend of commercial deposits. Thus, the whole diversity of approaches to forming a market strategy can be reduced to the two components: policy management of capital, or otherwise - risk management and improve the reliability of forecasts. If the first point about risk management is quite clear, that is with certainty not so simple.

In fact, recognizable form of familiar graphic pattern remains practically nothing. The famous "Head-Shoulders", all kinds of "triangles" in addition brought them arrived, known for its antithesis, the outside of them hardly distinguishable, but augural opposite market movement. Therefore, the "Head-Shoulders" is called, for example, "fig", with the unfortunate property regenerate in the body to continue the trend - Streamer. From "rebound" and the spines are not all the pure, they are reborn time and again in "Leap dead cats, which died on the fly (in the case of bull's model), and falls down, and not utsepivshis for branch-cherished goal.

As a trader comes to the practice of understanding the differences of these figures and on the extent to which this understanding will come sooner, depends the fate of the deposit. A case is, as it turns out, not in the form of graphics. Then it was all too easy. In practice, the outcome determine the ratio - the ratio of segments of motion and their duration. In compliance with the strict proportions "implicated" is not a market theory, giddy success brought its creator. Use the same mysterious Hanna (William Delbert Gann), who was third in the United States iron plane. Actually, at that time, in the U.S., there were only three. For all the career statistics of its transactions is that for some sources are already profitable (!) 97%. We know that his theory was based on numerology, but the key points he kept secret and only told his disciples. In the life of this man was very much associated with magic numbers, and he not only "the movement of the market, but the key date of their lives. The date of death, in particular. He died at the age of 77 years, commanded his disciples to burn memoirs and notes. The Mystery of the effective ratio of market thing with him.

But the very fact that the success of trade is defined proportions, is undeniable. One of the attempts to bring the market turmoil to a common denominator is the use of graphic methods based on the Fibonacci numbers. However, in some cases, the method does not give the expected results. While there is no single recipe for a strike that was the feeling of the correct proportions, so this skill is the fate of those who have long engaged in the exchange trade at the professional level. This approach gives the unconscious habit, and produces a moment of intuitive hunch.