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.

I raskazhu you receive one, which allows to significantly reduce losses
and even make the system unprofitable profitable. But всетаки for use
I would recommend to find or create a system in which the ratio of revenue and
loss-making transactions will be at least 50 to 50.
how to use this method for example. For example, you
decided to buy gbpusd. The first transaction was called the Market 0.1 fathomable. Furthermore
exposed sediments of a warrant for the 20 points above the current transaction. Lot 0.1. And
presented a warrant for 40 points over the first transaction in the same lot. Teika
Profit for the three positions put on 20 puntktov of the last orders
set on a course dvezheniya. Instead, the stop loss is exposed sediments
order below the first position on 40 points. The size of the lot for a 0.4. You can
change the size of the lot, but the ratio should ostovatsya, ie tiri warrant for
course of motion shall be installed with the same lot, but in order
opposite side of a large double lot, compared with two Lolotoe
warrants in the course of movement.
How does it work? For example the price went against you and you have a position
opened at the beginning of 0.1 lot, worked a warrant in the opposite direction and the price
went further, as the price was only 14 losses resulting from incorrect
open positions overlap, and all entries must be close. In
rezultpte you in the overall cases were published in bezubytok. Opened the second position,
pull the back position to the level of the first and
Price unfolded, worked a warrant in the opposite direction, the motion must be
14 points to cut losses. Once off the losses, closing
position and remove all pending order. Worked for two additional
warrants in the course of price movements and unfolded. Once sumarny income
three open positions will be equal to zero, closing all the positions and removing
pending order in the opposite direction. We escaped the damages. Third
case the price came to take profit, we received 120 points profit to 0.1
lot.
Important: if a warrant has worked in the opposite direction than for gonites
profits, cut losses and all. Step between the orders can be adjusted to
your system. For a warrant necessarily place a stop loss level
the first order.