Open positions in the spread pattern

Open positions in the spread pattern. Theory uncertainty

A risky act will always be appreciated at its true, anyone who tries not to risk going to die and did not know the price of sweet victory.

Until then, we have heard a lot of different ways of entering the market, all of them, each in its own way, given a guaranteed method of entry into the market. In this article we wish to consider a new option that is entering the market with the trend spread, the ability to spread open. So, first of all, I would like to draw your attention to the following, which catch the "peak", ie the highest point, the task is not quite so simple, even we can say is very difficult and sometimes impossible.

The challenge of entering the peak, the catch is that the peak maximum or minimum at broadside trend is very vysokoriskovannoy procedure. See Figure 1:

Figure 1 Figure EURUSD changing trends and the identification of maxima fracture.

Pay attention to the daily schedule for the EURUSD, the figure number 1, and in particular, to the turning direction of the rising trend or downward trend. Max or minima are marked by red crosses I have to learn the importance of prices in these locations, we had a horizontal line, which will be convenient to navigate within the meaning of prices and its components. This is precisely such moments we try to describe in this article and analyze the method of entering the market in order to catch the trend, with higher probability from entry into the market.

As we know every trader dreams that successfully enter the market, but the more he dreams of learning to catch it turning points and trends to go dry from the water, in the event of a change in trend. If all things were easy, everyone would do so and, accordingly, the market would not unfold. In order to learn how to enter the market, especially, need to change their views on the situation occurring in the district. That is, it is necessary to force yourself to think individually and not try to do, as do all. In fact, in itself, the time of entering the market during the period of change trend is very risky, and therefore, in the case of attempts to determine the trend, ie the direction of the trend can often overstay in one place and take no action, determining the direction of the trend. In this case, turn to catch up is impossible, because when you have to be defined trend lines of the market is already very late. Therefore, from this we can conclude that in the case of attempts to catch the maximum price change in the direction of the trend seems almost impossible, or in other words one can say that the probability of such a transaction would be approximately 20%. There are some methods that can increase your chances of success in such attempts. It is possible that over time they will become your constant companions, and you will be guided by this theory at work in the market.

Figure 2 the change of trends, a schedule for the day time on the EURUSD.

Look at Figure 2:

The following figure we have marked three points, which can be described as peaks in the change of the trend. Point number one signals the descending trend, despite the fact that the previous short-term trend could be called bottom-up. Point number two is the point of maximum change in the direction of long-term ascending trend, pay attention to the horizontal line running radius of the point number two, this line intersects the two bottom-up peak at two, and then change direction of trend occurred at a time . The appearance of such peaks may be due to a variety of external factors that cause, some kind of uncertainty on the part of large and small traders in the market. Consequently, the uncertainty of its traders allowed us to use two attempts to enter the market. But the point could be two and three and a peak at the third turn of the trend would not only go on a global direction, but also set the lateral direction of the trend. Foresee such a possibility, it would be very difficult. Three-point minimum price rollback a short-term trends on the global trend and the point of fracture, after which the direction of the trend is changing radically, before taking the previous direction that was set a global trend. Each of these points has a very great interest to our study, because these points and will be our goal at the entrance to the market.

First of all, I would like to draw your attention to the risk of financial transactions by the transaction at the opening of the warrants, at the time of maximum or minimum recoil.

By looking at Figure 3:

Figure 3 year schedule for 2002 -2004, EURUSD number change trend direction for a given period of time.

Drawing attention to the figure, we can safely assume that the probability of the observed trends you turn around once every five months. This may suggest that the trend may change as in the opposite direction, and define the lateral movement, which in turn reduces the chance of determining the qualitative trend in the number of times. Now suppose a high risk of finding such a maximum or minimum in the spread pattern. But our task is not to talk to you about the immediate risks and that you can not do this, the aim is to show how you can maximize the likelihood of a successful login, using the theory of uncertainty set out by us.

The very name of our theory says much about how to warn you that the process of finding the point of entry is very uncertain, but the probability, so we try to proceed according to the probabilistic assessment in order to increase your chances. Given the previously described method of work in the market and the consequences under probability assessments, we can assume that the main task in finding the maximum or minimum, ie a peak at the entrance to the market is to "further" thinking. That is, in other words, to learn to identify a stable peak spatial reasoning must be set for several months in advance. All this can greatly assist you in determining the direction of the course. Do not think of everything, I suggest to review only in accordance with his vision, as a rule, the one who successfully establishes a maximum price or a minimum when entering the market, he does it in advance. How to anticipating the situation.

The theory of uncertainty:

Trader seeking turnaround trend and the time of entry into the market must rely on their common sense, as a rule, the decisions taken by the entrance to the market much sooner than is determined by the trend. To maximize their chances to be guided by the following factors:

1. Early analysis of the fundamental factors for several weeks in advance, taking into account the previously announced figures. In the case of a strong correction to the global trend played an important role as fundamental factors of the economy of the country, the currency which is traded on the market. Here is a list of important fundamental factors that should be disregarded in the change of the trend. As a general rule, if a significant change of these factors on the market may be of concern.

1. The trade balance deficit.
2. Balance of payments deficit.
3. Indices of inflation: consumer price index and wholesale price index.
4. Gross national product.
5. Unemployment.
6. Data on money supply.
7. Election of the president or parliament.
8. The size of retail sales.
9. Housing.
10. The value of orders.
11. The index of production prices.
12. Performance.
13. Indices of stock.
14. Deposit rates.

The above factors may significantly warn you of an impending change of trend. In the case where the data goes against the fundamental analysis of prices and in the analysis in the future as there is such a phenomenon can be assumed that after some period of time may be counter-trend. In this case it is necessary to proceed to the analysis of a technical nature to identify more specific points to enter the market.

2. In the analysis of technical indicators can be tested any equipment you think. We, in turn, are guided by the following indicators: MACD, RSI, Stochastic, Moving Average. The combination of these indicators at different time periods allows you to easily enter the market and go on without a loss in the event of failure analysis.

3. And, of course, do not forget about money management when investing. That is not immediately invest a large sum in the event of a successful analysis of just gradually invest certain amounts in the market. This will allow you to protect against large losses.

A good trend you!

President and Managing the international hedge fund
AlMaz Hedge Fund Management
Alexander M. Mazurkevich
www.Mazurkevich.Com

Successful Intra-Day Traders

Being neutral to the profit and loss
You probably know people for whom the world merknet when they take a loss of $ 100, but if they earn $ 1000, you are at the top of the world. Definitely they are not neutral. If this applies to you, your intra-day trade, almost certainly, is controlled by fear and greed: reduced by $ 100, you probably do not want to take a loss just because you know that will suffer emotionally. Rising to $ 1000, you would like more, even if you must, just, take profits. Or you can take profits too early, because they fear that the position could turn against you. All this is not a good intra-day trade.

Professional intra-day traders do not permit daily fluctuations in their bills, disturb them. The results of one week is not important, do not even have the monthly results. This is only a small episode in their trading career. Daily variations actually have little meaning.

Emotional ups and downs is quite normal for beginners intra-day traders. If these emotions affect your shopping decisions too much, it is advisable to go back to trade on paper, in order to acquire confidence. You should not allow these fluctuations to overly influence you.

Being neutral to the price movements
You probably familiar with the situation when the trade goes against you and you start looking for reasons why it is still a good position and you should retain it. This is very dangerous for the intra-day traders, because it leads to their feet and big losses.

strategies in the trading process - the worst thing you can do. You can always find justification for their position to go up or down, but you do not see an objective price movement. You have moved from response to the anticipation! Within-day trader must not, under any circumstances, try to predict future price movements.

As the intra-day trader you must play on the actual price movement rather than on the motion, which must be! Please leave predictions to investors, you will sell during the day.
Most intra-day traders are included in the position, based on fundamental data. They mixed intra-day trade with the investment. It is also very dangerous. At the time, as may be reason to enter the position for the short-term trading, they regarded it as an investment, even if it goes against them.

Consider the famous example of
Think of "Enron".
Yes, were moments during the sale of "Enron", when the purchase was justified. Some bought Enron during the short recovery of $ 8.5 to $ 10. The problem is that if you base their entry on the confidence that the company is cheap and it should go up, you will be more and more inclined to hold their position or even add to it when the price becomes lower. The stronger your opinion about the market-based instruments, the harder to make decisions based on actual price movement.

Within-day traders do not have to do this. We strongly advise you to have a separate account to trade on fundamental data. In intra-day trade with the big lever, you could be tempted to take risks that would be too high!

We are not saying that bad to have expectations, trading within the day: everyone should know what the potential outcome of his position. If these expectations, however, is not true, within-day trader must recognize and respond according to what is actually happening.