Category: Money tips Release Date: 2006-05-17
Triple filter indicators and trading cycles to resolve the existence of conflicting contradictions.
First, in the long-term trend indicators on the chart used to make strategic decisions. - This is the first re-filter. Then in the middle of the chart on the use of oscillating indicators to determine the entry points and exit points. - This is the second re-filter. Triple filter theory provides several ways to set the single-long-short trading. - This is the third re-filter, we can use the middle of the chart or short-term charts to arrange for a single transaction.
First select your favorite trading cycle, the cycle of mind this line is defined as the middle period. And then multiplied by the length of this cycle five times to be a long period. In this long-cycle trend indicators used to develop strategic decision-making, determine to do more, short, or wait and see. Wait is a reasonable approach. If long-term charts to see more or to see empty, then return to the medium-term chart, with the oscillator to look forward to a long-term trends in response to the direction of entry points and exit points. Before switching to the short-term chart, set up stop-loss and profit target bit, if possible, fine-tune a good entry point and exit points.
The first re-filter
Choose your favorite trading cycle, and it is defined as the middle period. It is then multiplied by five times the length to arrive long period.
If you choose to cycle on-line as an intermediary, then immediately move the attention of contour, that is your long-term chart for analysis. In this decision-making process, not allowed to look on map, because it will affect your weekly map analysis. If the day trader as the middle of the 10 minutes figure cycle, attention must be immediately moved to the hourly chart. Hours and 10 minutes five times the figure that the 50 minutes figure slightly different, but affect the overall situation, after all, trading is only a craft, rather than an exact science. If you are a long-term trader, you can choose as intermediate contour charts, and to on-line as a long-period. In the month of using the trend line analysis of indicators and to develop strategic decisions in order to determine to do more, short, or wait and see. The first triple-filter theory, using weekly MACD chart as the column line of slope trend indicators. It is very sensitive and issued a number of trading signals. And now I prefer to use a weighted index of the line-week moving average line on the chart as my primary long-term trend indicators. When the week chart, exponentially weighted moving average rises, it indicates that a rising trend, it should do more, or wait and see. When it falls, then that is a downward trend, it should be short, or wait and see. I used the 26-week moving average, because it represents the past six months the public market transactions. Traders can test the moving average parameters and to find optimized to adapt to particular market averages. Other indicators have such problems.
I continue to use the weekly chart MACD bars, when the index-weighted averages and the MACD bars coherence, coordination with each other, then that motivated the trend established to encourage the traders to put a heavier positions. The weekly chart MACD bars and prices deviate from occurring, it is technical analysis in the strongest possible signal, even more than the exponentially weighted moving average of the tips.
The second filter
Return to the middle of the chart, and the use of oscillating indicators to look for trends in response to the direction of long-term trading opportunities. When the week bullish trend line, waiting on line and send back oscillator buy signals. In the pullbacks over the top of the wave buy safer. Contour bullish and bearish on-line oscillator, they can put more than the previous single-open positions, profit out, however, the transaction is unable to establish short positions at this location.
When the contour bearish when the index rose to wait on line of shocks and send short signals. In the short rebound than the record low when the short follow-up safety. The date of issue of line oscillator buy signals, you can close out the empty single profit out, but the long established should not be in this position. Oscillator options, depending on your trading style.
Conservative traders will choose a relatively slow oscillation indicators, such as the MACD line column on line or KD, for use in a second filter analysis. Chart bullish week, when, waiting for MACD bars below the axis down to zero and the re-elbow up, or down to oversold areas such as KD send signals to look long on the opportunity to buy.
Bear market is opposite. The trend of the week map indicators show downward trends, are on the diagram above the zero axis MACD bars turned down, or up to KD oversold line and send the signal to make space for short opportunities.
In the main trends in the early stages of the slow oscillator results quite good, the price at this stage to run more slowly. In the trend in accelerated phase, the price range of the amendment back to shallower, in order to jump on the trend of fast motion, traders need to use a fast oscillator.
Active traders can use a strong index (Force Index) moving average of the two-day weighted index (parameters can be longer, according to market research, finding the most optimal moving average parameter.) Weeks diagram trend upward and the strong Japanese map Index dropped to below the zero line, then there buying opportunity. Bear market is opposite. Zhou Fig trend downward, a strong index-weighted index of a two-day moving average rose to above the zero axis, then sell the opportunity arise.
Other indicators can also be applied to triple-filters, filters can be used towards the first tier of the system (Directional System) or a trend line. The second filter can be used MTM, RSI, Elder-ray indicator (Elder-ray Index) and so on. In the second re-filter stage, the establishment of profit and stop-loss goals, and in assessing the risks and potential benefits, the decision whether to trade decisions.
Set stop-loss. Stop-loss is a safety net, it will truncate the transaction bad loss so incurred. Transactions must be set up loss, in order to prevent a transaction or series of losses caused by adverse destroyed an account. To become a winner, this is a necessary step, but many people do not set up stop-loss that both sides to do so would be beaten. Without the stop, the original will eventually be a loss of a single profit. Loss will allow them to quickly set up in trouble, because in any case set loss, the market will knock down their stops.
