In our trading strategy, we need a tool that will tell us what is the trend of the market. Although it is possible to make money operating a counter-trend, most find it easier to follow the trend that go against her.
A trend indicator will tell us what is the direction of the main market trend so that we can attempt to obtain the benefit of their direction. From my point of view, a trend indicator or indicator trend follower, will help us to know if we should seek opportunities to acquire or, conversely, seek sales opportunities. I.e., tell us what attitude we will have in the market but it will not determine when entered or when we leave. You can use it to generate input signals but that is your thing, it is not the main objective of a trend indicator.
For example, the simplest trend indicator is the combination of moving averages, a slow (of longer period) and a fast (shorter period). When the fast moving average is above the slow moving average indicates predominantly bullish and vice versa. I could say which combination of moving averages is the best but you'd that I can say something very different from the best combination to've read somewhere else, or you have experienced yourself. And is that the best combination of moving averages is that which best fits to the time frame in which you operate as well as your goals and trading style. I.e. There is no the best combination of moving averages.
Using a trend indicator, we will have information about the prevailing trend and will know that attitude have: predisposition of purchase or sale predisposition, and we will be ready to look for the best time of entry. In the image below you can see a graphic Journal of the currency EUR/USD with an exponential moving average (EMA) pair of 50 days and a 100-day EMA, combination that seems to adapt well to the current situation of the couple and the timeframe used. However, you will have false signals regardless of the combination of moving averages you choose or whatever trend indicator that you use. False signals can not be avoided.
Indicator to confirm the trend
Another type of indicator or tool that you will need will be that confirm us the trend that we have already identified. How is mentioned in the previous point, we will have false signals with any trend indicator that we use. Now aims to improve the chances of success of the prediction using another tool that confirm us the detected trend.
Like the trend indicator, confirmation of trend indicator can be used to generate signals of buying or selling but is not its main purpose. What we pursue is to see if the indicator that warns us of the trend is confirmed. Thus, if both si ambos coinciden agree we can have greater confidence in the attitude we adopt in the market.
A very common trend confirmation indicator is the MACD (Moving Average Convergence Divergence). The MACD histogram shows the difference between two moving averages of different period. If this difference is positive the histogram is drawn above zero and will help us to confirm the uptrend. On the contrary, if the MACD histogram is drawn under zero will help us to confirm a downward trend. Combo half mobile strategy - MACD you can see an example of the combined use of moving averages to detect trend and MACD to confirm the trend and generate signals to the market. In the picture below you can see how alternate periods in which the trend indicator that we have chosen (combination of two moving averages) and confirmation of trend (MACD) indicator coincide in their prognosis and periods in which not.
Indicators sobre compra / sobre-venta
Once the trend has been detected, we can enter the market as soon as possible, this is when we confirm the trend. But another good option is to wait until there is a price pullback. Entry into the pullbacks are intended to enter into levels with lower risk. In other words, if we detect an uptrend seek to enter when price to retract and be ready to rise again. On the other hand, if we detect a downtrend we will seek to enter when price record a recovery and are ready to go down again. Indicators that provide information about the State of sobre-compra can be used to see the moment of entry during a pullback / on-sale. The idea is that if we are in an uptrend, we will enter when this indicator reads order a period of sobre-venta, which would be equivalent at the end of the pullback. Similarly, if we have a downward trend, we will be when this indicator shows the end of a period
0 comentarios:
Publicar un comentario