Buying makes sense to roll back after the significant correction, but this may lead to loss of money if you join the game too early or too late.
How can you determine the best time to enter into this classic game? The key is to analyze the graphical models. For markets to make a natural correction after the big movements. These counter-trend movement reduces emotional glow and provide ideal conditions for the oscillations back to higher prices.
But any setback can turn into a turn and entrap a downward spiral of your position. So, let's look at the types of setbacks, which we can buy and those that should be avoided at all costs.
The volume presents vital information about the intentions of market-based instruments, as he begins to roll. Looking for an opportunity to sell when the bars tested lower prices. The most bullish volume shows a steady decline in the price chart. This suggests that market players, who hold long positions, are suspended seriously because they believe in higher prices. Otherwise, the big red spikes indicate the level of fear, and may indicate significant peaks.
Not traded on the setback against GEPa. There are two types GEPov, which should be borne in mind. The first comes up with a large volume near the end of the rally. This is called GEPom GEO depletion, which prevents traders about the coming broadside. He also noted the resistance once the market finds support in the tool back and starts a new rally.Second, do not buy at GEPe down when market-based instruments back, if the GEO is not filled in the same day. This is important because when the fall market instruments often find the support immediately after the closing long positions open and short, and that leads to GEPu at the opening. The problem arises when the GEO is not filled by the end of the day. This indicates a bearish turn in the price schedule and entails more sales.
The easiest entrance to the back is a strong buy on the level of support. Trend line, the old records and bands Bollindzhera weaken influx of proposals for the sale and allow buyers to the market in another direction. The biggest problem with the entrance to the sudden drop is usually psychological. Trader loses credibility when the saw the intensity of sales and not in a position to act when it is time to make a purchase.
Reduce down to a 50-day moving average provides an excellent opportunity for those willing to buy-back, who wants to hold the position for several days or several weeks. This price zone is usually noted strong support after the rally. Market moving back here also suggests that early buyers of the depth of oscillation up, while further downstream.
Rollback tend to "eat" traders who buy too soon. In other words, they buy and the market falls further, disrupting its a stop-order and causing even more downward movement. This downward spiral continues until prices reach a large interest in the purchase. This strong demand is often right on the 50-day moving average.
Many traders use Fibonacci levels of recovery to determine the latent support for the rollback. But it is much harder than it seems at first glance. Market-based instruments are usually reduced to three different levels of recovery, and you can lose a lot of money when choosing the wrong level. Fortunately there are ways to determine the most likely level of support.
Try to do nothing until the price reaches a deeper level of restoration of Fibonacci, which is in line with other types of support. This means that the safest strategy is to focus on the 62% th level of recovery and go Moving averages, old records, or other support for the same price area.
This process is called peer review. This works because it is self-enforceable. Other traders look for different types of support under different scenarios rollback. Combinations of many types of support in a narrow price range gives a very strong signal to buy.
Within-day schedule is a good opportunity for a profitable trade for the rollback. It is often difficult to effectively use the rollback of the market in the afternoon schedule. Fortunately, the trends are developing in all formats of temporary and traders can use intra-day charts to determine support and resistance levels.
Analyze the 60-minute schedules, because they give you a lot of intra-day price bars, you can operate. When you see the development of correction, start looking for common patterns, like a bull flag or double basis. These models provide a turn point at the entrance with a small risk compared with the positions open for longer time schedules.
Forex Magazine
based on hardrightedge.com
