Tag: trend following

Trading with stage analysis, the Stan Weinstein way

Trading with stage analysis, the Stan Weinstein way

Trading Strategies
Stage analysis trading strategy is a relatively popular trend trading strategy that was discussed in detail by Stan Weinstein, in the book, Secrets for Profiting in Bull and Bear markets. While the basic principle of trading with stage analysis is merely following the trend, Stan Weinstein gives a more structural approach to this trading strategy. According to Weinstein, stage analysis uses chart patterns in order to derive the four stages in a security's price. Once the stages are determined, there are specific guidelines that determine when to buy and sell. Stage analysis was initially described for the stock markets, but could very well be used for the forex markets as well. With stage analysis, traders can hold on to positions and helps to enter the trend at a relatively early stage...
Trading with Speed lines (Speed Resistance Lines)

Trading with Speed lines (Speed Resistance Lines)

Trading Indicators
Speed Resistance Lines or Speed lines for short is a trading concept that was developed by the late Edson Gould who was one of the pioneers as a stock market technician. In 1977, Forbes Magazine described Gould as "the dean of technicians." The speed resistance line concept is based upon the theory that trends can be divided into three equal parts and makes use of trend lines to divide the underlying trend which are then projected into the future to act as support and resistance lines. Although this method is quite reliable and tends to act better than plotting trend lines based on current price action, many traders do not make use of speed lines. Adding this technical analysis to your existing trading arsenal can greatly help the trader understand price action much better and especi...

Currency Trading Strategies That Work

Trading Articles
There are many different trading strategies that traders employ but very few of them actually work, in this article, I am going to write about what works in the Foreign Exchange (or Forex) market and why. Any trading strategy, no matter what it is, will not work if it does not employ at least one edge to give the trader better than 50/50 odds of either being right or of then gaining more from a winning trade than they will lose on a losing one. If trades were simply entered on a coin toss and exited at random then the traders doing this would, on average, win as often as they lost with the size of the average losing trade being equal with the size of the average winner. In a scenario like this traders would slowly lose all the money in their trading accounts as the costs of trading (i.e...

Trend Following

Trading Strategies
In my opinion, the best trading strategy for trading the Forex market is probably trend following. Different markets behave in different ways and the Foreign Exchange market is one of the few markets left that still tends to experience long and fairly clean trends. Trend following has slowly lost it's effectiveness as a trading strategy on most markets in the last few decades as markets generally only tend to trend well when they are being driven by real economic fundamentals and not by speculation. And as speculators have gained access to ever increasing amounts of capital over the last 20 or 30 years as more and more wealth is poured into hedge funds and the likes the influence of speculators has increased. But speculation still doesn't rule the Foreign Exchange market in the way t...
How to draw trend lines the right way

How to draw trend lines the right way

Trading Indicators
Trend lines form one of the basic blocks of technical analysis and thus are very important to a chartist. Simply put, trend lines are nothing but sloping support and resistance levels and in fact price behaves similarly as it does when approaching a traditional (horizontal) resistance or a support level. Despite its simplicity, trend lines can often turn out to be subjective and thus can confuse a chartist if indeed they have plotted a trend line correctly. The most important aspect of trend lines is that they tend to work on any time frame and in any market which is why they are one of the most popular technical analysis tools for a chartist. It is possible to trade only with trend lines although they are mostly used in conjunction with other methods. A good example of trading based off t...