Identifying Beneficial Breakouts

A common way to enter the market in a avoiding much false breakout that is to wait for the price to go back to the breakout level and then wait to see if the price goes into the area previously identified or continuous range from here in the direction of the breakout. The disadvantage of waiting this confirmation of breaks is that you may miss some good trades.

A breakout is easily identifiable to the naked eye, so you just have to see when the price exceeds a certain level. These levels define and identify the area range may be more difficult than the identification of the break itself. Once we see the first signs of a breakout we will be able to study and prepare for potential trading operation quickly.

As mentioned, it is essential to identify the levels on which the price can make a breakout. This will be of great help using graphical patterns. It also can be implemented as a tool to help other tools and technical indicators.

Let’s see a little more detail about the breakdown double top / double bottom, shoulders and head, triple top / triple ground, trend lines, channels and triangles.

Breakout trend lines

Drawing a trend line is one of the most basic ways to find a possible breakout to operate. Simply draw a line that goes in line with the current trend by joining at least two maximum, if the trend is down.
When the price approaches the trend line, two things can happen: that rebound and continue the current trend or trend line break (breakout) and cause a turnaround. We must be prepared to take advantage of this breakout. See only the trend line and the price may not be enough so it can help you with some of the above indicator.

Money Management Models

Now, we will see major monetary management models that can be applied to determine the size of operations, the number of lots that put on each trade. Emphasize that this is not money management strategies themselves.

If a trader will risk much more likely not to survive in the long-term market or to obtain the best results from a good trading strategy. Otherwise, if a trader in very little risk is more likely that the trading strategy is not showing its full potential. This leads to that if a trading methodology has high expectations, the final result will depend heavily on money management techniques, and therefore it is the key to success as a trader.

As there is a trading system that fits all traders, there is no money management rule to suit all styles of trading. Even some trading systems require specific management or monetary techniques and each technique may be valid for a trader while it may be totally useless and ridiculous to another. Here I will present the main models of monetary management with the aim of you understand the basics of each and be able to choose the model that best suits you and your style of trading.

  1. Model of Fixed Lot
  2. Model of Fixed Fractional
  3. Periodic Fixed Fractional Model
  4. Model of Fixed Fractional Benefit
  5. Optimal F
  6. F Segura
  7. Model of Fixed Fractional Medida
  8. Ratio Fijo
  9. Simple fixed ratio
  10. Advanced Fijo Ratio
  11. Percentage of Kelly

Cash Price Model

Central Bank Monetary Policy

After creation of first central bank in England in 1694, during the period between 1870 and 1920 saw the creation of central banks across the board worldwide and born existing major central banks today, as the U.S. Federal Reserve was created in 1913, led by the industrialization of Western countries and the use of gold standard.

The monetary policy of central banks teamed to maintain a fixed exchange rate of the currency gold national value and trading in a tight range against other currencies also gold supported. To accomplish this end, central banks began to establish the interest they would pay their own borrowers and those that would be charged to other banks who liquidity and resorting to central bank needed credit to ask those affecting interest rates and the exchange rate between currencies.

The gold standard maintenance adjustments needed interest rates practically every month. It was fully established Central Bank’s role as lender of last resort (for banks and institutions, not consumers) and it was demonstrating how interest rates are influenced the entire economy as a whole.

In the second half of the twentieth century, the most widespread monetary policy in developed countries focused on the growth of the supply and its effect on monetary macroeconomics. This was the main idea of monetarist economists, some of the most influential was Milton Friedman, Nobel Prize for Economics in 1976.

Friedman went on to state that the aggregate public debt contracted by governments during times of economic recession would be financed by the creation of the same amount of money to stimulate the economy. However, this type of policy objectives centered on money supply growth has been less satisfactory results repeatedly. For example, in 1979 the Federal Reserve of the United States focused on creating and outputting more money by increasing the supply of money available to stimulate economic growth, but it did not work. In practice there are complex relationships between money supply and other macroeconomic variables that make this impractical policy.

Technical Trading

It is probably obvious to everyone; commodities can not be bought and sold just so completely random. Commodities to be bought and sold with care every time before we enter into any business, we must have some good and solid reason. Such reasons are quite logical to assume any profit that ideally we want to collect.

To get such a cash profit, the basic assumption is that the market will go in the right direction – and if the market goes in desired direction, the traders will make reasonable profit.

Of course, it is extremely important to note that commodity trading is highly unpredictable and you can never know with certainty what the market will do tomorrow – i.e. whether the market will go up tomorrow, or down and whether you will loss or gain. Nevertheless, we can enter into the market with at least some probability that the market will go in our direction. The higher the probability is, the greater the chances are that the trade will be profitable.

But how do we know when there is a high probability that the market will go in the next few days just by our right direction? You can know this precisely using technical formations and indicators.

Formation and technical indicators are tools that tell us when we should enter the market and when to get off of him and vice versa, we have the greatest likelihood that our business will be profitable.

Technical indicators are easily observable with the naked eye. Throughout history, trade has been proven that technical formation on the chart appear again and again, and under such formation and indicators tools, you can predict reliably which way the market will go in the next few days. Again, it should be noted that not any prediction is correct entirely hundred percent in commodities.

Basics of Forex Shutdown Strategy

At least as important as the entry strategy is the shutdown strategy. On this basis you can happen that you are like many other traders to lose in a short time a lot of money. Of course for most people it is much more interesting to talk about the money you can earn with forex, but you’ll probably have to cope with losing positions, so it is important to also look at the other side and make ensure that losses will not be too much.

Fundamentals
As with the entry strategy is in the shutdown strategy is of great importance to monitor the news and rumors in the flow. In this way, it is indeed often possible to watch out to a certain downward trend. So you can set shutdown strategy already in advance properly. This can prevent a lot of losses and in this way to ensure that you end up easily with profit in forex trading. This is something many people struggle with, since it can also mean that you can just take a final profit. To choose shutdown a good strategy, you should keep listening to the news and err on the side of caution.

Technical analysis
Of course you can use the shutdown strategy on the other hand also based on a technical analysis. In that case, choose there to look at the various technical indicators. If you use Metatrader in Fibonacci, moving averages, bollinger bands, stochastics, relative strength index and commodity Chandle index on the basis of the statistics to see if it is better to shutdown strategy and way to get out. It is of course again important to have sufficient discipline to have and not to make a final profit.

Emotions
It is therefore especially important in choosing the shutdown strategy that your emotions really no chance awards. This is because the main cause of wrong decisions in the Forex trading. People who make money with forex look at facts and for that reason have a good shutdown strategy. When the steps seem to be going go on the market they just go out and they do not try to make more money. There will keep looking for opportunities to make a small profit, but they know in the long run that they will have the shutdown strategy.