Forex & Stock Trading Library

The trading rules by Aleksandr Yermachenko (aka ataman).

Forget the news, remember the chart. You’re not smart enough to know how news will affect price. The chart already knows the news is coming.

Buy the first pullback from a new high. Sell the first pullback from a new low. There’s always a crowd that missed the first boat.

Buy at support, sell at resistance. Everyone sees the same thing and they’re all just waiting to jump in the pool.

Short rallies not sell-offs. When markets drop, shorts finally turn a profit and get ready to cover.

Don’t buy up into a major moving average or sell down into one. See #3.

Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you’re in big trouble.

Exhaustion gaps get filled. Breakaway and continuation gaps don’t. The old traders’ wisdom is a lie. Trade in the direction of gap support whenever you can.

Trends test the point of least support/resistance. Enter here even if it hurts.

Trade with the TICK not against it. Don’t be a hero. Go with the money flow.

If you have to look, it isn’t there. Forget your college degree, trust the money flow.

Sell the second high, buy the second low. After sharp pullbacks, the first test of any high or low always runs into resistance. Look for the break on the third or fourth try.

The trend is your friend in the last hour. As volume cranks up at 3:00PM don’t expect anyone to change the channel.

Avoid buying at the open except when the Market falls before the open. They see YOU coming sucker.

1-2-3-Drop-Up. Look for downtrends to reverse after a top, two lower highs and a double bottom.

Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers come to the rescue above it.

Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.

Big volumes kill moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.

Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers.

Bottoms take longer to form than tops. Greed acts more quickly than fear and causes stocks to drop from their own weight.

Beat the crowd in and out the door. You have to take their money before they take yours, period.

Introduction

First of all I want to thank everybody on FF for working with me, sharing thoughts and helping me with improving the system.

The major flaw in v2.0 was the whipsaw effect, this is common with al moving averages systems. I’ve tried several things to prevent this, (using rsi, macd’s and so on….) but you always have the problem that most indicators are always to late in choppy markets.

I was able to solve a bit of the problem and this is the main change of the system. The idea after it, stays the same. Using short term trend indicators and comparing them with (long) term trend indicators to predict what the future trend will be.

I must say, that this system will still generate false signals. But a heck of a lot less than v1.0

Set-up

• Timeframe
  The longer the timeframe, the better. I would recommend to use at least the one hour timeframe (H1), but I rather use the four hour timeframe (H4).
• Chart
  I set my graphic in barcharts, but that is really your own preference.
• Indicators
  Add the following indicators :
  + EMA (exponential moving average): 18 in yellow (closing price)
  + EMA (exponential moving average): 28 in yellow (closing price); This is what I call: "The Tunnel"
  + RVI (Relative Vigor Index) : period 100 in blue and red
• Trading pairs
  Use whatever you like. I recommend using pairs you are familiar with. Always bear in mind news releases, long term estimates and other fundamental trading aspects.

Getting in a trade

• Long
  If the blue RVI crosses the red RVI upwards AND is followed by a confirmation of a cross by the EMA’s from the yellow tunnel.
• Short
  If the blue RVI crosses the red RVI downwards AND is followed by a confirmation of a cross by the EMA’s from the yellow tunnel.

!!! Always keep an eye on the main trend of the RVI. For example : If you get a long signal and the RVI is also going up then your almost sure that the signal will be correct !!!

Getting out a trade

You can stay in a trade as long you don’t get new signals on that pair. Especially pay attention to a internal cross (or extreme narrowing) of the yellow tunnel EMA’s. This means that the trend is likely to loose strength and maybe even to reverse.

I recommend a trailing stop. Monitor your trade the first day, to see if you have followed the right signal. Use your Money Management rules and stick with them.
Also keep attention to news releases and other fundamental issues.

Examples

Basic trades

Always wait for confirmation

Conclusions

If used this system 4 months before releasing it. It is very profitable. But before you use it, keep in mind:

• Systems generate false signals, use your knowledge and gutfeel to know if you should be doing the trade. The best confirmation of a signal = YOURSELF
• Always use stoplosses !!! Decide for yourself if you need tight or loose stoplosses
• Money management is THE holy grail, check it out on ForexFactory
• Keep learning from your mistakes

Nicolas Moerman (aka Sidus)

This Expert Advisor (EA) is an automatic trading system developed for Metatrader platform and it’s derived from SuperNova trading system introduded by Cryten in ForexFactory in late Aug 2007.

Indicators requested for SuperNova EA v1.4
In order to be able to use all features available with SuperNova EA , please be sure to have installed ALL following indicators in the C:\…\Metatrader\Experts\Indicators folder:

• QQEA.mq4
• DMI.mq4
• MomentumVT.mq4
• Damiani_volatmeter v3.2.ex4
• Juice v1.2 alert.mq4
• Laguerre.mq4
• T3.mq4
• Heiken Ashi.mq4
• Parabolic SAR Color – Alert.mq4
• QQE Alert v3.ex4

Rules:

In this article the author looks at the Seven ‘Sins’ of Trading and what action we can take to avoid them.

By studying at the most frequent reasons for failure, we can avoid making the same mistakes as the crowd, and thus turn these negative points into positives. In this article, I will be looking at the seven most common mistakes I see made by traders.

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Any financial instrument that is traded on the market is a position of some active towards some currency. FOREX differs from other markets only in the fact, that another currency is used as an active. As a result in the FOREX market we always deal with the correlation of two currencies, called currency pairs.

The project that started more than a year ago, helped to develop a group of indicators under a joint name cluster indicators. Their task was to divide currency pairs into separate currencies. Since then indicators were changed several times. Moreover, the interest of users and active discussions in forums allowed to develop methods of working with indicators and create trade systems based on them.

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If you have subscribed to the NEoWave Trading service for a long-time, you’ve noticed my trading style has transformed the last 2 years. For the first 20 years of my career, all NEoWave (and old WaveWatch) services focused on “predicting” markets using wave theory. Because of the detail I attempted to achieve with my forecasts, the process might consume as much as 12 hours of my then 15-20 hour work day. If structure was clear, the second step of the process involved designing a trading strategy that took into account all possible preferred and alternate scenarios. If a position was warranted and activated, the third step involved managing that trade using stop-loss orders and profit objectives based on my presumptions of wave structure and the outlook which it implied. While on rare occasions that approach worked spectacularly well (such as the 2000 – 20002 period in the S&P), it left much to be desired at least 50% of the time.

After pursuing the universally accepted 3-step process (Forecasting, Entering, Managing) for nearly 20 years, 7 years ago I began to question its validity. Why? Even though my forecasting abilities over the prior 20 years had improved several orders of magnitude, improvements in my trading were only incremental. That perplexed me for two decades and was extremely frustrating. How could my forecasting improve so much and my trading so little…what was I missing?

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The word on the street last Friday was that the federal funds futures market was pricing in a 100% chance of a rate cut by September. But the price of the fed funds futures contract represents a weighted-average of all the potential outcomes in the months ahead, it is not a point forecast.

As a result, suggesting the market was 100% certain the federal funds rate would be 5% in September was a misinterpretation. The 5% federal funds rate expected was a combination of a variety of different forecasts. Some investors thought the economy was crashing and expected many rate cuts in the months ahead, while others (like First Trust) believed the economy would remain in good shape and the Fed would not cut rates at all.

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Although traditional trendlines are notoriously subjective, it is possible to develop trendline-drawing rules and trading guidelines that can be applied consistently and objectively.

Technicians use trendlines to identify trends and determine when they end or reverse. The only problem with traditional trendlines is they are subjective — 10 traders could look at a chart and draw 10 different trendlines. Proper trendline application and analysis require consistent, objective rules.

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Lincoln (a.k.a. lwoo034 at Forexfactory.com forums)

This tutorial focuses on more advanced pin bar setups. It should only be read after the introductory tutorial as it continues the same themes and assumes some knowledge of pin bars. The source of this material consists of numerous posts by James16 (www.james16group.com) at forexfactory.com and several other members who have experimented with pin bars.

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Lincoln (a.k.a. lwoo034 at Forexfactory.com forums)

Introduction

Jim (a.k.a James16 at the Forexfactory.com forums) has taught many forexfactory.com members how to play pin bars. This instruction has been through demonstration over dozens of posts. This makes it difficult for a learner to quickly pick up key concepts and terminology. This tutorial on how to play the pin bars has been designed as a good first lesson and introduction to pin bars. It provides an explanation of the pin bars and familiarises the reader with terms used by James16 in the examples (such as ‘eyes’ for the pin bar). The Advanced Tutorial covers some higher-risk setups that may appeal to some traders. For further instruction please see the James16 Chart Thread at Forexfactory.com or the James16 private forum (www.james16group.com).

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