The entries are given by the fast time that we have a position in the market, which is between 5 to 10 minutes, regardless of the result, this temporality is what we propose as fast, which fits inside the parameters of most brokerage houses. The recommendation for such entries is to open them with the least possible number of blocks or lots, thus lowering the level of risk in operations such short life.
The volatility in the forex market is the time where the market offers opportunities for entry with good benefits, especially if we follow the trend caused by the breakdown of a technical level or the announcement of a fundamental. To operate within input and output volatility to the market quickly, we must first identify the general trend of the market and second we have to identify the trend generated upon entry, this will tell how profitable the position and the maximum time that we have open.
Operate a position with the volatility not only requires an optimal risk management requires a timely entry, and enter when the trend is exhausted state the position in unnecessary losses. To see one of the many ways to deal with volatility we can go to the training of Japanese candle patterns as will be seen in the following graph:
Also note that the man hanging, which we expressed in the 5 minutes chart of a trend change, we need to break the trend can not force the 1.9665 level. Pivot level that will most clearly in the following graph of a time:
As you can see the first sign of fall is determined not overcome the resistance of 1.9665, confirming the fall is to break the floor and cover the wing upward, downward movement is caused by two key reports: the publication of the catchments capital in U.S. treasury bonds and industrial production, both showing good results for the USA. We can see the first chart entry in 10 minutes of volatility will yield 50 pips down if we do not take the journey from beginning to end, and a distance of 70-100 pips taking early signs of weakness as a firing tickets intra day.
The second signal strength corresponds to an upward movement generated by the current account balance of the USA, which was at levels close to the estimate, so the market again technically does not find reasons to support the pound, the confirmation downward motion is given by the crossing of the 1.9531 low.
Recommended it to operate volatility dynamic is to put a stop to 15 pips at least this will give room to mature our position and we will cover in the event of a movement against it.
It is inadvisable to enter the market when there is little or no volatility in financial markets, because the movements performed by the market during these periods can lead to making wrong decisions, thereby affecting the operational capacity of the account and could also psychological impact upon the operator of the account.
It is also not recommended in the operation when the volatility of our account with each open batch is greater than 10% of the total bill, this will expose us to greater risk. Significantly affecting our movement has a loser.
Finally, it is inadvisable to operate in the volatility when the level of knowledge about fundamental and technical analysis is low or zero in these cases we recommend training or a trader to let you operate the account.
After the previous general also need to reflect on the quality of our broker, ie, if the broker with which we operate or maintain their spreads move in times of high volatility, ie low ranking parameters as a scalping strategy and finally reliability of the platform. If any of the conditions because we doubt it is better not to operate especially when the low volatility spreads or broker opens freezes prices.
In general inconvenience of being cataloged by the broker as the scalp, ie have an entry strategy least 3 to 5 minutes per position, are many. The first is that in times of high volatility will be denied our operations, instructions for entering or leaving the market will have to be confirmed by hand, wasting time and market opportunities.
But how to avoid falling into the scalping is to design an appropriate strategy to consider operation of the operator profile, the source of funds (life savings, inheritances and percentage holding in our investment of our total forex assets) used in the forex, in support of goals and lost profit. What we will bring entries accordingly studied the market, avoiding operations seconds or minutes that we punish the brokers.
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