As we all should know currency markets are decentralized with no central exchange.The global financial centers opened and close across. the 24 hour day Oranda market trading hours
In addition to the above there are opening and closing functions occurring at various time frames in technical trading including day, 8 hour, 4 hour, 1 hour, 30 min, 15 min and lots more.The results create waves of transactions that move the market in both directions along a trend line until the next resistance level is reached.This might then be followed by a reversal from profit taking or a new trend being established etc.
As if that didn't confuse the trader enough for you also have the trading platform that may at time refresh the data you are using to set up your strategy.( refresh is to update lagging data so I've been told)
There are other anomalies that effect the accuracy of the data feed that you are using to back test your trading system that need to be addressed in order to commence trading.
The function of opening and closing across the financial centers and time frames, allows traders to implement their various strategies in order to capitalize on any imbalances created during these times.Don't get me wrong volatility and uncertainty creates opportunities for traders to make money so they often wait for when important announcements are due to be released.
With all the problems created by the opening and closing plus volatility and liquidity levels Is there a system that is independent and reliable that will give profits bigger than losses. YES there is, Let me explain,I have been working on and developing for several years an approach to trading that I believe is superior to other systems being used today.
The 3 elements of trading that reduce the importance of money management to a level of risk that will allow you to make better trades more often. Or put another way tighten your stop loss position closer than ever before without it being triggered unnecessarily ( W.D Gann only used price and time just the 2 elements however he was also a keen astronomer)
Element 1 PRICE- movement ( Earth, greed)
Element 2 TIME -timing( Wind, hope)
Element 3 RANDOMNESS -confusion ( Fire, fear)
If any one of the above is not considered or measured correctly then your trade is a definite GAMBLE as most trades are, and most traders loose there capital.
The 3 elements are in essentially a blue print of the framework within computerized trading programs. As you would know that in this day and age 90% of trades are preformed by computer programs. It stands to reason that a basic understanding of the 3 elements will in fact help reduce your risk and help keep your account in tact.Don't forget the institutions are the ones who what you to risk more when chasing a profit On the other hand they provide all the tools and methods you could ever want on their trading platforms. Unless you are able to write your own code then your stuck with what they give you
Most of the advice about money management on one hand is encouraging, in so far as it advises you to only risk between 2 to 5 % at any one time.If you don't heed the advise we will take your money very fast and if you take the advice then we can take it slowly, either way we end up getting it.We know that once your gone we can ramp up our advertising and attract plenty of others into the game.
The first step required is to bring each of the 3 elements to a common unit of measure.As you cannot compare apples to oranges and expect to reach a resolution on any issue with everyone.
To start with all 3 elements can and are represented by numbers hence they can be added and subtracted etc. from each other in many different ways.however the outcome that you get doesn't make any sense and
you are unable to make use of any outcome you calculate. Your answer is of course useless or is it?
Randomness is in actual fact a means to an end it provides a deterministic backdrop for both price and time in a unified manner in the same measure.
To be continued.......
