Forex Trading: In Search Of Days Of A Trend (strategy And Methods) Part 2
Essence of change of a trading range
Occurrence of trend day can indicate some signs, but most frequent of them are fall volatility or a trading range. In sequence lowered/increased of volatility some recurrence is observed. The market is in a fluctuation condition between the moments of calm and the moments of its movement upwards/downwards. Market volatility is more subject to recurrence, than its prices.
When the market is quiet, there is some balance between bargains on purchase and bargains for sale owing to that the trading range becomes less. If on the market the new information it destroys the settled balance of the prices and the market starts to filter starts to search for new areas of the prices.
In this case open positions, both short, and long get to a trap as are on the party which to a market opposite direction that in turn forces them to close. Thus, it creates visibility of inequality between inflow of means for the market and their outflow.
Such impulsive jumps in prices involve new market participants that in turn creates a vicious circle. Those traders who trade on local extrema and notice unidirectional movement, begin fight of closing of items. Unlike expected recoil of the prices which happens during a market normal state, there is that condition when the market instead of fluctuating starts to develop the received impulse.
As there is a reduction of a trading range, we can understand when the market leaves a phase of calmness and will begin the movement. We see that for us, probably, new break awaits. Most difficult it is to understand where break are because still there is a communication between sellers and buyers will be directed. That we can make the only thing, so to be ready to the future growth of the market volatility.
It is a lot of strategy which are based on breaks, can advance an input direction on the market only after break already takes place, and the market already knows, where it wishes to go. Such engineering of trade does not allow to advance a turn point, but allows to be more confident a direction of movement of the market.
Pleases only that all trading systems which use technology of breaks have enough high level of a parity win/los. But, unfortunately and losses at use of these trading systems can be very great and very big.
People who took the decision to participate in forex trading must start from learning the basics of this market to make sure you do not experience problems with this industry.