TRADING STRATEGy
- A proprietary indicator, the Relative Momentum Indicator (RMI)
What we look for is a price that is significantly oversold/overbought as shown by the stochastic oscillators to be at extreme levels– a MACD histogram showing the last bar
to be
shorter than the previous bar – and finally the RMI indicating a change in price direction.
When we see the above signals – for two consecutive bars – we expect the price direction to change promptly – resulting in a change in trend. Please note that a change in price direction is not the same as a change in trend. Trend is a change in price over a range of bars. Extremely short trends (a very small number of bars) are not as important as longer term trends.
Also remember, the trend in our
fastest chart (1/100th the number of ticks per bar as our primary
Finally, we are technical traders. We acknowle d g e tha t fundament a ls eventually drive the market. Our
trading
p h iloso p h y is that price oscillates due to market psychology on a
regular basis
Detecting a trend change is probably securities
the “Holy Grail” of trading –
day charts – which usually means that a significant movement in the opposite direction is about to take place. When we don’t have that we look for a change of trend in the other two intra-day charts - and finally, when we are trading the fast track we look for a change of
all especially Forex
and responds to fundamental events as they occur. We believe we can compete with the numerous other market p ar t i c ip an t s
by being aware of the psychology driving them (as a group).
Further we believe we can trade often enough between fundamental events that move the market significantly to make a profit in the long run. However, occasionally
FX TRADER MAGAZINE April - June 2013 69
intra-day chart) can change trend repeatedly without changing the primary intra-day chart trend.
What to look for to have that competitive edge?
We love to see the indication of a change in trend in all three intra-
FX
trend in our fastest intraday chart – but that is infrequent because it is truly a fast a furious pace.
We prefer the slightly slower pace of our middle intraday chart, which is 1/10th the ticks per bar of our primary intra-day chart, which is usually about 15-18 ticks per bar.
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