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Thread: Value trading

  1. #1
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    Value trading

    Hi traders!

    Recently I’ve made webinar «Value trading» and in this thread I want to summarize ideas and concepts from presentation of this webinar.

    Let’s first think about this: every trader has his idea of value, some traders recognize it, some don’t, but we all have idea of value, if we haven’t had it, we would not be able to make a trade. If you go short, you should think that current prices are unfair and market will return to lower prices, if you go long, you also should be aware that value will be built somewhere higher than current price levels. If you sit on your hands, you should think that value is located somewhere near current prices – in other words, opportunity hasn’t appeared yet.

    Conventional and straightforward way for capturing value is to build moving average and derivative of moving average – Bollinger Bands indicator. Moving average is considered to represent value, borders of Bollinger Bands are considered to represent 1 standard deviation from average:

    Attachment 4077

    One the picture you see note that if we take moving average as a substitute for value, we are risking to get many misleading signals.

    Why?

    It occurs because of what I call «Inequality principle»

    It claims: «Different price levels are not equally important for the market». Do you feel what I’m talking about? Moving average can’t distinguish what price levels are more important for the market – it’s responsibility of a trader. Missing piece is market logic.

    Let me provide an example: if I decided to apply Bollinger Bands on GBPUSD on Monday, I was expected to sell:

    Attachment 4078

    But period in the red circle was a final auction, overall trend was rising and market was no longer able to stay inside of a trading range. When market lacks selling liquidity, when nobody is going to sell, it start advertising higher searching for sellers. We often see that price is leaning to higher extremes and holds on higher prices.

    Attachment 4080

    How do you think – if auction is in place, can we say that this area is equally important for the market as area from previous day? Obviously, it is not – if selling liquidity is not enough, market loses equilibrium and searches for new area where balance can be found. We may pay too much attention to this area, but Bollinger Bands respects is as any other areas – moving average in the center is slowly moving up.

    If we rely on idea of value from Bollinger Bands, we should sell because «value» is located below price. But in fact, proper calculation should like described below: value should not slowly move up, but it should make fast «gap» and it’s location is going to be somewhere in the center of congestion:

    Attachment 4079

    As you see, our scenario completely changes when we look at the chart this way. We now should go long, because value is going up!
    So, there was rationale for long trade there, and I posted it in my journal.

    Good luck!

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  2. #481
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    Quote Originally Posted by sharegistFX View Post
    Well, when one is taking risk on trading, I think the person needs to know that in forex trading one needs to learn so that way to be sure when he or she is taking huge risk, nothing is certain in forex and some little mistakes could lead to loss in forex one has to be careful.
    For professional and experience traders earning may become easier. But Specially for new trader it is risky because they do not know properly. For a trader it is necessary to know that Forex market is not stable . Forex market change time to time. Forex market can change within one minute or one hour or one day. Its price up and down any time.

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  3. #482
    Registered user Quid's Avatar
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    I think it need to wait if the market is not breakout at that time the traders can not trade.The trade can not be good because the traders think about their market concept.I think the value trading can only be traded if the traders see the good momentum of breakout.I see market timing and condition it is the market condition which is described by them.I can make some good trading when the market with the good concept is appearing.Traders can see about the value trading with the momentum.

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  4. #483
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    I think that the named thing of the value traders should be known to every trader who likes to make a best use of the chart at all . that area . we can make a good profit of if we made a good use of it . it may means that we can see more than one factor which help us to enter the market with a very good trust in .

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  5. #484
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    Quote Originally Posted by hosny55 View Post
    I think that the named thing of the value traders should be known to every trader who likes to make a best use of the chart at all . that area . we can make a good profit of if we made a good use of it . it may means that we can see more than one factor which help us to enter the market with a very good trust in .
    True value trader is a great member of this forum and following his advices will only benefit us. The more we learn the more we understand the Forex business. Some people think that it needs big capital to do business in Forex but this is not true. A trader can be succeed by small capital. If trader use properly small capital so he/she can earn more profit.

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  6. #485
    Trader lawners1791's Avatar
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    those works of the good chance as trader entering with the supports as having with the good returns on past terms of market evaluation on referring decision to defines of one with the session as draws of the higher volatility on capturing chance on gaining of pips with the submission of risks on closing of less number of pips with the trading.

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  7. #486
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    Quote Originally Posted by AmitChallenger View Post
    True value trader is a great member of this forum and following his advices will only benefit us. The more we learn the more we understand the Forex business. Some people think that it needs big capital to do business in Forex but this is not true. A trader can be succeed by small capital. If trader use properly small capital so he/she can earn more profit.
    I appreciate the teaching and have been following them as well, but then it differs from my trading strategy and the way that I am trading, therefore I think I learned more of the technical approach.

    Forex trading is a process and at this process we can learn so many things from other traders. but basically I think we should be following more of the strategy that we are making use of.

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  8. #487
    Registered user Quid's Avatar
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    I think trading with good market condition is very good and the traders can be more successful in making their decision.I see the traders make their market planning well to make them more successful and market is good at thst time.Value trading is the trading which can be very profitable and the traders can build the market with their consideration.It is the reason traders can make successful trades from forex market.

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  9. #488
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    Quote Originally Posted by splash View Post
    I appreciate the teaching and have been following them as well, but then it differs from my trading strategy and the way that I am trading, therefore I think I learned more of the technical approach.

    Forex trading is a process and at this process we can learn so many things from other traders. but basically I think we should be following more of the strategy that we are making use of.
    We can carry with our trading if it is going well. I believe one thing that if we invest big in this market definitely we will earn big, all things being equal.But first I need to master the skills and become fit to handle a big amount. Big amount and big skills with that I can say that I have forex as an earning source.

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  10. #489
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    working of the good concerns as waiting of the better on supports with the confirmation on opening new positions. as the use of returns with the past terms of evaluation those shows of the best on chance on referring decision on how and when trader to enter the market as having with the distinct of system to work with the running of analytics on collecting signals.

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  11. #490
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    Quote Originally Posted by splash View Post
    I appreciate the teaching and have been following them as well, but then it differs from my trading strategy and the way that I am trading, therefore I think I learned more of the technical approach.

    Forex trading is a process and at this process we can learn so many things from other traders. but basically I think we should be following more of the strategy that we are making use of.
    Unless your trading is not going well, you need not hear anyone. Learning is from the start. First we should learn the indicators and also combinations well on a demo account. Well , practice makes us better and better. You should practice everyday and analysis market. You are the best indicator of you.

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