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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. #881
    Trader Killer_Queen's Avatar
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    Quote Originally Posted by aunamika1993 View Post
    Definitely it's very difficult to studies what exactly using this type of heavy analysis in particular for the beginner like everyone as well as it may need time to achieve when it reaches this degree so that you can see why different factor prior to inserting orders as well as just what I feel maximum broker will follow the Bollinger music group as well as area get along with the result is a damage, truly their really hard to studies.
    well we can start the learning from the very basic then if we find things still hard to understand. its normal because we can not step up and skip the basic without knowing them. we wont know whats ahead of curve then. as trader, we must know what are the things we want to learn and divide them from easy to complicated sections. try to learn and understand easier things first then move on with hard ones.

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  3. #882
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    Quote Originally Posted by cutiekc View Post
    Yes it is, because then we will get to know about the support and resistance trading which will add more knowledge and ability to the way we trade. Trading in the business needs more time been spent on the demo trading account and as a matter of fact traders needs to be patient and also practice properly, because no trading strategy will be easily applied to the way we trade and work with the market, it will take time.
    It is true, the support and resistance trading will get valuable work for traders, and this is a way that will make sure the trader is fooling the proper trend of the market after a definitive breakout, the trader will not have much doubt in what they are doing. And with careful strategy on this, traders can make money with ease, and lose less.

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  4. #883
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    Am telling you its hard to trade forex, and these is the reason why there is everything to understand what to do,w ehn you have something to do with the way the market moves there is always that one part that always screams and always puts together the right perspective in trading forex we all have to keep on doing something about forex

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  5. #884
    Trader Sascha's Avatar
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    it's hard to find some unusual and interesting topic in webinars these days. i did participate some webinars like this value trading with value trader but now i forgot some of the materials that been taught. reading this again likely to capture all the knowledge little by little but still i forgot some. like the use of bollinger band indicator or moving averages, i forgot how the core setting worked but still remember their basic information.

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  6. #885
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    I think first you must need to use a caption of post in which you are talking about because if you caption your thread then we can easily understand what are you telling about in your thread. In that way its easy for us to understand better your post. Your post is good and I really learn a lot of things about market movement in a area.

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  7. #886
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    [lang=ar]trading value or value of any work which we do or everyone is doing in the world is very much important, because if we are doing any particular work or job and there is no value of this work in our mind, then it will be very much hard to get success in the work.[/lang]

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  8. #887
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    Quote Originally Posted by MOOOH View Post
    [lang=ar]trading value or value of any work which we do or everyone is doing in the world is very much important, because if we are doing any particular work or job and there is no value of this work in our mind, then it will be very much hard to get success in the work.[/lang]
    It is good for traders to always know that what will get success to them is what they are doing with all values, if they do not lay values to trading, this will effect that they know about this business, and the result will never be fine. The success is in the hard work to make sure they know trading with full expertise to handle it.

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  9. #888
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    Quote Originally Posted by cozard007 View Post
    It is good for traders to always know that what will get success to them is what they are doing with all values, if they do not lay values to trading, this will effect that they know about this business, and the result will never be fine. The success is in the hard work to make sure they know trading with full expertise to handle it.
    Without the understanding of how to trade, it will be utmost difficult for you to survive in Forex market. Knowledge and discipline together can help you to make the most here. Without discipline there is no chance of survival in this complex business and earning would be an unimaginable thing. I think severe losses mainly start by not following the money management.

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  10. #889
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    Quote Originally Posted by kanoop View Post
    Without the understanding of how to trade, it will be utmost difficult for you to survive in Forex market. Knowledge and discipline together can help you to make the most here. Without discipline there is no chance of survival in this complex business and earning would be an unimaginable thing. I think severe losses mainly start by not following the money management.
    Without understanding of how to trade, it would not be just difficult but literally impossible to survive in Forex. A strategy and plan must be used with good understanding. Market will not always respect our strategy and so we also should know the need of risk management. Discipline helps in managing risk and also managing our emotions.

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  11. #890
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    Quote Originally Posted by AmitChallenger View Post
    Without understanding of how to trade, it would not be just difficult but literally impossible to survive in Forex. A strategy and plan must be used with good understanding. Market will not always respect our strategy and so we also should know the need of risk management. Discipline helps in managing risk and also managing our emotions.
    To make money you need to understand how to trade and how to think clearly. Markets has punished countless traders for greed and other mistakes. Also a lots of people made millions from forex, but they are not like us. they have expertise and discipline. The skills and knowledge of trader is what matters.

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