Value trading
Page 1 of 85 123451151 ... LastLast
Results 1 to 10 of 986

Thread: Value trading

Hybrid View

Previous Post Previous Post   Next Post Next Post
  1. #1
    Educator
    Join Date
    Jun 2013
    Posts
    1,103
    Thumbs Up
    Received: 579
    Given: 189

    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:

    value.png

    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:

    gbpvalue2.png

    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.

    auction.png

    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:

    auction2.png

    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!

    Not allowed!

  2. #2
    Trader
    Join Date
    Mar 2013
    Location
    Am fuly awear of the difficulties of life,so ill try to bounce back
    Posts
    1,166
    Thumbs Up
    Received: 9
    Given: 1
    Although I would like to add that with proper in debt knowledge on the fundamental aspect of the currency pair we might have an edge in applying such indicators as the Bollinger band at an appropriate time and market condition.

    Not allowed!

  3. #3
    Trader
    Join Date
    Feb 2014
    Posts
    728
    Thumbs Up
    Received: 5
    Given: 6
    Quote Originally Posted by uchexxx View Post
    Although I would like to add that with proper in debt knowledge on the fundamental aspect of the currency pair we might have an edge in applying such indicators as the Bollinger band at an appropriate time and market condition.
    Undoubtedly fundamental analysis is very much important for successful forex trading. But if one really wants to be a trader then it's must for him to learn fundamentals analysis. Technical analysis are also important for understanding market movement and best entry/exit point. Bollinger band is very good for trading. It gives moving average, support and resistance. So for breakout trading it can provide good idea before that.

    Not allowed!

  4. #4
    Registered user
    Join Date
    Sep 2013
    Posts
    2,733
    Thumbs Up
    Received: 45
    Given: 32
    Quote Originally Posted by tanvir33 View Post
    Undoubtedly fundamental analysis is very much important for successful forex trading. But if one really wants to be a trader then it's must for him to learn fundamentals analysis. Technical analysis are also important for understanding market movement and best entry/exit point. Bollinger band is very good for trading. It gives moving average, support and resistance. So for breakout trading it can provide good idea before that.
    Bollinger bands and moving averages are two different indicators as far as my knowledge is concerned and for sure bollinger band can give an idea regarding the market volatility and also the two exterior lines may act as dynamic support and resistance levels which is the same in the moving averages as well. A clearer understanding and in-depth knowledge regarding the forex market can be very much helpful for the traders to perform value trading.

    Not allowed!

  5. #5
    Trader kagho's Avatar
    Join Date
    Feb 2014
    Posts
    1,056
    Thumbs Up
    Received: 13
    Given: 19
    Quote Originally Posted by tanvir33 View Post
    Undoubtedly fundamental analysis is very much important for successful forex trading. But if one really wants to be a trader then it's must for him to learn fundamentals analysis. Technical analysis are also important for understanding market movement and best entry/exit point. Bollinger band is very good for trading. It gives moving average, support and resistance. So for breakout trading it can provide good idea before that.
    yes fundamental analysis is very much important it is what forms long lasting trends in the forex market for price might be heading strongly in a specific direction but when a news event occurs price reverses like it never went in that particular direction.so i always say that fundamental analysis is very much important if included in your analysis and trading

    Not allowed!

  6. #6
    Trader
    Join Date
    May 2014
    Posts
    707
    Thumbs Up
    Received: 2
    Given: 4
    Quote Originally Posted by uchexxx View Post
    Although I would like to add that with proper in debt knowledge on the fundamental aspect of the currency pair we might have an edge in applying such indicators as the Bollinger band at an appropriate time and market condition.
    To making better trade using better indicators with the help of great analysis to well known about time and market condition. Basically this type of making trade are so much undergo for profit. That reason when people are having minimum experience about of this business then they get win from here.

    Not allowed!

  7. #7
    Banned
    Join Date
    Jul 2016
    Posts
    1,963
    Thumbs Up
    Received: 8
    Given: 0
    Quote Originally Posted by uchexxx View Post
    Although I would like to add that with proper in debt knowledge on the fundamental aspect of the currency pair we might have an edge in applying such indicators as the Bollinger band at an appropriate time and market condition.
    there is a part that usually does help us understand what levels as a traders are more prominent and more procedural and better working effort we have to believe of everything we are doing in forex we have to work as a trader and work for the right perspective in the areas we know we have to work as hard in forex

    Not allowed!

  8. #8
    Trader
    Join Date
    Jun 2016
    Posts
    2,015
    Thumbs Up
    Received: 5
    Given: 9
    Quote Originally Posted by uchexxx View Post
    Although I would like to add that with proper in debt knowledge on the fundamental aspect of the currency pair we might have an edge in applying such indicators as the Bollinger band at an appropriate time and market condition.
    quit much applicable the right effort being that traders are able to put everything in the right direction properly well informed, the use of such as momentum creates something that is of more progresive choice in the same trading service its all good for you in the right position

    Not allowed!

  9. #9
    Trader
    Join Date
    Jul 2017
    Posts
    3,706
    Thumbs Up
    Received: 51
    Given: 7
    Quote Originally Posted by uchexxx View Post
    Although I would like to add that with proper in debt knowledge on the fundamental aspect of the currency pair we might have an edge in applying such indicators as the Bollinger band at an appropriate time and market condition.
    Fundamental is not the only means through which we could trade a currency but when we take time to monitor the technical aspect of the currencies we are trading we would understand that they also have great effect on the pairs too, but the key to making consistent money off the forex trading business is fully making or understanding the whole things about forex trading.

    Not allowed!

  10. #10
    Trader
    Join Date
    Nov 2013
    Posts
    756
    Thumbs Up
    Received: 10
    Given: 36
    Really it is very difficult to analyse the things with such a deep analysis particularly for a newbie like me and it will take a lot of time to reach at this level to be able to understand this other aspect before placing orders and what I feel maximum trader will follow the Bollinger band and place order and the result will be a loss, really its very tough to analyse.

    Not allowed!

Page 1 of 85 123451151 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •