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M-oscillator

A Renko Strategy for Trading - Part 5This is intended more as educational material on a strategy for using renko charts. To begin with, I'll be using USOil in the examples but will include other markets as I continue through the series. The material is not intended to prescribe or recommend actual trades as the decision to place trades is the responsibility of each individual who trades as they assume all risks for their own positions and accounts. Chart setup: (Part 1) Double Exponential Moving Average (DEMA) 12 black line Double Exponential Moving Average (DEMA) 20 red line Parabolic SAR (PSAR) 0.09/0.09/.23 blue circles Simple Moving Average (SA) 20 blue line (Part 2) Stochastics 5, 3, 3 with boundaries 80/20 dark blue/light blue Stochastics 50, 3, 3 with boundaries 55/45 red Overlay these two on one indicator. Refer to 'Part 2' as to how to do this (Part 3) True Strength Indicator (TSI) 14/4/4 dark blue/ red Directional Movement Indicator DMI 14/14 ADX-dark green, +DI-dark blue, -DI-red
FX:USOILEducation
by mxb1961
The 3 types of trendSummary Introduction Type 1 Type 2 Type 3 Conclusion Introduction Trends are not created equal, there are 3 types of trends, I am not a trend trader that much but I can identify trends and tell the difference. This is what I know about myself: 1- Strong trends Examples: Ways to define these strong trends - Eyesight - With a momentum indicator (not a fan) - With a trendline - With moving averages As you can see, there are not many pullbacks with this type of trend - once it pullsback it is a reversal often, so how best to participate in this? 2- Medium trends Not going as much in detail here, don't care so much. Plus you get the idea anyway. Medium trends are not as awesome, they get quite choppy. Just not as good to participate in, in my opinion. Examples: Same ways to define it, but trendlines have smaller angles, RSI not as high, and use EMA 50 rather than 20. Ideas to trade, similar with 1 big exception: 3- Weak trends Ooooh what's that smell? I could trade it like a consolidation with a bear bias (only go short) in a downtrend? NO! In this EURUSD example you can see tops go lower, then higher, then lower. It is not clear, super choppy. The price is generally going down, but there are no good entries. Unless you do not mind a risk reward of 1 while trading a daily chart... The thing that makes holding weeks > get in and out is you can get high risk rewards, cumulate uncorrelated positions (which reduces overall risk), hence increase your profit without having more risk.. (Bonus) The "I am going to zero" trend Summing up: About the 3/5 group of strategies I have posted: 1/5 (The 4 kinds of bottoms) = Supply & Demand 2/5 (Buying pullbacks style) = Trend following / Troll strategies 3/5 (Trend continuation breaks) = (Strong) Trend following
Education
by MrRenev
Correlation Coefficient + CCIPictured above is a graph of Royal Dutch Shell vs brent crude, the correlation coefficient between them, and the commodity channel index tracking the volume weighted moving average of Shell. I tested this indicator on a few energy stocks: RDS, MRO, BP and XOM. Negative correlation between brent crude and an energy stock coupled with an overbought CCI seems to give an indication of price reversal. Here we see two overbought CCI readings coupled with negative correlation, both followed by massive drops in the price of BCO and RDS. Likewise we see negative correlation coupled with upward CCI readings pointing to massive price rises in RDS. Seems to work on daily time frame as well but indicator length will need to be tweaked accordingly. Correlation coefficient going negative is an indication of pricing inefficiency and momentum potential, but does not give us an indication of price direction. The commodity channel index can give us a sense of where price momentum is pointed. Both put together give us a powerful indicator capable of foreshadowing both momentum and direction.
REducation
by Derivati_Capital