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Thursday, April 9, 2009

Trade Just After Trending

What an important one that may help filtering our bad trade that determining a trend condition on American Season. A high volatility in American season offers a tight consolidation in Asian session. It could be abroad generalization, but what we must take care about sideway trading that the longer market in sideway condition the higher it’s probability to wake up. And it’s better to apply another strategy in this condition.

There are a lot of good indicator can we use determining trending market and easy to use in programming and catching by our eyes. However we can also compare Bollinger bands with Keltner Channels but its only easy catch by our eyes. What I think a good condition that we must look is to find “a wide band” out side the channels. You can see such a sample on the graph below.
Wide Band outside channel

The advantage if we meet this condition, it is offering a higher profit in pips hence the market still in high volatility.

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Risk Warning

Please note that Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don't trade with money you can't afford to lose.