|
Basic skills are necessary as well as an
applied understanding of elementary trading skills. Basic
understanding of elementary definitions would be very helpful;
however, outstanding trading tools is more important. The
following sections provide general definitions of trading tools
typically used.
Candlestick Charting
It is recommended that traders use a charting service that has
the ability to show eight time compressions at the same time on
any one currency combination. The recommended time compressions
are the 5-minute, 10-minute, 30-minute, one-hour, two-hour,
four-hour, daily, and weekly charts for each country combination
that you plan to trade. Candlestick charting as opposed to other
styles of charts is recommended.
Data Feed for Tracking the Market
Many free charting services are found on the Internet; however,
most of the services use only 2 to 20 banks for their data
feeds, which may often be the same data that they are obtaining
from their clearing firms. The feeds from these services may
often be delayed or historical. Many brokers offer free charts,
but sometimes that can be like swimming with sharks; in other
words, the broker has access to everything you are also
watching, and if the broker takes a position against you, then
he (or she) can see everything you see—which could be a real
negative for you, as an individual trader. Using an outside
charting service that has a mass of banks feeding real live-time
data into the service is always going to offer the best
advantage for individual traders. Brokers usually say bad things
about independent charting companies, especially those that use
more than 400 banks with fast data feed averages, because these
give traders the edge instead of the broker. I have often
wondered why broker-dealers don’t just buy these types of charts
and trade along with the traders when trades are in everyone’s
favor. Proper volumes of data, when fed into a good charting
service that receives the feed in microseconds, usually update
through to the charts as quickly as in just three to six seconds
to achieve a virtually real-time data feed for traders. Not only
is the feed used for developing the charts, it is also used to
supply enough data for archiving historical information to
average the feed and then create oscillators to measure the
market.
|
 |
River Oscillator Indicator Signals
River Oscillator Indicators (ROI signals) are two oscillating
lines that allow traders to match time compressions to Fibonacci
levels.
The river channel
(RC) acts as a type of volume moving average, moving within
the measuring of the market, preferably through candlestick
charts. When coordinated with the ROI signals and multiple time
compressions, the RC signal becomes a very powerful con-
firmation tool.
Most charting packages will not allow traders to view eight time
compressions at once. If a multiple compression chart package is
available to traders, it will give you the necessary overall
quick view of Fib comparisons, as well as a quick confirming
glance at ROIs, RCs, slow stochastic measurements, and other
volume indicators.
Multiple time compressions also allow traders to view a
possible Fib 1.27 reversal point when associated with extreme
levels and trend-wall crashes when time is critical for an
entry. A 1.27 is an all-time high or low, and when all time
compressions have the same number for a high or low. When 1.27
tops or bottoms all match at the same time, we begin looking
very quickly for other reasons to confirm a possible reversal
entry in the market.
Automated
Trend-Tracking Software There’s no
guessing required with automated trend-tracking software
systems. This type of software, found on some charting packages,
allows ongoing adjustments for identification of trends due to
constantly changing market conditions. Very few charting
packages allow viewers to have access to floating trend lines
within the trends. Automated trend tracking software, such as
that shown in Figure 10.5, allows you to view reversal trends
within a larger trend; when the two trend walls clash, the
reversal in the direction of the overall trend where both trend
signals agree becomes a new entry. These new entries do require
additional confirmations from other volume indicators. |
