Want to learn about strategy

[Wach80]

This book is so much better than other material i have read i actually enjoy it , the dow's theory confused me a bit (due to english not being my mother language) but S&R and trendline chapters are easy to understand , so lets say for ex. that 3 resistance lines have been violated and at the start of the 3rd violation , it means a valid uptrend begins? do you buy at the start of the 3rd violation? when you are examining charts at real time do you notice this information when it arrise? is it easy to be fast enough? how often do charts get updated? every second? more? does the trader have to monitor them constantly so he wont miss something or can you place an order and examine them every x hours or something like this? Also if i understand correctly the other info on the chart like time length of the order , volume and open interest are there to enhance the validility of the trend? i mean if all those elements are combined then it makes an even better trade , this makes me think that day traders experience more variance than intermediate traders since their trades lack in validility.

 

[Xela]

lets say for ex. that 3 resistance lines have been violated and at the start of the 3rd violation , it means a valid uptrend begins?

It does if that's the definition of "trend" that you've chosen to adopt, to decide when to trade.

If you're trying to catch the early stage of new trends, what matters is to have your own clear and precise definition of what constitutes and defines a "trend", so that you can identify it unambiguously.

However you choose to define it, you'll sometimes be wrong.

Be aware that the earlier you try to catch a "new trend", the more false signals you're going to have, and that trying to avoid all the false signals will mean that you're also missing some of the trend and getting into it later (which I prefer, myself).

if all those elements are combined then it makes an even better trade , this makes me think that day traders experience more variance than intermediate traders since their trades lack in validility.

I think that's probably a good observation: in general, faster time-frames give a higher proportion of false ("less valid") signals because of relatively increased variability. Longer time-frames tend to give fewer signals each of slightly higher reliability.

That doesn't mean that shorter time-frames are necessarily less profitable, overall, though: they may more than compensate for that because of the increased trading frequency they facilitate: if a specific market moves 20 points over the course of one day, then anyone trading on daily or longer charts won't be able to take more than 20 points' profit from it, over that day, but someone trading a faster time-frame might take a much smaller number of points' profit on multiple occasions, as it moves up and down during the day, and still emerge with more overall profit than 20 points.

I hope those comments make it clearer, rather than more confusing.

 

[Wach80]

It does if that's the definition of "trend" that you've chosen to adopt, to decide when to trade.

If you're trying to catch the early stage of new trends, what matters is to have your own clear and precise definition of what constitutes and defines a "trend", so that you can identify it unambiguously.

However you choose to define it, you'll sometimes be wrong.

Be aware that the earlier you try to catch a "new trend", the more false signals you're going to have, and that trying to avoid all the false signals will mean that you're also missing some of the trend and getting into it later (which I prefer, myself).





I think that's probably a good observation: in general, faster time-frames give a higher proportion of false ("less valid") signals because of relatively increased variability. Longer time-frames tend to give fewer signals each of slightly higher reliability.

That doesn't mean that shorter time-frames are necessarily less profitable, overall, though: they may more than compensate for that because of the increased trading frequency they facilitate: if a specific market moves 20 points over the course of one day, then anyone trading on daily or longer charts won't be able to take more than 20 points' profit from it, over that day, but someone trading a faster time-frame might take a much smaller number of points' profit on multiple occasions, as it moves up and down during the day, and still emerge with more overall profit than 20 points.

I hope those comments make it clearer, rather than more confusing.

Ah i see , so basically the fan principle im reffering to is a strategical option that i decide if i want to use it as part of my strategy , i guess this book gives you many tools and you decide which ones to keep and which to drop but strategy is all about trend definitions based on S&R and lines , i guess more things will be included later on but thats what i have learned so far.


Yes short term traders will have less edge but will compensate due to big volume of trades.

 

[nonlinear5]

Wach80, you are in desperate need to read this book:

Ask questions *after* you are done with it.

 

[Wach80]

Its hard to deal with the english language at price pattern chapters , from what i understand these patterns like head and shoulders are meant to find a trend on trendless situations? come to think of it the previous chapter strategies were more about downtrends or uptrends. It may look complicated but its basically draw lines and check when they break. I guess there is software that will automatically draw all these lines if they are possible on the chart?(if its possible then you shouldnt be able to misread a chart) and even make the order automatically? it looks like botting and automation are legal.

 

[Wach80]

I finished the price chapters , i want to practice what i have learned , is there a software who can be used for training? a software who can give you charts and can also put trendlines based on what type of trendline pattern you want as long as its possible to do so ofc.

 

[Voodoo Thursday]

Hey Wach80

To answer your question: What you are looking for are trading platforms. These platforms can be both website, phone and computer based.

Personally I am using MetaTrader 4 with the broker XM (link). Also on the top of this website (www.elitetrader.com) you see 2 headlines saying "Brokers", "Software". You might want to look into those 2. But make sure to do some research on this to look which of them is the best for you.

Recently (a few days ago) I started doing some research on trading too. I did always liked following the financial news and the financial market. But except that I have no real experience in trading. What I do have is programming experience so I thought I could give it a try and make an automated trading system.

But first lots and lots of research. So this will be the first (of many) threads I will be following on this website.

 

[CyberWarrior]

There are many strategies in the Forex trading. I have the knowledge about the stop-loss strategy. I would like to get the knowledge about other strategies.