"Elementary Particles" price charts


If the external formation Outside - prices also will not have gone, but trading was more restless - in comparison to the previous day increased the distance between the high and low, that is, intraday support and resistance levels. But it is also a sideways trend. However, the graphs "elementary particles" are very chaotic.

How to see the structure in the chaos

How, then, can be seen in the chaotic structure of the price movement after opening a position trader is important to stay in the trend. This applies both to long-term investors, and to the day traders. It is believed that prices are moving in this direction as long as they meet resistance and change of direction. We call such solid momentum going. With the help of these four formations represent the price movement on the chart so that the maximum stay in the pulse. For analysis, we use daily charts IAH.

Analyze the uptrend that started on 3 October 2001. The graph shows the growth of a long candle. This is the origin. Next candle gives a signal when the formation Rally. With this information, we will develop a methodology that allows you to stay in the upward momentum as possible. Let us pay attention to the level of the first candle and Low High second candle. Set boundaries of this formation, and call them "the minimum and maximum formation." Now any combination of spark between these levels assume Inside and call them "internal formations." Why is that at the level of the first candle Low place a stop-loss order. If the price reaches this point, we will retain the position. On the other hand, as the price does not exceed the level of the second candlestick High, to talk about the upside momentum is not necessary. Up to this point we are in a sideways trend.

The third and second candles give Reaction, but we ignore them, because it is an internal formation. But the fourth and the third candle indicates Rally. In addition, a very important point of the fourth candle High High above the second candle. This is a signal to continue the trend. Such a formation is defined as "the true formation." If the maximum is not exceeded four candles High second, it would also ignore this formation. More importantly the fourth and third candles showed Rally, and this confirmed the formation pulse. So set new boundaries. The upper limit - High fourth candle, base - Low third candle. Stop order is carried above the current risk decreased.

The fifth candle shows Inside, along with the sixth - Reaction. But we should not ignore these formations. The seventh and sixth Rally c show continued growth, so stop portable to Low sixth candle and define new boundaries. The seventh and eighth - again Rally, stop swap for Low seven candles and celebrate the new boundaries. Ninth and eighth - Inside. The tenth and ninth - Rally with confirmation of growth, the stop - on Low ninth candle. Again define the boundary formation. Finally, the eleventh and tenth candle form Outside, and stop working.

With the proposed algorithm managed to stay in the trend ten periods of very short stop level. Some formations, we take note, some ignored. 'll Deal with it more next time.