The system of four lines


Two other types of purely geometric signals - the third beam fan and the third beam tape measure (it was specially dedicated to an article in the March issue of the journal - [2]). Folding rule provides timely signals after accelerating the movement of markets, when all indicators lag behind price changes. A fan, a characteristic slowing of movements, provides a useful signal in a state of consolidation of the market when the indicator may be completely neutral.

Illustrations to trade in

The figure shows the signals to the open position, resulting in seven days on the hourly chart of the British Pound. Four lines were drawn on the interval of 6 weeks to 26 February.

A green icon means the bull first opportunity to go long - the release indicator below the lines. 1 along the line it was not possible to open a position, but it is useful as a future first ray fan. Concurrent breakout couple lines of resistance - and the display and 2 on the chart - gave a long position. A short line of resistance in the RSI is in serious doubt, but at the same time there was a break of the third ray of the fan (beam 3), which in itself is an important signal. Emission indicator above the top line (marked with a red bear) - the ability to try your luck for lovers of high-risk game. But for the rapidly rising not followed the fall. Still, the indicator follows the price, not the opposite. After a brief consolidation pound continued upward movement. There appeared a clear signal to continue the trend - the entrance into high RSI simultaneously break the resistance level 6. The next release of the indicator was an ideal opportunity to go short. But not much worse and would be a position opened for a breakthrough third tape measure beam (beam 7). True, by itself, this beam 7 is questionable as the support line, but his breakthrough coincides with the break with a good guide on the display, so there is reason to open a position. After that, folding rule, made up of beams 4, 5 and 7, it is confirmed that figure and gives the opportunity to open two more short positions - on his second break and the first rays. And finally, a breakthrough couple benchmarks, D and 8 - a buy signal on the right edge of the chart.

The system of four lines in the foreign exchange market

Typical results of testing the system on the daily charts of major currencies are shown in Table 1. This test took into account four different support positions:

T / P 35 - closing position upon reaching 35 points profit (take profit 35), for the Swiss franc - 40 points;

T / P 50 - the same for 50 points (55 in the case of the franc);

S / T 40 (60) - closing a position warrant a sliding stop-trade, protecting the profits of $ 40 (or 60) points.

The table shows the following characteristics:

- The total number of positions for 13 weeks and the percentage of loss-making positions;

- The average size of stop-loss in points;

- An indicator of MIDD (Maximum Intra Day Drawdown) - the maximum cumulative loss (the maximum amount by which the expense of rolling away in the course of trade from earlier high)

- The total amount of profit (in points) in the account at the end of the testing period.

Frequency position is an important indicator. Thus, according to the test over a period of 38 weeks, I-III quarters of 2000: the pound was open 188 positions on the euro 173, 196 on the franc, the yen 197. On average, it is 20 items per week for the four currencies. Of course, these numerical results can only serve to illustrate the possibilities of the system. But it is simple and intuitive and it can be used for intraday trading on the FOREX.