There is a new category of technical analysis, available for trading in the FOREX markets. It is called the theory of shifts, and this new technique is based on the change factors that break the three basic types of diagrams conditions:
- Markets of pulp
- emerging markets
- downstream markets
What does the theory of displacement shifts the theory, it is important to focus on data and ignores data that are responsible for the false signals and noise. Trading approach changes the theory works better than any other form of technical analysis because it focuses on the scientific analysis of prices. Today, most of the technical analysis focuses on the closing price as the main part of the data is analyzed. The main problem lies in the fact that the closing price – it's a moving target. Many traders do not realize that the performance – it is nothing like measurement devices, and it should be treated that way. As for the cost of measurement, you need a stable data to get an accurate reading. I like to use the example of an attempt to weigh yourself on a scale. If you continue to jump, while trying to weigh and get an accurate reading. This is what makes the closing price. It changes every time there is a check mark or tick down, and I was reading most of the indicators, which leads to a lot of noise and false trading signals.
Shift Trading coefficients based on the undisputed facts of the market trends. A few examples:
- on the chart can be increased only if they make a new high.
- on the chart may be reduced only if they make a new low.
- On the array of soft markets, there are bars that have a high percentage of overlap.
As a trader, the theory of change factors – a great tool for disciplined traders and follow strict commercial principles. As an example, we consider the evidence and testimony Shift Ratios, given in three market conditions:
- The trend
- Down trend
If market conditions prevail, coefficient of variation of inner change – a scene that defines this type of market. changes in the internal shift factor – a measure Interest percentage bar that overlaps the previous line. All market markets have a high percentage of bars that overlap with each other. It is easy to see on the chart, but most indicators simply can not measure these types of conditions, because they are based on the closing price.
If the market is in a trend that the upper shear rate – a rate which determines the price changes. In trending markets on the graph bar must make higher highs, and it is an indisputable fact of emerging markets that are moving.
During market declines the lower change in market & # 39 is an indicator that measures the strength of a trend. This, again, is based on the indisputable fact that in order to reduce market is necessary to reduce lows.
In the end, these methods work, and the proof is in the rear test. Dirty secret is a lot of indicators: they do not work, and therefore nobody is ready to show any test results. Thus, if you want to find the best FOREX trading indicator that you need to look at the factors theory of change. If you want a consistent and proven results, as a trader, you need to focus on important data and ignore the data, which are responsible for noise and lag signal.