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FOREX Surfing

Trading Tactics "surfing"

New approaches to old trading on markets

I'm not in vain called this section "new old tactic." Indeed, the solution lies on the surface, and all who work, or trying to work, the traders tried to apply this approach. The essence of the second approach in the immediate closing of positions at the first sign of deterioration, with an increase in losses. It's simple, but ... After opening the position, we immediately have loss spread. What, just close? Stupid. So, says trader have to wait a bit, that is, move the stop away. Where? How far? And smooth transition to the first approach, with large feet, long perezhidaniyami, etc. For large feet require mandatory taking big profit, or mat. waiting to be negative tactics. A probability taking profit falls sharply enough, and to increase it. (In general, then I very much separate myself now, considering that within the day, we sell noise).

Small instantly stop working. Moreover, if You'll put a stop not on paper, and put the broker, I think, Many brokers will be deliberately "tick" on your foot. And there will be in his own right - do not forget, you are trading with your broker, not as a faceless market. Thus, you will inevitably lose again their money.

big feet, besides the fact that sometimes works, occasionally much easier to deposit and forcing us to start all over again for a long time throw us off the market. Who knows the painful state of uncertainty, when opened, for example, on Monday, all week watching with bated heart, as the market moves against your position, and only on Friday, can (And sometimes can not!) Closed with a profit of a few paltry items and with a sense of happiness that "jumped out" without loss. By the way, just after that, often, the course goes for 100 points in the direction of your already closed position. On the market, it has a peculiar sense of humor! A week passed in vain, and how many nerves and health spent ...

with me had such "hang" for almost a month, and more. A serious feeling. And more than once asked himself in this state - Why not during shut down, do not turn around and not play another direction, building up a deposit? And really, why? Because it is dictated by The first approach - to wait for the planned profit (or stop operation). Wait, stop!
It would seem - a dead end. But I am sure that the inquiring minds of many of my colleagues find ways out of this impasse, and successfully use the second approach in its work. One of the options, I think, found me, and I suggest you for consideration and deliberation.

First, I put forward the lemma (who remember - this is the assumption does not require proof). Here it is: any open position which - While profitable. To check it, I spent a couple of weeks - opened on a demo account in different currencies in different directions. So, during the first 10 minutes 99% of positions were profitable. More than half of them, after that, went for a long time at a big disadvantage, a small amount - Gave a good profit, and - quickly, others - "swinging" at the opening of the day and closed at the end of the day.

When I say profitable, which means that they bring income and a more pips (and then for many up to 50 pips - no profit).

It turned out the first rule: once the position become profitable, it must be close at worst-case scenarios, with at least zero profit (no loss). Achieved at this level profits will be called the first level.

However enrich broker spreads, no "otschipyvaya" at its expense, how - something is wrong. Therefore, we apply the second rule: if reaching the planned second level of profit, we must move in worst-case scenarios with the first level of profit.

"peck" on the 1 - 5 pips of profit often effective, but tedious and dangerous. We need a rule that allows sometimes take a handsome profit. Let's formulate it: When the third level of profit, we limit the losses on the second level and "let profits run ", compressing profit trailing stop, or until clear signs of reversal.
Like good looks, right? But, unfortunately, at the commencement, each position in the field of damages, and, at times, quite a long time. What to do at this time? How to prevent losses escalate into unacceptable big? How to wait for the position will become a profitable?

And there is no getting away from closing on what - then, before designed, levels, as a rule - rather large. That is - say reader - as said - the break-even trade, without loss of planned ... With the break-even - not to say that damages are not planned - this is true. Here, the main difference between the first and second approaches.

So, when we close the position (apart from the above the closing of a profit)?

position is closed immediately when the signal that opened position, cancel, or reverse.

position is closed immediately when the levels overcoming of which is a signal of a reversal movement. At the same time possible turn position in the opposite direction.

position is closed after the time scheduled to maintain this position.

the difference? We are not in any case do not give the position "Hang". We do not plan to, say, 57 points stop loss just close the position when the hold it no longer makes sense. Other Cities - Closed, waiting time for a new entrance. And so - over and over again, day per day.

more elaborate. And what if the price is one tick "flew" 100 points in a loss? Decided to close - so close. Otherwise, the following tic, it will fly another 300 points. You have not seen such movements? Believe me, and they used to be. (Just do not "run up" for such traffic, we'll talk about it).

And there are three very important points:

Closing a position is not at a specific price, a decision is made. That is, if you decided to close, and sent request broker, do not look at what he sent, close the position. Vibrations expectations, etc., as a rule, lead to significant deterioration of the situation.

tactic requires a professional attitude to trade that is hard work for hours, steady airflow. It was at that moment You leave to smoke, or take out the trash, it all happens. If even a house fire - at first close position, and only then take out the furniture. It You have to understand, it must understand your loved ones, and not distract you from work.

The second approach is very important to prediction time and direction of entry.

If you are unable to several hours in a row hold steady airflow behind the monitor, while devoting only trade - better and do not try to use the second approach. Work on tactics, using The first approach, such as the UK, or enjoy a positional trade, work dayly on schedule. Very simple - draw a channel on the chart and open dayly from border to border points with stops at 150 - 200. But no more than 1 / 10 deposit. Channel is not drawn - do not trade at all. Against the trend - It is better to abstain. Just be sure wait for the channel of contact price however improbable this level does not appear, it still happens. Y You will have only 1 - 2 trades per month, but the most coveted 200 - 300 pips in a month they give.

Before we pass to the description of the trading strategy, let a few comments. Basically, what I have already said quite enough to build their tactics following the market. However, I venture to be "Cluttered" stream of letters with requests to tell "exactly" how should trade. Well, I'll tell you. But please do not ask me where I got these or other values, some have appeared in the long-term tests, some - intuitively, some - in general, "with ceiling. " Think about, try your values, you can still best results are obtained.

In - Second, I will often use options. It inevitable, since it is impossible to work effectively with a flexible and changing Market set strict rules unchanged. No need to complicate the work of the trader but will not reduce it to the assembly of finished parts stools.
Third, our journey will be rather convoluted and confusing. That is, after As we talk about tactics, considering its elements, we go back and talk about the timing and direction of entry. During this we will consider some of those tools. analysis is not considered earlier. Then we'll deal with that with what probably should have started - organization and planning of the trader.

Then go back to the tactics and look at some more options. Well, there you go?

Trading Tactics "surfing"

As the name suggests, this tactic is aimed at follow the waves of the market. Although this feature is determined by its signal and the order of entry into the market, but out of the market is flexible enough it is described above, the second approach. That's me to the fact that these two components can easily be dismembered and "connected" to others, based on other principles.

order entry, entry signals - a description that will quite a long time, so we first discuss in detail with the closing of position, then proceed to "sweet."
In this tactic, as in all others, the successful result, I believe, largely determines the effectiveness of tactics in general. It is in delaying the exit from a profitable position or a trader receives very little or even losses. It is not decisive in the performance of the trader stop their own deposit is destroyed. The market always gives chance, but we do not always use it.

I recall the basic rules of the position is closed:

position is closed immediately when the signal that return position, cancel, or reverse.

position is closed immediately when the levels, to overcome which is a signal of a reversal movement. At This position can turn in the opposite direction.

position is closed after the time scheduled to maintain this position.

These principles will perform, regardless of whether the whether the position in profit or loss.

will explain and clarify each position:

position is closed immediately when the signal that return position, cancel, or shifted to the opposite .

be sure, the signals we mean here the various combination of the price chart and technical analysis tools. The specific Signals used in this tactic, it will be later, here I want to to clarify a few characteristics of signals.

We use the notion of an incomplete - complete signal, unconfirmed - confirmed signal. What's the difference? How long describe a simple example, one of the well-known signal for the opening position is the intersection at the cost of the average. It is assumed that the signal completed when the time interval (bar) closes after crossing higher or lower prices. However, a cursory glance at the chart shows that this signal hopelessly behind, and open late. Therefore, the trader has to to act a little bit earlier, before the end of the bar, and when there is price crossing the middle. This is an incomplete signal. Whether to use such signals? Absolutely, otherwise treder will often open later, out of place.

assume the average price has crossed the bottom up, by submitting incomplete signal to buy, and treder opened position. When the bar closes higher prices - a signal is confirmed. It is now - a confirmation signal. Some signals are a combination of several instruments, and they reinforce or weaken the signal. But it may be that the bar back under the middle, and closed there. Thus, the signal was not confirmed, and in compliance the above rule, you should immediately close the position. Also nepodverzhdenny signal is generated when used in combination with other strong signals, which suddenly showed the opposite result (eg MACD has moved down).

(Just note - these signals are the tactics of "surfing" not used, it is just an example).

position is closed immediately when the levels overcoming of which is a signal of a reversal movement. At the same time possible turn position in the opposite direction.

I am convinced that any tactics should be, except for specific signals, significant levels of use. Especially important are placement levels Mass stops. How can they know? First, read news feeds, there are always those levels are reported, and is quite accurate. In - the second, just Look at the chart and imagine where you would have set foot. I am sure You put them there, where to put the majority of traders. So, at the intersection of these levels is a rebound movement, especially corrective movement, or breakdown, which occurs frequently when driving the trend. Thus there is a fairly dramatic change in the price. This can be and should be used for profit, based on this tactic, working on the "breakdown of volatility." "Surfing" is not is a tactic, but when approaching this level must be extremely cautious and act decisively just before the breakdown, then will be too late.

Here is an example. We will be using in the first turn, turning signals, to keep in sync with the wave motion. But for buying, for example, slightly above the stops to sell, you need a closely monitor the market, as in case of breakdown of the level of market may be a few minutes to figure (100 points) below your purchase. I usually put under such levels to stop the turn, and almost always it will not only save but also makes a profit.

position is closed after the time scheduled to maintain this position.

Few of beginners in the planning of the transaction (Who ever plans to) establish a "lifetime position." However - it seems to me quite important. In Tactics "Surfing" will limit the lifetime of the trading session, ie, all open positions in the morning should be covered, regardless of their condition. Why such a demand? Experience shows that if one day your position not confirmed by the market, it should be eliminated, since the probability further deterioration is very high. Sleep on it.

The above rules basically describe the emergency measures, and their goal - to save the trader from large losses in case of error (not confirmation) when opening a position. Much more pleasant to close a position with profit, and talk about it now.

basic rules I've outlined in a previous newsletter, remains to "fill" the specific numerical targets. Once again - do not ask me why they just are just I like these. Try the other, experiment.

Stage 1. Takeoff.

So, after some time after opening the position was "Form" profit. This happens with almost every position. Upon reaching 10 points profit I put a mental stop at the level of price open + 1 point. Now, if the price of "rolls" and remains less than 5 points of profit, I instantly close up. Moreover, if Profit during the request again, "jumps" more than 10 points - I do not close, but if it is less than 5, or (especially) already in the red - I close my stance a matter of urgency. What if I closed position, and Price turned and went back to the same side (which was the opening)? If the signal is preserved at the opening - again open position. If there is no - Waiting for the next signal.

This sequence of actions many consider "pipsoedstvom" and in vain. It's just a technology is relatively safe start. That makes "pipsoed" in a situation where the position is 3 - 5 points? He just closes it. Here another, here - quick and immediate reaction when the market does not confirm our statement. But the purpose of our are not a few points, but a few dozen (at least).

stage 2. Disengage.

After overcoming the mark of 15 points I put profit stop at five points, and forward to the development of further developments.

Stage 3. Climb.

After overcoming the mark of 25 points, depending on the market volatility, I or close a position (if flat), as the 25 points a day is enough to double the deposit for the month of work, or if the price confident enough to move in the direction of profitable growth, "trailing" Stop every 10 points at 30 - 50 points. The choice of specific distance depends, again, as the behavior of the market.

when to close a position? At all these stages should be remember the three rules of the immediate closure of positions. So I close position, unless, of course, reached the third stage, when produced signal to open positions in the opposite direction, or the day ends. Of course, you can open in another direction. But I, when the plan Day "to raise revenue" is made, move on to other, more calm, studies. As the Japanese say "good luck be fed." Usually I first transaction - profit, the second - losing, and we have then the whole day to work hard to rectify the situation as it. So what? To keep warm? However, you can on - another ...

Who - something like a herring, and to whom - cakes, while others love the one and the other, but - with ketchup. Also in the trade - should be some freedom, or misfortune. Therefore, we envisage in the tactics of "surfing" ability to work in accordance with the first approach. In this action Trader much simpler and work as a whole is not as intense.

sequence of actions in this case is as follows:

after the opening position is set to stop - loss order;

as the market moves in the direction of earnings growth is portable stop, compressing profit, it will be in the tactics do not on any a fixed distance, and at certain levels;

close when the planned level of profit or at operation stop - loss.

It's simple, but sometimes have to wait quite significant reversals against the position. But for many it is preferable to than "popping" out of the market at the slightest danger, and often again open position (to jump into cold water).

Just a question - how best? I have already said how - then: in Basically, all (more or less reasonable), with the precise execution of tactics are approximately the same efficiency (how ironic). Therefore, the entire The problem is to select the suitable for you personally, your temperament, exposure, the levels of greed and fear (courage). If you will succeed - and work will, and harm your body will be minimal (all the same load experiencing excessive trader, where there on a rock climb, or "bungee" jump, and the next is not ...). Just do not change and combine, although would in a single transaction, it is dangerous. If we choose the algorithm which - Follow it faithfully until you close the position (and better - so far not worked out the trading session).

signals used for open positions in Tactics, "Surfing"

In our tactics I use a fairly simple and visual signals, which are formed on the candlestick chart and (or) bars, the so-called Incomplete fractals, in combination with a simple average of the order not less than 21.

with the concept of "fractal" introduced the general public Bill Williams in his famous book "Trading Chaos". Although his definition Fractal me personally several "jars". I will try "to fingers "to explain the resonant term, without distorting its mathematical essence, and briefly as possible.

fractal - the basic "building block" of chaos. Chaos - high-energy state, the convolution of countless processes reverse-ordering (for example - the cemetery, probably dream about it, many politicians campaigning for guidance "of the order in the country. " Sorry, distracted. ), In which there are "seeds" a variety of processes (ideally chaos - all the processes, probably this state and created our universe and all the processes in it). Perfect chaos has infinite entropy (uncertainty).
Now that we understand that the midden in the middle of the apartment - it is not just chaos, but - the process is more close to chaos, than the orderly As we can easily notice that the behavior of prices in the market as is often chaotic. But not always. Sometimes the behavior market is quite purposeful and orderly manner, then we say that market trend directed. Thus the entire price chart can be divided on flat areas, or noise, or units of chaos, which in fact are the a set of fractals, and more or less definite and orderly process of price movement. Moreover, it is clear that these processes would have arisen as inside the fractal. Why I said above that the definition of Wilson is not quite correctly? Because fractals are all such noise pollution, all flat, in which there is an accumulation of energy and the subsequent birth of the movement, and not only specific figure, isolated B.

Naturally there is a brilliant idea - to analyze all fractals, and to find law that allows for the mind to determine the fractal process that originates in it. The idea is not so fantastic and such studies are conducted by me, including, but results of such projections are also probabilistic in nature, and with a very small excess probabilities. "If you want to make God laugh - told him about my plans. " The most promising here is to identify the moment originated when the process is just beginning to develop. That these are going to do.

Wilson singled out an infinite number of specific combination, which we will use. He called it a combination of "fractal" we call - a reversal fractal (as we found out - not every fractal - Fractal Wilson). This combination is a sequence of 5 candles, forming a "bird", examples are:

Foreks strategy Serfing

That is, it's a combination, where the maximum spark in series rise to the middle candle, then successively lowered (or vice versa). And (important) take into account not only the bodies of candles, as in the classical analysis of the combination of candles, as necessary, and shadows.

cursory glance at any chart shows that after the last fifth candle, when the signal is completely formed, more than half cases, the movement begins in the opposite direction. That is the last 2 candles actually select all the movement and the trend is changing. In connection with that I think are unacceptable fractals retarded signal and we had to introduce his hand. This is - incomplete fractal, that is The same reversal fractal cloud, but without the last candle. Presented? Here they are in the picture:

Foreks Strategy Serfing

That this figure is interesting because it is not a fractal by Wilson, as the first candle is lower than the second, there is a consistent decrease. And I think its full fractal - a signal to buy. That is, in my Signals important relationship of the first two candles, the only important thing is that they should be both below the third candle (for a fractal for sale) or higher (For the purchase of a fractal). Here is the last candle, the position of her body with respect to the previous one, is very important. I believe a strong signal, if the body of the last Candles are not above the previous body (for a fractal to sell), even better, if body of the last candle below or equal to the previous body.

Foreks Strategy Serfing

Well, if the last candle forms a figure Harami, or absorption, a star or a hammer, or the gallows. Good, but not necessarily. That is, it complicates the analysis (to memorize and try to discover the many combined analysis of the candles), but a significant gain of efficiency is not proved.

Foreks Strategy Serfing

Here, perhaps, and all rules and restrictions. As "Homework" - "walk" on the charts, look for I described incomplete reversal fractals. Yes, this should be done on the hourly charts, with the best pre-printed on printer, and releasing such figures marker. See how these signals work. Pretty sight, I assure you.

What direction is correct, confirm your letter. Indulge in the pleasure of publishing such a letter here. Ruslan wrote: 2.5 years engaged in trading forex. Reread a lot of literature, has seen a lot of sites, but such a clear, reliable and most importantly, the submission market have not seen anywhere else! The fact that I came to understand the market only recently. My understanding is: the market is random, relative to forecast. In my opinion this is consistent with your point of view. Personally, I'm in your articles found a confirmation: the main thing to manage money! Most beginners unconsciously trying to control markets. But it is doomed to fail, You wrote of random inputs (coin). I have personally tested it in real time on a demo account such tactics. The results stunned me. If properly thought-MM (and follow him) grew by just like a snowball! It is important to understand : Any trade tactics should be based on money management, and nothing else. Technical analysis, fundamental analysis can help to find a purely psychological starting point for opening and closing of positions, not to perceive BOLEE.Nelzya signal supplied to the TA, the FA as bezuslovnyy.Eto of course my point of view, but I train it sure. Unfortunately prior to that, I poured a lot of :-( deposits. not even played yet spent. But this board for experience, but experience is priceless. When he comes to understand something, it becomes your paradigm. I'm 23, I look forward with great optimizmom.Ya very pleased that once took up the case. Never even when merging large deposits did not doubt the future success. A belief that you do, in itself, overriding condition for achieving the goal.

Tactics "Surfing." The basic algorithm

Now that we understand the basic elements of tactics, try to put all this in a more - less than a coherent system - the algorithm action.

1 Stage. Getting Started

direction of the trend (I define it by the slope of a simple average with a period of 89 or 144 on the daily chart)

direction of the market (and it may coincide with the direction trend, but maybe not, as in the correction. We define it by the slope of the simple average about 89 on the hourly chart)

Apply to chart support and resistance lines alleged cluster mass stops (which is often the same). If The graph shows a less clear-cut or shape of the channels. Analysis, cause their line (border).

Obviously, the safest is to trade in periods when these areas are the same. In this case, of course, be work out the signals to the open position, as the same direction. What do you mean - more secure? This means that the number of false alarms will be minimal.

few more false signals will occur when these direction (the trend and movement) do not match. But, anyway, to trade possible. That is, you can open a position in the direction of motion, even if it is opposite to the trend.

However, I am a resolute opponent of trade against the direction of movement. Always remember, our task is not frequently traded, and trade profitably. There is always a temptation to "catch" from the very beginning a long reversal, but this is one of the most "popular" traps for beginners. I often tell my colleagues asked for advice: do not you should try to be smarter than the market, tear off the display, look at where is the price? Oh, and open in that direction, why do you always try to sell on the rising market and vice versa?

is - a very important condition, I will repeat it again: the discovery of products produced only in the direction of the market.

Pay due attention to the preparatory phase, and follow it's not just before work and during the day - think, move lines, news and advice from banks and brokers (they usually tell where the foot has accumulated.)

2 Step. Position Opening

this - the simplest element of tactics, even to explain nothing, and no reason to fear him. There is a signal - safely open position, no signal - Sitting, waiting. Clarify - opens after the fourth candle fractal at the market at the moment.

The most important element here - setting a stop loss order. Not even going to once again discuss the need for this, I believe that has already convinced you. Where is it going to install? In general, opposite extreme is the previous candle, that is, at least if buy, and a maximum if we sell. If this distance for you too large (the deposit can not stand), it is better not open at all. For the time plots the average value of the stop is 50 - 80 points, which is acceptable.

And here we look at the line of levels and channels. If our stop is close to this line, it is better to move it to this line and, for aggressive players to put additional warrant a reversal position. I repeat - very often it can not only compensate previous loss, but also to take a decent profit. How to transfer? Not less than 20 points - 25, or release touches and get the double loss.

Step 3. Maintenance of open positions

The most difficult step, requiring endurance, discipline and quick action. Do not sleep for display!
You can, of course, pre-set take profit order quantity 5 - 10 points, and rely on the fact that the warrant will work with very large probability. Even suggest to do it in the first stage of mastering tactics. It's simple, and it's not going to discuss.

If the take is not set - will have to tighten and work. If the price goes negative - nothing can be done, we wait and hope that the stop not "clicks." If a plus, we begin to "purse". When profit reaches 10 points, prepare a form to order at closing. If profit falls less than 5 points - immediately close at that price, who gave BROKER. We must act quickly and decisively! In fact, I did not watch any quotation given broker, just close and all.

luck, the price reaches 15 points of profit. Now you can put a stop order above the opening price by 5 points, and relax. Now we were not in danger! Oh, this is - an amazing feeling!

Profit meanwhile growing. We look at the dynamics of the market, the presence of a number of levels. If the market is "sluggish" - better to close position, a very decent result. Wants more - is short on distance 30 - 50 pips from the market every 10 - 15 points. I think it is clear I talked about this technique when discussing the tactics of the UK.

In conclusion - a few nuances:

choice of time period schedule. Tactics (signals) works well on the daily chart and on the hour. But on the daily account establish a very large foot, it is - for position players. I prefer hourly charts. On the longer (for example - 6 chasovikah) is very small signals and has to put a very big feet, the shorter - too many false signals.

Despite its apparent simplicity, this technique is quite difficult to implement, and go to it should be only after a complete assimilation on demo accounts after obtaining a stable of profitable trading results.

For amplification of the signals is quite acceptable to use "favorite" technical analysis tools. In this work only the signals Pending fractals, confirming signals of your instrument. Transactions, of course, will be less, but it is likely, and almost Lossow will not.

If the direction of movement can not be identified

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