Apakah triple screen trading system work

Sistem Perdagangan Triple Screen - Bagian 7 Sistem perdagangan triple screen dapat diilustrasikan dengan baik dengan metafora laut. Layar pertama sistem perdagangan layar tiga mengambil perspektif jangka panjang dan menggambarkan pasang pasar. Layar kedua, diwakili oleh sebuah osilator. Mengidentifikasi gelombang jangka menengah yang melawan arus. Layar ketiga menyempurnakan sistem dengan ukuran jangka pendeknya, mengidentifikasi riak-riak yang bergerak ke arah arus pasang. Ini adalah pergerakan harga intraday jangka pendek yang menunjukkan titik masuk untuk pesanan beli atau penjualan Anda selama hari perdagangan. Jika Anda membutuhkan penyegaran, periksa Triple Screen Trading System - Bagian 1. Bagian 2 dan Bagian 3. Untungnya, bagi kita yang telah menjadi bosan menafsirkan grafik atau indikator teknis di layar pertama dan kedua, layar ketiga tidak memerlukan tambahan bakat teknis. Sebagai gantinya, layar ketiga memberi kita teknik untuk menghentikan pesanan. Baik membeli stop order atau menjual stop order, tergantung pada apakah layar pertama dan kedua mengarahkan Anda untuk membeli atau menjual pendek. Lebih khusus lagi, layar ketiga disebut teknik trailing buy stop dalam uptrend dan teknik trailing sell stop dalam downtrends. Bila tren mingguan naik (dikenali oleh layar pertama) dan tren harian turun (diidentifikasi oleh layar kedua, atau osilator), menempatkan trailing buy stop akan menangkap berjam-jam. Ketika tren mingguan turun dan tren harian naik, trailing sell berhenti menangkap breakout downside. Setiap situasi layak untuk diperiksa lebih lanjut. Teknik Menghentikan Beli Stop Bila Anda telah mengidentifikasi bahwa tren jangka panjang (mingguan) bergerak naik dan osilator osilator jangka menengah Anda turun, sistem perdagangan triple screen akan mengaktifkan teknik stop stop trail. Untuk menghasut teknik stop stop trailing, letakkan pesanan beli satu tick di atas tinggi hari sebelumnya. Kemudian, jika harga rally, Anda akan terhenti dalam posisi long otomatis pada saat rally melebihi hari sebelumnya tinggi. Jika, bagaimanapun, harga terus menurun, stop order buy anda tidak akan tersentuh. Teknik ini memungkinkan Anda terhenti dalam pesanan Anda jika riak terpendek memiliki momentum yang cukup untuk menyalakan gelombang ke gelombang yang lebih besar. Oleh karena itu, stop pembelian sangat terkait dengan apa yang kebanyakan pedagang akan label sebagai momentum investasi. Namun, penggunaan ketiga layar dalam sistem perdagangan layar tiga kali memberikan gambaran pasar yang jauh lebih detail dan halus daripada konsep momentum sederhana yang umumnya disediakan. Untuk bacaan lebih lanjut, lihat Introduction to Momentum Trading. Jika Anda ingin lebih menyempurnakan teknik stop stop trailing, Anda bisa menurunkan pesanan beli Anda keesokan harinya sampai tingkat satu di atas harga bar terakhir. Terus turunkan stop beli Anda setiap hari sampai berhenti (mengisi pesanan Anda pada saat yang terbaik) atau sampai indikator jangka panjang (mingguan) Anda membalikkan dan membatalkan sinyal beli (menyelamatkan Anda dari kerugian). Alasan mengapa teknik buy stop diawali dengan kualifikasi trailing berhubungan dengan sifat cair stop order beli ini. Anda harus, bagaimanapun, tetap waspada dalam memantau momentum pasar. Dan Anda harus rajin terus-menerus memindahkan stop buy ke satu tick diatas harga bar terakhir. Prosesnya bisa melelahkan, tapi akan memastikan bahwa Anda memenuhi pesanan Anda dengan harga terbaik atau menghindari perdagangan yang buruk sama sekali jika pasar gagal bergerak. Trailing Sell Stop Technique Situasi yang berlawanan terjadi ketika tren jangka panjang (mingguan) Anda turun, dan pada saat itu Anda akan menunggu demonstrasi di indikator jangka menengah (osilator) Anda untuk mengaktifkan teknik stop stop sell. Dalam teknik trail stop selling. Anda memesan untuk menjual short tick di bawah bar terendah. Saat pasar turun, Anda otomatis akan terhenti dalam perdagangan singkat Anda. Jika, bagaimanapun, pasar terus rally. Anda dapat terus meningkatkan pesanan jual Anda setiap hari. Berlawanan dengan teknik stop stop, teknik trailing sell stop dimaksudkan untuk menangkap pelemahan downside intraday dari uptrend harian. Seperti yang Anda lihat, pelarian turun intraday bergerak ke arah arus pasar, yang dalam hal ini merupakan tren turun mingguan. Stop trail trail and trailing sell stop technique adalah penyempurnaan utama pada sistem trading yang sangat kuat dalam dua layar pertama dari tiga layar. Dengan menggunakan indikator yang kurang berkembang, banyak trader pemula akan terlibat dalam sistem trailing stop order ketika mereka mencoba mengukur momentum pasar. Dengan menggunakan grafik jangka panjang dan osilator jangka menengah terlebih dahulu, Anda dapat memanfaatkan riak pasar jangka pendek saat Anda melakukan perdagangan terbaik yang memungkinkan intraday ini. Bagian selanjutnya dari seri ini akan membawa sistem perdagangan triple screen menjadi dekat. Perjalanan melalui ketiga layar itu sudah lama, namun hasilnya sangat berharga. Jika Anda berhasil menerapkan sistem perdagangan triple screen secara maksimal, Anda berada di jalan untuk maju ke depan banyak pedagang lain yang dengannya Anda bersaing untuk mendapatkan keuntungan. Untuk mempelajari bagaimana sistem perdagangan tiga layar benar-benar membantu trader untuk mendapatkan keuntungan. Dan hindari kerugian yang signifikan, beralih ke Triple Trading Systems - Bagian 8. Frexit pendek untuk quotFrench exitquot adalah spinoff Prancis dari istilah Brexit, yang muncul saat Inggris memilih. Perintah ditempatkan dengan broker yang menggabungkan fitur stop order dengan pesanan limit. Perintah stop-limit akan. Ronde pembiayaan dimana investor membeli saham dari perusahaan dengan valuasi lebih rendah daripada valuasi yang ditempatkan pada. Teori ekonomi tentang pengeluaran total dalam perekonomian dan pengaruhnya terhadap output dan inflasi. Ekonomi Keynesian dikembangkan. Kepemilikan aset dalam portofolio. Investasi portofolio dilakukan dengan harapan menghasilkan laba di atasnya. Ini. Rasio yang dikembangkan oleh Jack Treynor bahwa langkah-langkah pengembalian yang diperoleh melebihi yang dapat diperoleh dengan tanpa risiko. Bagaimana Menggunakan Rata-Rata Bergerak Sederhana dengan Tepat untuk Waktu Saham Salah satu tantangan terbesar yang dihadapi investor adalah mencari tahu kapan waktu yang tepat untuk Membeli atau menjual saham Sebagian besar investor biasa tidak memiliki alat analisis teknis teknis yang canggih untuk membantu mereka menentukan kesehatan teknis stok favorit mereka. Bahkan jika alat TA seperti Metastock. Quotetracker atau eSignal tersedia, jumlah dan kerumitan beberapa indikator analisis teknis yang tersedia pada akhirnya mengarah pada beberapa bentuk analisis-kelumpuhan. Hasil akhirnya, tidak mengherankan jika investor terganggu dari tujuan utama menemukan titik masuk yang optimal untuk membeli atau menjual saham mereka. Memperkenalkan Sistem Sederhana untuk Mengidentifikasi Kecenderungan Stok Apa yang akan diperkenalkan ke sini adalah adaptasi dari salah satu sistem perdagangan yang paling efektif, yang pertama kali diungkapkan oleh Dr. Alexander Elder (penulis Trading for a Living), yang disebut Triple Screen Trading Sistem. Sistem adaptasi kami akan menggunakan Simple Moving Averages (SMA) sebagai bagian dari Triple Screen Trading System, dibandingkan dengan yang asli yang didasarkan pada salah satu dari berikut ini: Stochastics. MACD atau RSI. Keseluruhan premis sistem ini tidak bergantung pada satu indikator karena tidak ada satu indikator pun yang bisa efektif setiap saat. Menggunakan beberapa variasi indikator mis. Kerangka waktu atau periode yang berbeda, akan membantu menciptakan metodologi perdagangan yang lebih kuat dan andal. Bagaimana Mengurangi Lag dalam Moving Averages Simple Moving Averages (SMA) adalah beberapa indikator teknikal yang paling populer dan umum digunakan oleh trader profesional dan pemula. Moving averages umumnya diketahui sebagai indikator lagging dan entah bagaimana, kata simple di SMA nampaknya memiliki konotasi negatif karena banyak yang berpikir bahwa trading tidak akan pernah sederhana. Memang benar SMA tertinggal, tapi ini tidak harus menjadi batasan dan bisa dikurangi. Anda akan menemukan bahwa dengan menggunakan beberapa SMA, kerugiannya dapat diatasi untuk membuat Anda tetap di sisi kanan perdagangan, sebagian besar waktu. Ambil contoh trader yang hanya menggunakan 200 SMA untuk bekal. Akan ada contoh dimana stok akan mulai turun tapi 200 SMA masih akan mengarah ke atas. Teka-teki di sini bagi kebanyakan trader adalah apakah mereka harus bertahan, karena tren jangka panjangnya masih naik, atau sell karena sahamnya mampir. Penggunaan yang sangat sempit oleh banyak pedagang ini adalah bagaimana SMA mendapatkan reputasi buruk mereka. Cukup menambahkan SMA 5, SMA 20 atau 50 SMA ke dalam persamaan akan memperingatkan trader dari setiap pembalikan potensial karena SMA ini akan bereaksi lebih cepat dari SMA 200 terhadap setiap perubahan harga. Mengapa Simple Moving Averages Work, When Used Correctly Weve menyentuh salah satu kelemahan utama SMA dan bagaimana hal itu bisa dikurangi, jadi apa kelebihannya. Nah, fakta bahwa SMA begitu dikenal bahwa pedagang lantai profesional, manajer hedge fund dan bahkan anak-anak yang bersinar sepatu memantaunya sehingga membuat indikator TA jauh lebih hebat. Gelombang pembelian (atau penjualan) ketika rata-rata pergerakan utama, terutama SMA 200, ditembus merupakan bukti kemungkinannya. Baca Apakah Analisis Teknis Benar-benar Bermanfaat untuk memahami mekanisme mengapa beberapa indikator teknis begitu kuat, meskipun indikatornya, sekilas, tampaknya tidak sesuai untuk tugas yang sedang dihadapi. Menggunakan Multiple Time-frame MAs Jadi mengapa trader sering kehilangan saat menggunakan SMA dan akhirnya menyerah pada indikator ini Kebanyakan trader pemula umumnya membuat kesalahan dengan hanya menggunakan satu SMA tunggal untuk membuat keputusan trading mereka. Di sinilah kesempatan untuk kesalahan sangat tinggi. Bayangkan saja situasi dimana seorang trader membeli berdasarkan 5 sinyal beli SMA tapi tidak menyadari bahwa SMA 200 ini menunjukkan adanya tren turun yang kuat. Pedagang itu mungkin beruntung dan menghasilkan sejumlah uang, namun dalam jangka panjang, tren jangka panjang yang akan ada akan menang dan kontra perdagangan tren akan berakhir dengan kehilangan banyak pedagang. Segmen Tren BannRonn dari situs web kami menyediakan beberapa nomor SMA untuk membantu Anda membuat keputusan teknis yang rasional saat memasukkan entri dan keluar ke saham favorit Anda. Berikut adalah beberapa aturan sederhana yang perlu diingat saat menggunakan data ini: Aturan Trading EntryExit Tren jangka panjang (200SMA) - Tren jangka menengah - Up Titik masuk terakhir akan ditentukan oleh SMA 5 atau 20 SMA (tergantung preferensi). Kesabaran sangat penting pada saat ini. Tunggu stok mundur dan SMA 5 atau 20 menunjukkan tren turun. Kemudian masuk saat SMA 5 atau 20 berubah dan menunjukkan uptrend. Stop loss point harus berada di tempat SMA 50SMA atau 200 secara tegas menunjukkan tren turun dan juga tergantung pada tingkat kenyamanan individu dan penilaian risiko. Untuk keamanan yang lebih besar namun dengan potensi risiko kehilangan banyak perdagangan bagus, titik masuknya dapat disetel dengan baik di sekitar SMA 50 atau 200. Untuk posisi pendek, cukup membalik hal tersebut di atas. Lihat tabel di sebelah kanan untuk contoh Buy Zones berdasarkan peraturan yang dibahas. Tip Tambahan untuk Perdagangan yang Sukses Tetapkan target keuntungan. Banyak pedagang dan investor membiarkan keuntungan mereka menguap karena mereka tidak mengambil keuntungan. Jika Anda yakin saham masih memiliki ruang untuk pergi, maka setidaknya ambil keuntungan parsial. Beberapa target bagus untuk mengambil keuntungan termasuk dukungan daerah resistansi dekat Pivot Points mis. Pivot Mingguan, R1, R2, S1, S2. Anda bisa melihat contoh di halaman support dan resistance untuk Apple Inc. Banyak waktu, trader yang gesit dapat kembali masuk dengan harga yang jauh lebih menguntungkan setelah keluar dari titik pivot. Dont menikah dengan saham. Ada hampir ribuan saham di luar sana di berbagai sektor dan industri. Jika stok tidak memenuhi kriteria Anda, cari yang lain. Jika Anda membeli saham dan kebetulan terjadi ke selatan segera, dengan semua indikator juga membalikkan, yang terbaik untuk mengurangi kerugian Anda dan beralih ke target berikutnya. Strategi Layar Ketiga - Dr. Alexander Elder Commercial Member Bergabung pada bulan Mei 2012 3.332 Tulisan Ini adalah Trend Strategy yang menggunakan sebagian dari quotThird Screen Strategyquot dari Dr. Alexander Elder. Pertama, saya menemukan dalam grafik D1 tren global menggunakan indikator MACD. Setelah tren keseluruhan jelas, saya menggunakan kerangka waktu H1 untuk bertindak dalam tren yang sama dengan menggunakan Williams Persentase Indikator. Ketika posisi dibuka, saya mengelola berita ekonomi dan analisa fundamental untuk menutup posisi jika menurut saya tren tersebut akan berbalik arah pada grafik D1. Strategi Trend yang disebutkan di atas digunakan dalam pertemuan dengan Price Action Support Resistance (PASR). Bidang utama Support and Resistance ditemukan menggunakan grafik Mingguan dan Bulanan. Penting untuk mengamati Price Action (pembentukan lilin) ​​pada tingkat Sampr yang signifikan ini sebelum melakukan perdagangan. Strategi Layar Ketiga EA EA khusus ini dirancang khusus seputar strategi ini. D1 MACD amp H1 Williams HANYA. NO EMA digunakan untuk strategi ini. Jika Anda memiliki pertanyaan tentang EA ini, silakan merujuk ke dokumen FAQ di bagian bawah posting ini FIRST Jika Anda tidak dapat menemukan yang Anda cari silahkan tolong baca keseluruhan thread ini PERTAMA Lalu, jika Anda masih tidak dapat menemukan jawaban atas pertanyaan Anda Maka jangan ragu untuk bertanya. Saya berjanji kepada Anda bahwa Anda akan belajar banyak tentang strategi ini dan akan menemukan banyak contoh langsung yang akan mencakup bagan yang mendukung strategi ini. Saya tidak ingin memberi makan orang lain di sini, semoga kita semua orang dewasa yang bertanggung jawab. Jika Anda tidak dapat membaca maka Anda tidak memiliki bisnis perdagangan Mata Uang Asing Khaled, pria yang telah memprogram strategi ini menjadi Expert Advisor, telah menghabiskan banyak waktu untuk membuat strategi ini sesederhana mungkin digunakan. Seperti yang saya katakan di atas, jika ada pertanyaan tentang EA ini atau strategi secara umum silahkan baca seluruh untaian dulu Stop Loss amp Take Profit Parameters (klik link ini untuk menemukan saran stop loss amp take profit parameters) Any and all questions in Berkaitan dengan Strategi Layar Ketiga EA dapat diminta dan dijawab di thread Dukungan Strategi Layar Ketiga. Ini akan membantu kami menjaga agar thread ini didedikasikan untuk perdagangan strategi ini dan tidak terganggu dengan pertanyaan dan jawaban Expert Advisor MT4. Penjelasan rinci tentang strategi perdagangan ini Terdengar lebih seperti tes diagnostik medis, sistem perdagangan triple screen dikembangkan oleh Dr. Alexander Elder pada tahun 1985. Alusi medis bukanlah suatu kebetulan: Dr. Elder bekerja bertahun-tahun sebagai psikiater di New York sebelum terlibat dalam perdagangan keuangan. Sejak saat itu, ia telah menulis puluhan artikel dan buku, termasuk 8220Trading For A Living8221 (1993). Dia juga pernah berbicara di beberapa konferensi besar. Banyak pedagang mengadopsi satu layar atau indikator yang mereka terapkan pada setiap perdagangan. Pada prinsipnya, tidak ada salahnya mengadopsi dan mengikuti satu indikator untuk pengambilan keputusan. Sebenarnya, disiplin yang terlibat dalam mempertahankan fokus pada ukuran tunggal terkait dengan disiplin pribadi, mungkin salah satu penentu utama meraih kesuksesan sebagai pedagang. (Lihat, Psikologi Perdagangan Dan Disiplin). Bagaimana jika indikator pilihan Anda cacat secara mendasar Bagaimana jika kondisi di pasar berubah sehingga layar tunggal Anda tidak dapat lagi memperhitungkan semua kemungkinan yang beroperasi di luar pengukurannya. Intinya adalah, karena pasar Sangat kompleks, bahkan indikator paling maju pun tidak bisa bekerja sepanjang waktu dan di bawah setiap kondisi pasar. Misalnya, dalam uptrend pasar, indikator tren berikut naik dan mengeluarkan sinyal 8220buy8221 sementara osilator menunjukkan bahwa pasar sedang overbought dan mengeluarkan sinyal 8220sell8221. Dalam tren turun, indikator tren berikut menunjukkan penjualan yang pendek, namun osilator menjadi oversold dan mengeluarkan sinyal untuk membeli. Di pasar yang bergerak sangat tinggi atau lebih rendah, indikator tren berikut sangat ideal, namun cenderung mengalami perubahan yang cepat dan mendadak saat pasar diperdagangkan. Dalam rentang perdagangan, osilator adalah pilihan terbaik, namun ketika pasar mulai mengikuti tren, osilator mengeluarkan sinyal prematur. (Untuk informasi lebih lanjut tentang osilator, lihat Mengenal Oscillator - Bagian 1, Bagian 2, Bagian 3 dan Bagian 4.) Untuk menentukan keseimbangan indikator, beberapa trader telah mencoba rata-rata sinyal beli dan beli yang dikeluarkan oleh berbagai indikator. Tapi ada kekurangan yang melekat pada praktik ini. Jika dalam perhitungan jumlah indikator trend berikut ini lebih besar dari jumlah osilator yang digunakan, maka hasilnya secara alami akan condong ke arah trend berikut hasil, dan sebaliknya. Dr. Elder mengembangkan sebuah sistem untuk mengatasi masalah rata-rata sederhana sambil mengambil keuntungan dari teknik mengikuti tren dan osilator terbaik. Sistem Elders dimaksudkan untuk mengatasi kekurangan indikator individual pada saat bersamaan karena berfungsi untuk mendeteksi kompleksitas pasar yang ada. Seperti penanda layar triple dalam ilmu kedokteran, sistem perdagangan triple screen tidak hanya berlaku satu, bukan dua, tapi tiga tes unik, atau layar, untuk setiap keputusan perdagangan, yang merupakan kombinasi dari indikator berikut tren dan osilator. (Untuk indikator lebih lanjut, lihat Indikator Ekonomi untuk Mengetahui dan Mengasarkan Psikologi dan Indikator Teknis.) Masalah kerangka waktu Ada, ada masalah lain dengan indikator tren-mengikuti berikut yang harus disetrika sebelum dapat digunakan. Indikator berikut mengikuti tren mungkin akan mengeluarkan sinyal yang bertentangan saat diterapkan pada kerangka waktu yang berbeda. Misalnya, indikator yang sama mungkin mengarah ke tren naik dalam grafik harian dan mengeluarkan sinyal jual dan menunjukkan tren turun dalam grafik mingguan. Masalahnya diperbesar lebih jauh lagi dengan grafik intraday. Pada grafik jangka pendek ini, indikator tren berikut mungkin berfluktuasi antara sinyal beli dan jual secara per jam atau bahkan lebih sering. Untuk mengatasi masalah ini, sangat membantu untuk membagi kerangka waktu menjadi satuan lima. Dalam membagi grafik bulanan menjadi grafik mingguan, ada 4,5 minggu sampai satu bulan. Beranjak dari grafik mingguan ke grafik harian, ada persis lima hari perdagangan per minggu. Naik satu tingkat lebih jauh, dari grafik harian sampai jam, ada antara lima sampai enam jam dalam hari perdagangan. Untuk pedagang hari, grafik per jam dapat dikurangi menjadi grafik 10 menit (penyebut enam) dan, akhirnya, dari grafik 10 menit sampai grafik dua menit (penyebut lima). Inti dari faktor lima konsep ini adalah bahwa keputusan perdagangan harus dianalisis dalam konteks setidaknya dua kerangka waktu. Jika Anda lebih memilih untuk menganalisis keputusan trading Anda menggunakan grafik mingguan, Anda juga harus menggunakan grafik bulanan. Jika Anda melakukan perdagangan hari menggunakan grafik 10 menit, sebaiknya analisis dulu grafik per jam. Setelah pedagang memutuskan pada kerangka waktu untuk digunakan di bawah sistem layar tiga kali, ia memberi label pada kerangka waktu ini sebagai kerangka waktu antara. Jangka waktu jangka panjang adalah satu urutan lima lebih panjang dan jangka waktu jangka pendek adalah satu urutan besarnya yang lebih pendek. Pedagang yang melakukan perdagangan mereka selama beberapa hari atau minggu akan menggunakan grafik harian sebagai kerangka waktu antara mereka. Jangka waktu jangka panjang mereka akan menjadi bagan mingguan grafik per jam akan menjadi jangka waktu jangka pendek mereka. Pedagang hari yang memegang posisi mereka kurang dari satu jam akan menggunakan grafik 10 menit sebagai kerangka waktu antara mereka, grafik per jam sebagai kerangka waktu jangka panjang mereka, dan grafik dua menit sebagai kerangka waktu jangka pendek. Sistem perdagangan triple screen mensyaratkan grafik untuk tren jangka panjang diperiksa terlebih dahulu. Hal ini memastikan bahwa perdagangan mengikuti arus tren jangka panjang sambil membiarkan masuk ke perdagangan pada saat pasar bergerak sebentar melawan tren tersebut. Peluang beli terbaik terjadi ketika pasar yang naik membuat penurunan yang lebih singkat, peluang shorting terbaik ditunjukkan saat rally pasar yang jatuh sebentar. Bila tren bulanan naik, penurunan mingguan merupakan peluang beli. Rally per jam memberikan kesempatan untuk pendek saat tren harian turun. Pasar saham umumnya dianggap mengikuti tiga tren, yang analis pasar telah mengidentifikasi sepanjang sejarah dan dapat mengasumsikan akan berlanjut di masa depan. Tren ini adalah sebagai berikut: tren jangka panjang yang berlangsung beberapa tahun, tren menengah beberapa bulan, dan tren minor yang umumnya dianggap kurang dari beberapa bulan. Robert Rhea, salah satu analis teknikal pasar pertama, mencap tren ini sebagai arus pasang surut (tren jangka panjang), gelombang (tren jangka menengah) dan riak (tren jangka pendek). Perdagangan ke arah pasar pasang umumnya merupakan strategi terbaik. Gelombang menawarkan kesempatan untuk masuk atau keluar dari perdagangan, dan riak biasanya harus diabaikan. Sementara lingkungan perdagangan menjadi lebih rumit karena konsep sederhana ini diartikulasikan pada paruh pertama abad ke-20, basis fundamental mereka tetap berlaku. Pedagang dapat terus melakukan perdagangan berdasarkan pasang surut, gelombang dan riak, namun kerangka waktu yang harus ditempel ilustrasi ini harus disempurnakan. (Untuk membaca lebih lanjut, lihat Tren Jangka Pendek, Menengah dan Jangka Panjang.) Di bawah sistem perdagangan triple screen, kerangka waktu yang ingin ditargetkan oleh trader diberi label pada jangka waktu menengah. Jangka waktu jangka panjang adalah satu urutan besarnya lebih lama sementara jangka waktu pedagang jangka pendek adalah satu urutan besarnya yang lebih pendek. Jika zona kenyamanan Anda, atau jangka waktu menengah Anda, panggilan untuk memegang posisi selama beberapa hari atau minggu, maka Anda akan memperhatikan diagram harian Anda. Jangka waktu jangka panjang Anda akan menjadi satu urutan lebih lama, dan Anda akan menggunakan grafik mingguan untuk memulai analisis Anda. Jangka waktu jangka pendek Anda akan ditentukan oleh grafik per jam. Jika Anda adalah seorang pedagang harian yang memegang posisi selama beberapa menit atau jam, Anda dapat menggunakan prinsip yang sama. Rentang waktu antara mungkin merupakan bagan sepuluh menit grafik per jam sesuai dengan kerangka waktu jangka panjang, dan bagan dua menit adalah kerangka waktu jangka pendek. (Untuk membaca lebih lanjut, lihat Day Trading: An Introduction.) Layar Pertama Sistem Perdagangan Triple Screen: Market Tide Sistem perdagangan triple screen mengidentifikasi grafik jangka panjang, atau arus pasar, sebagai dasar untuk membuat keputusan perdagangan. Pedagang harus mulai dengan menganalisis grafik jangka panjang mereka, yang merupakan satu urutan besarnya yang lebih besar dari kerangka waktu yang akan diperdagangkan oleh pedagang. Jika Anda biasanya memulai dengan menganalisis grafik harian, cobalah menyesuaikan pemikiran Anda dengan kerangka waktu yang diperbesar lima, dan mulai analisis perdagangan Anda dengan memeriksa grafik mingguan. Dengan menggunakan indikator tren berikut, Anda kemudian dapat mengidentifikasi tren jangka panjang. Tren jangka panjang (market tide) ditunjukkan oleh kemiringan histogram konvergensi rata-rata pergerakan mingguan (MACD) mingguan, atau hubungan antara dua bar terakhir pada tabel. Ketika kemiringan histogram MACD habis, sapi jantan memegang kendali, dan keputusan perdagangan terbaik adalah masuk ke posisi yang panjang. Bila kemiringannya turun, beruang memegang kendali, dan Anda harus memikirkan korslet. (Untuk mempelajari lebih lanjut, lihat Perdagangan Divergence MACD, Moving Average Convergence Divergence - Bagian 1 dan Bagian 2.) Indikator tren berikut yang disukai trader secara realistis dapat digunakan sebagai layar pertama dari sistem perdagangan triple screen. Pedagang sering menggunakan sistem directional sebagai layar pertama atau bahkan indikator yang kurang kompleks seperti kemiringan rata-rata pergerakan eksponensial 13 minggu dapat digunakan. Terlepas dari indikator tren berikut yang Anda pilih untuk memulai, prinsipnya sama: pastikan Anda menganalisis tren menggunakan grafik mingguan terlebih dahulu dan kemudian mencari kutu di grafik harian yang bergerak ke arah yang sama seperti tren mingguan. . (Untuk info lebih lanjut, lihat Directional Movement - DMI dan Dasar-Dasar Bergerak Rata-rata.) Yang sangat penting dalam menggunakan arus pasar adalah mengembangkan kemampuan Anda untuk mengidentifikasi perubahan tren. Sebuah uptick tunggal atau downtick grafik (seperti pada contoh di atas, satu uptick atau downtick dari histogram MACD mingguan) akan menjadi sarana Anda untuk mengidentifikasi perubahan tren jangka panjang. Bila indikator muncul di bawah garis tengahnya, sinyal beli pasang pasar terbaik diberikan. Bila indikator turun dari atas garis tengahnya, sinyal jual terbaik dikeluarkan. Model musim untuk menggambarkan harga pasar mencakup konsep yang dikembangkan oleh Martin Pring. Model Prings berasal dari saat aktivitas ekonomi didasarkan pada pertanian: benih ditaburkan di musim semi, panen berlangsung di musim panas dan musim gugur digunakan untuk mempersiapkan masa dingin di musim dingin. Dalam model Pring8217s, para pedagang menggunakan kesejajaran ini dengan mempersiapkan diri untuk membeli di musim semi, menjual di musim panas, saham pendek di musim gugur dan mencakup posisi pendek di musim dingin. Model Prings berlaku dalam penggunaan indikator teknis. Indikator quotquotequot memungkinkan Anda menentukan dengan tepat di mana Anda berada dalam siklus pasar dan membeli saat harga rendah dan pendek saat harganya lebih tinggi. Musim yang tepat untuk indikator apapun ditentukan oleh kemiringan dan posisinya di atas atau di bawah garis tengah. Ketika histogram MACD naik dari bawah garis tengahnya, itu adalah musim semi. Saat naik di atas garis tengahnya, musim panas. Ketika jatuh dari atas garis tengahnya, musim gugur. Saat jatuh di bawah garis tengahnya, musim dingin. Musim semi adalah musim untuk perdagangan yang panjang, dan musim gugur adalah musim terbaik untuk penjualan singkat. Apakah Anda lebih memilih untuk menggambarkan layar pertama Anda dari sistem perdagangan layar tiga dengan menggunakan metafora laut atau analogi perubahan musim, prinsip dasarnya tetap sama. Bagan pedagang adalah alat teknis terdepan untuk membuat keputusan perdagangan dengan sistem perdagangan triple screen. Misalnya, pedagang biasanya menggunakan histogram konvergensi rata-rata pergerakan mingguan (MACD) untuk memastikan tren minat jangka panjang mereka. Memutuskan saham mana yang akan diperdagangkan setiap hari, pedagang mencari satu kenaikan atau penurunan yang terjadi pada grafik mingguan untuk mengidentifikasi perubahan tren jangka panjang. Ketika sebuah uptick terjadi dan indikatornya muncul dari bawah garis tengahnya, sinyal beli pasang pasar terbaik diberikan. Bila indikator turun dari atas garis tengahnya, sinyal jual terbaik dikeluarkan. Dengan menggunakan metafora laut yang dikembangkan oleh Robert Rhea (lihat Triple Screen Trading System - Bagian 2), kami akan memberi label pada aktivitas pasar sehari-hari sebagai gelombang yang melawan gelombang mingguan jangka panjang. Bila tren mingguan naik (uptick pada grafik mingguan), penurunan harian menunjukkan kesempatan membeli. Bila tren mingguan turun (downtick pada grafik mingguan), demonstrasi harian mengindikasikan peluang shorting. Layar Kedua 8211 Gelombang Pasar Penyimpangan harian dari tren mingguan jangka panjang ditunjukkan bukan oleh indikator tren berikut (seperti histogram MACD), namun oleh osilator. Menurut sifatnya, osilator mengeluarkan sinyal beli saat pasar berada dalam penurunan dan sinyal jual saat pasar meningkat. Keindahan sistem perdagangan triple screen adalah memungkinkan pedagang berkonsentrasi hanya pada sinyal harian yang mengarah ke tren mingguan. (Untuk bacaan lebih lanjut, lihat Mengenal Oscillator - Bagian 1, Bagian 2 dan Bagian 3.) Misalnya, saat tren mingguan naik, sistem perdagangan triple screen hanya mempertimbangkan sinyal beli dari osilator harian dan menghilangkan sinyal jual dari osilator . Saat tren mingguan turun, layar triple mengabaikan sinyal beli dari osilator dan hanya menampilkan sinyal korslet. Empat osilator yang mungkin dengan mudah dimasukkan ke dalam sistem ini adalah indeks kekuatan, indeks Elder-Ray, stokastik dan Williams R. (Untuk detail lebih lanjut, lihat Menemukan Indeks Paksa - Bagian 1 dan Bagian 2 dan The Elder Ray Indicator: Melihat Ke dalam Market Force) Indeks kekuatan dua hari eksponensial moving average (EMA) dari force index dapat digunakan bersamaan dengan histogram MACD mingguan. Memang, sensitivitas indeks kekuatan EMA dua hari membuat paling tepat untuk menggabungkan dengan indikator lain seperti histogram MACD. Secara khusus, ketika indeks EMA kekuatan dua hari berayun di atas garis tengahnya, ini menunjukkan bahwa sapi jantan lebih kuat dari pada beruang. Ketika indeks kekuatan dua hari EMA turun di bawah garis tengahnya, indikator ini menunjukkan bahwa beruang lebih kuat. (Untuk bacaan lebih lanjut, lihat Menggali Deeper Into Bull dan Pasar Beruang.) Lebih khusus lagi, pedagang harus membeli ketika indeks kekuatan dua hari EMA berubah negatif selama tren naik. Ketika histogram MAC mingguan menunjukkan tren naik, waktu terbaik untuk membeli adalah selama kemunduran sesaat, ditunjukkan oleh penurunan negatif indeks kekuatan EMA dua hari. Bila EMA dua hari indeks kekuatan berubah negatif selama tren kenaikan mingguan (seperti yang ditunjukkan pada histogram MAC mingguan), Anda harus memesan barang di atas harga tinggi pada hari itu. Jika uptrend dikonfirmasi dan harga rally, Anda akan menerima stop order di sisi panjang. Jika harga menurun, pesanan Anda tidak akan dieksekusi, Anda kemudian dapat menurunkan pesanan beli Anda sehingga berada dalam satu tick dari tinggi bar terbaru. Setelah tren jangka pendek membalikkan dan pemberhentian pembelian Anda dipicu, Anda dapat melindungi diri Anda lebih jauh dengan pemberhentian lain di bawah rendahnya hari perdagangan atau hari sebelumnya, mana yang rendah lebih rendah. Dalam uptrend yang kuat, ketentuan perlindungan Anda tidak akan dipicu, namun perdagangan Anda akan keluar lebih awal jika tren tersebut terbukti lemah. Prinsip yang sama berlaku secara terbalik selama tren turun mingguan. Pedagang harus menjual pendek ketika indeks kekuatan EMA dua hari berubah positif selama tren turun mingguan. Anda kemudian dapat memesan di bawah harga terendah bar terakhir. Mirip di alam dengan posisi panjang yang dijelaskan di atas, posisi pendek memungkinkan Anda untuk menggunakan pelindung berhenti untuk menjaga keuntungan Anda dan menghindari kerugian yang tidak perlu. Jika indeks kekuatan EMA dua hari terus berlanjut setelah penempatan pesanan jual Anda, Anda dapat menaikkan pesanan penjualan Anda setiap hari sehingga berada dalam satu tikungan terendah terbaru. Bila posisi pendek Anda akhirnya terjaga dengan turunnya harga, Anda kemudian bisa menempatkan stop pelindung tepat di atas harga bar harga terbaru atau bar sebelumnya jika lebih tinggi. (Untuk bacaan lebih lanjut, lihat Order Stop Loss - Pastikan Anda Menggunakannya.) Jika posisi panjang atau pendek Anda harus ditutup, Anda dapat menggunakan indeks kekuatan EMA dua hari untuk ditambahkan ke posisi Anda. Dalam uptrend mingguan, terus menambah rindu setiap kali indeks kekuatan berubah negatif terus menambah shorts dalam downtrends setiap kali indeks kekuatan berubah positif. Selanjutnya, indeks kekuatan dua hari EMA akan menunjukkan waktu terbaik untuk menutup posisi. Ketika diperdagangkan berdasarkan tren mingguan jangka panjang (seperti yang ditunjukkan oleh histogram MAC mingguan), trader harus keluar dari posisi hanya ketika tren mingguan berubah atau jika ada perbedaan antara indeks kekuatan EMA dua hari dan tren. Bila divergensi antara dua hari EMA indeks kekuatan dan harga bullish, sinyal beli kuat dikeluarkan. Atas dasar ini, terjadi divergensi bullish ketika harga mencapai titik terendah baru namun indeks kekuatannya membuat dasar yang dangkal. Sinyal jual diberikan oleh divergensi bearish antara EMA dua hari indeks kekuatan dan harga. Divergence bearish direalisasikan ketika harga rally ke level tertinggi baru sementara indeks kekuatan menyentuh level menengah ke bawah. Gelombang pasar adalah layar kedua dalam sistem perdagangan triple screen, dan layar kedua diilustrasikan dengan baik dengan indeks kekuatan, namun yang lain seperti Elder-Ray, Stochastic, dan Williams R juga dapat digunakan sebagai osilator untuk layar gelombang pasar. Sistem perdagangan triple screen didasarkan pada penggunaan indikator arus dan indikator tren berikut untuk membuat keputusan perdagangan. Pedagang terutama prihatin dengan perbedaan yang direalisasikan antara pembacaan indikator tren-tren jangka panjang seperti histogram konvergensi konvergensi rata-rata pergerakan mingguan (moving averagevergencevergence divergence / MACD) dan pembacaan jangka pendek yang relatif singkat dari sebuah osilator seperti indeks kekuatan, Elder-Ray , Stokastik, atau Williams R. Bagian keempat dari seri ini, akan memeriksa cara dimana trader menggunakan osilator Elder-Ray sebagai gelombang pasar, yang merupakan layar kedua dari sistem tiga layar trader. (Untuk membaca lebih lanjut, lihat Sistem Perdagangan Tiga Layar - Bagian 3 dan Indikator Ray Penatua: Melihat Ke Pasar). Layar Kedua - Penatua Ray Ray Penatua, yang dirancang oleh Dr. Alexander Elder, didasarkan pada konsep kekuatan banteng Dan daya tahan, kekuatan relatif sapi jantan dan beruang di pasar. Bull power mengukur kemampuan bull pasar untuk menekan harga di atas rata-rata konsensus nilai, yang merupakan harga aktual dimana saham tertentu kebetulan diperdagangkan untuk satu titik waktu tertentu. Daya beruang adalah kemampuan beruang untuk mendorong harga lebih rendah dari harga saat ini, atau konsensus nilai rata-rata saat ini. (Lihat Trading Psychology and Technical Indicators.) Dengan menggunakan indikator tren-tren jangka panjang, mungkin histogram MACD mingguan, para pedagang dapat mengidentifikasi arah tren jangka panjang. Tenaga banteng dan daya tahan kemudian digunakan untuk mencari perdagangan pada grafik harian yang bergerak ke arah yang sama seperti tren mingguan. Layar tiga kali menghasilkan label quotscreeningquot karena menghilangkan semua sinyal namun mengarah ke tren: jika tren mingguan naik, hanya sinyal pembelian yang dikembalikan dari Elder-Ray. Jika tren mingguan turun, hanya Elder-Ray yang menjual sinyal dipertimbangkan. Beli Sinyal Ada dua syarat mutlak yang harus diperhatikan agar pedagang mempertimbangkan untuk membeli: 1) tren mingguan harus naik, dan 2) daya tahan, seperti yang ditunjukkan pada Elder-Ray, seharusnya negatif namun meningkat. Kondisi kedua - daya beruang negatif - patut ditelusuri. Kondisi sebaliknya, di mana daya tahan positif, terjadi dalam tren naik yang pelarian, lingkungan pasar yang berbahaya untuk diperdagangkan meski ada kecenderungan kuat dari tren tersebut. Masalah dengan membeli dalam uptrend yang pelarian adalah bahwa Anda bertaruh pada teori bodoh yang lebih besar, yang menyatakan bahwa keuntungan Anda akan direalisasikan hanya dengan menjual kepada seseorang yang bersedia membayar harga yang lebih tinggi lagi. Bila daya tahannya negatif tapi naik, beruang menunjukkan sedikit kekuatan tapi mulai tergelincir sekali lagi. Dengan menempatkan order buy diatas tertinggi dua hari terakhir, stop order anda akan terisi hanya jika rally terus berlanjut. Setelah Anda pergi lama, Anda dapat melindungi posisi Anda dengan berhenti di bawah titik terendah minor terbaru. Divergensi Bullish antara daya tahan dan harga (konsensus nilai rata-rata) mewakili sinyal beli terkuat. Jika harga jatuh ke daya rendah namun beruang rendah menunjukkan tingkat bawah yang lebih tinggi, harga turun dan beruang menjadi lebih lemah. Bila daya tahan bergerak naik dari dasar kedua ini, Anda dapat dengan nyaman membeli sejumlah besar saham daripada biasanya pada posisi biasa. (Lihat Mendapatkan Konfirmasi Dengan Momentum Strategi dan Momentum Trading With Disiplin.) Anda juga dapat menggunakan Elder-Ray untuk menentukan waktu terbaik untuk menjual posisi Anda. Dengan melacak pola puncak dan lembah dengan kekuatan banteng, Anda bisa memastikan kekuatan sapi jantan. Dengan menumpuk puncak harga sebenarnya melawan puncak daya banteng, Anda dapat menentukan kekuatan uptrend - jika setiap puncak harga baru datang bersamaan dengan puncak baru kekuatan bull, uptrendnya aman. Ketika harga mencapai level tertinggi baru tapi daya bull mencapai puncak yang lebih rendah daripada rally sebelumnya, bulls kehilangan kekuatan dan sinyal sell dikeluarkan. (Untuk info lebih lanjut, lihat Analisis Puncak Dan Jari.) Korset Elder-Ray sebagai layar kedua dalam sistem perdagangan triple screen juga dapat digunakan untuk menentukan kondisi di mana korslet sesuai. Dua kondisi penting untuk shorting adalah 1) trend turun dan 2) bull power positif namun jatuh. (Untuk bacaan lebih lanjut, lihat Tutorial Short Selling). Jika kekuatan banteng sudah negatif, jual pendek tidak tepat karena beruang memiliki kendali atas pasar bulls. Jika Anda menjual pendek dalam kondisi ini, Anda bertaruh secara efektif bahwa beruang memiliki kekuatan yang cukup untuk mendorong sapi jantan lebih jauh ke bawah air. Selanjutnya, seperti dalam kasus yang dibahas di atas, dimana trader memegang posisi panjang selama daya beruang positif, Anda bertaruh pada teori bodoh yang lebih besar. Ketika kekuatan banteng positif tapi jatuh, sapi jantan berhasil menangkap sedikit kekuatan tapi mulai tenggelam sekali lagi. Jika Anda melakukan pemesanan singkat di bawah rendah dua hari terakhir, Anda akan menerima eksekusi pesanan jika penurunan berlanjut. Anda kemudian dapat menempatkan tempat pemberhentian pelindung di atas ketinggian minor terbaru. Perbedaan bearish antara bull power dan harga (rata-rata konsensus nilai) memberikan sinyal korslet terkuat. Jika harga mencapai level tertinggi baru tapi daya banteng menyentuh level terendah, bulls lebih lemah dari sebelumnya, dan uptrend mungkin tidak berlanjut. Ketika daya banting turun dari posisi bawah, Anda bisa menjual posisi short-than-usual dengan cepat. Anda juga bisa menentukan kapan harus meliput posisi pendek Anda berdasarkan pembacaan Elder-Ray. Bila tren jangka panjang Anda turun, daya tahan akan menunjukkan apakah beruang semakin kuat atau lemah. Jika harga rendah baru terjadi bersamaan dengan daya rendah beruang rendah, tren turun saat ini relatif aman. Perbedaan bullish mengeluarkan sinyal untuk menutupi celana pendek Anda dan bersiap untuk masuk ke posisi panjang. Divergensi bullish terjadi ketika harga mencapai daya rendah dan beruang rendah yang menyentuh dasar yang dangkal, ketika beruang kehilangan momentum dan harga turun perlahan. Untuk posisi long dan short, divergensi antara bull power, bear power dan harga menunjukkan peluang trading terbaik. Dalam konteks tren jangka panjang yang ditunjukkan oleh layar pasar pertama kami, Elder-Ray mengidentifikasi saat ketika pasar kelompok dominan terputus-putus di bawah permukaan tren. Untuk layar kedua sistem perdagangan layar tiga kali lipat, Dr. Alexander Elder merekomendasikan penggunaan osilator canggih dan modern seperti indeks kekuatan dan Elder-Ray. Namun, pedagang tidak boleh merasa terbatas pada salah satu dari dua osilator ini - osilator favorit Anda mungkin akan bekerja dengan baik, jadi Anda harus mengganti osilator yang membuat Anda merasa paling nyaman. Dua osilator lain yang dapat dengan mudah digunakan sebagai layar kedua adalah osilator stokastik dan Williams R. Stochastic Stochastic saat ini adalah salah satu osilator yang lebih populer dan termasuk dalam banyak program perangkat lunak yang tersedia baik yang digunakan oleh pedagang dan profesional individual. Secara khusus, pedagang yang menggunakan sistem komputerisasi ketat untuk menjalankan perdagangan mereka menemukan bahwa osilator stokastik memiliki banyak kualitas bagus. Misalnya, stokastik memiliki track record yang bagus dalam menyaring sinyal buruk. Lebih khusus lagi, stokastik menggunakan beberapa langkah untuk tujuan menyaring kebisingan pasar, jenis gerakan jangka pendek ultra yang tidak berhubungan dengan tren minat pedagang saat ini. Demikian pula dengan Elder-Ray, stokastik mengidentifikasi momen tepat dimana sapi jantan atau beruang menjadi lebih kuat atau lebih lemah. Jelas, para pedagang lebih baik melompat naik kereta terkuat dan berdagang dengan para pemenang sambil langsung mengadu lawan. Ketiga jenis sinyal penting bagi trader yang menggunakan stochastic adalah divergensi, level garis stochastic dan arah garis stochastic. (Untuk detail lebih lanjut, lihat Mengenal Oscillator - Bagian 3: Stochastics dan Apa perbedaan antara stochastics cepat dan lambat dalam analisis teknis) Divergensi Divergensi bullish terjadi saat harga mencapai titik terendah baru namun stokastik berada di bawah yang lebih tinggi daripada di Penurunan sebelumnya Ini berarti beruang kehilangan pegangan mereka di pasar dan inersia sederhana membuat harga lebih rendah. Sinyal beli yang sangat kuat dikeluarkan segera setelah stokastik muncul dari dasar kedua. Pedagang disarankan untuk masuk ke posisi panjang dan menempatkan pemberhentian pelindung di bawah harga terendah terbaru di pasar. Sinyal beli terkuat muncul ketika garis stokastik pertama bawah ditempatkan di bawah garis referensi yang lebih rendah dan dasar kedua di atasnya. Sebaliknya, divergensi bearish sesuai dengan keadaan di mana harga rally ke level tertinggi baru namun stochastic mencapai level terendah lebih rendah daripada kapanpun selama reli sebelumnya. Bulls kemudian menjadi melemah dan harga naik lamban. Sinyal sell penting dikeluarkan saat stokastik turun dari posisi kedua. Pedagang harus masuk posisi short dan menempatkan stop protektif diatas harga tertinggi. Sinyal terbaik untuk menjual pendek terjadi saat atasan pertama berada di atas garis referensi teratas dan yang kedua ada di bawahnya, kebalikan dari sinyal terbaik untuk bertahan lama. (Untuk mempelajari lebih lanjut, lihat Divergensi, Momentum Dan Tingkat Perubahan dan Rata-rata Bergerak Rata-Rata - Bagian 1 dan Bagian 2.) Tingkat Garis Stochastic Tingkat yang dicapai oleh garis stochastic mewakili kondisi overbought atau oversold yang berbeda. Saat rally stokastik di atas garis referensi atas, pasar dikatakan overbought dan siap untuk berbalik ke bawah. Sebaliknya, kondisi jenuh jual, dimana pasar siap untuk muncul, diwakili oleh stokastik yang berada di bawah garis referensi yang lebih rendah. Namun, para pedagang harus berhati-hati dalam menafsirkan kondisi overbought dan oversold dengan menggunakan stochastic: selama tren jangka panjang, stokastik dapat mengeluarkan sinyal yang berlawanan. In strong uptrends - as may be indicated by the traders first market screen - the moving average convergence divergence (MACD) histogram, stochastic becomes overbought and issues erroneous sell signals while the market rallies. In downtrends, stochastic quickly becomes oversold and gives buy signals earlier than warranted. Although interpreting overbought and oversold conditions with stochastics can be problematic, when using the MACD histogram as the first screen of the triple screen trading system, traders can easily eliminate these incorrect signals. Traders should take buy signals from the daily stochastic only when the weekly MACD histogram shows an upward trend. When the trend is down, only sell signals from the daily stochastic should be heeded. Using your weekly chart to identify an uptrend, wait for daily stochastic lines to cross below their lower reference line before buying. Immediately place your buy order above the high of the latest price bar. You can then protect your position with a protective stop placed below the low of the trade day or the low of the previous day, whichever is lower. To add a further level of detail to this analysis, how the shape of stochastics bottom can indicate the relative strength of the rally should be discussed. If the bottom is narrow and shallow, the bears are weak and the rally is likely to be strong. If the bottom is deep and wide, the bears are strong and the rally could very well be weak. When you identify a downtrend on your weekly chart, do not enter your trade until daily stochastic lines rally above their upper reference line. You can then immediately place an order to sell short below the low of the latest price bar. Do not, however, wait for a crossover on the stochastic lines as the market will then already likely be in a free fall. To protect your short position, place a protective stop above the high of that particular trading day or the previous day, whichever is higher. The shape of stochastics top can also indicate the relative steepness or sluggishness of the markets decline. A narrow top in the stochastic line shows the weakness of bulls and the likelihood of a severe decline. A high and wide stochastic top demonstrates the strength of bulls, and short positions should consequently be avoided. In summary, the means by which traders can filter out most bad trades involves an intimate knowledge of overbought and oversold conditions. When stochastic is overbought, do not buy. When stochastic is oversold, do not sell short. Stochastic Line Direction Quite simply, when both of the stochastic lines are moving in the same direction, the short-term trend is confirmed. When prices rise along with both stochastic lines, the uptrend is most likely to continue. When prices slide along while both stochastic lines are falling, the short-term downtrend will likely continue. When employed correctly, stochastic can be an extremely effective and useful oscillator as part of your triple screen trading system. In Part 6 of this article, well examine the fourth oscillator of interest, Williams R. In previous parts to this series on Dr. Alexander Elders triple screen trading system, various oscillators have been discussed in relation to the second screen of the system. Two excellent oscillators that work extremely well within the system are force index and Elder-Ray however, any other oscillators may also be employed. Part 5 of this series described stochastic in relation to the powerful signals formed by divergences between the power of bulls and bears in the market. In this section, we8217ll discuss one final oscillator that can be used as the second screen in the triple screen trading system: Williams R. Williams R The final oscillator that needs consideration in relation to its use as the second screen of the triple screen trading system is Williams R, which is actually interpreted in similar fashion to that of stochastic. Williams R, or WmR, measures the capacity of bulls and bears to close the days stock prices at or near the edge of the recent range. WmR confirms the strength of trends and warns of possible upcoming reversals. The actual calculation of WmR will not be dissected in detail in this space, as its current value can be obtained through top trading software packages that are widely available today. In its calculation, WmR measures the placement of the latest closing price in relation to a recent high-low range. It is important to note that WmR requires at least a four - to five-day range of prices to work effectively with the triple screen trading system. WmR expresses the distance from the highest high within its range to the lowest low in relation to a 100 scale. The distance from the latest closing price to the top of the range is expressed as a percentage of the total range. When WmR is equal to 0 on the 100 scale, the bulls reach the peak of their power and prices should close at the top of the range. In other words, a zero reading, plotted at the top of the chart, indicates maximum bull power. When WmR reads 100, the bears are at the peak of their power and they are able to close prices at the bottom of the recent range. The high of the range is a precise measure of the maximum power of bulls during the period in question. The low of the range relates to the maximum power of bears during the period. Closing prices are especially significant in calculating WmR, as the daily settlement of trading accounts depends on the days (or weeks, or months) close. WmR provides a precise assessment of the balance of power between bulls and bears at the market close, the most crucial time for a true feel for the relative bullishness or bearishness of the market. If we extrapolate this concept one level further, we see that WmR shows which group is able to close the market in its favor. If the bulls cannot quite close the market at or near the top during a market rally, the bulls are proven to be somewhat weaker than they appear. If bears cannot close the market near the lows during a bear market, they are weaker than they would appear on the surface. This situation presents a buying opportunity. If reference lines are drawn horizontally at 10 and 90 levels, this further refines the WmR interpretation. When Wm closes above its upper reference line, the bulls are strong, but the market is said to be overbought. When WmR closes below the lower reference line, the bears are strong but the market is oversold. (For additional insight, see Market Reversals And How To Spot Them and Price Patterns - Part 1.) Overbought and Oversold In an overbought condition, WmR rises above its upper reference line and prices close near the upper edge of their range. This may indicate a market top, and the WmR issues a sell signal. In an oversold condition, WmR falls below its lower reference line and prices close near the bottom of their range. This may indicate a market bottom, and the WmR issues a buy signal. During flat trading ranges, overbought and oversold signals work very well. However, when the market enters a trend, using overbought and oversold signals may be dangerous. WmR can remain near the top of its range for a week or longer during a strong rally. This overbought reading may actually represent market strength rather than the erroneous shorting signal that WmR would issue in this circumstance. Conversely, in a strong downtrend, WmR can remain in oversold territory for a long period of time, thereby demonstrating weakness rather than a buying opportunity. For these reasons, overbought and oversold readings of WmR should be used only after you have identified the major trend. This is where the first screen in the triple screen trading system is absolutely essential. You must use that first screen to ascertain whether you are currently embroiled in a longer-term bull or a bear market. (For refresher on the first screen, check out Triple Screen Trading System - Part 1.) If your longer-term chart shows a bull market, take buy signals only from your shorter-term WmR, and do not enter a short position when it gives a sell signal. If your weekly chart indicates a bear market, sell short only when WmR gives you a sell signal, but do not go long when WmR becomes oversold. Failure Swings When WmR fails to rise above its upper reference line during a rally and turns down in the middle of that rally, a failure swing occurs: bulls are especially weak, and a sell signal is issued. When WmR stops falling in the middle of the decline, failing to reach the lower reference line and turning up instead, the opposite failure swing occurs: the bears are very weak and a buy signal is issued. (For further insight, see The Dead Cat Bounce: A Bear In Bull8217s Clothing and Short-, Intermediate - and Long-Term Trends and Relative Strength Index And Its Failure-Swing Points.) Divergences The final important situation in reading WmR relates to divergences between prices and WmR. Divergences rarely occur, but they identify the absolute best trading opportunities. A bearish divergence occurs when WmR rises above its upper reference line, then falls and cannot rise above the upper line during the next rally. This shows that bulls are losing their power, that the market is likely to fall and that you should sell short and place a protective stop above the recent price high. By contrast, a bullish divergence occurs when WmR falls below its lower reference line, then moves up (rallies), and cannot decline below that particular line when prices slide the next time around. In a bullish divergence, traders should go long and place a protective stop below the recent price low. (To learn more, see The Stop-Loss Order - Make Sure You Use It and A Look At Exit Strategies.) At long last, the next part of this series on the triple screen trading system will provide a discussion of the third screen in the system. The first screen of the system identifies a market tide the second screen (the oscillator) identifies a wave that goes against the tide. The third and final screen of the triple screen system identifies the ripples in the direction of the tide. These are intraday price movements that pinpoint entry points for your buy or sell orders. The triple screen trading system can be nicely illustrated with an ocean metaphor. The first screen of the triple screen trading system takes a longer-term perspective and illustrates the market tide. The second screen, represented by an oscillator, identifies the medium-term wave that goes against the tide. The third screen refines the system to its shortest-term measure, identifying the ripples that move in the direction of the tide. These are the short-term intraday price movements that pinpoint entry points for your buy or sell orders during the trading day. (If you need a refresher, check out Triple Screen Trading System - Part 1, Part 2 and Part 3.) Fortunately, for those of us who have become weary of interpreting charts or technical indicators in the first and second screen, the third screen does not require any additional technical talent. Instead, the third screen provides us with a technique for placing stop orders, either buy stop orders or sell stop orders, depending on whether the first and second screens direct you to buy or to sell short. More specifically, the third screen is called a trailing buy stop technique in uptrends and a trailing sell stop technique in downtrends. When the weekly trend is up (identified by the first screen) and the daily trend is down (identified by the second screen, or oscillator), placing a trailing buy stop will catch upside breakouts. When the weekly trend is down and the daily trend is up, trailing sell stops catch downside breakouts. Each situation deserves further examination. Trailing Buy Stop Technique When you have identified that a longer-term (weekly) trend is moving up and your medium-term (daily) oscillator declines, the triple screen trading system activates a trailing buy stop technique. To instigate the trailing buy stop technique, place a buy order one tick above the high of the previous day. Then, if prices rally, you will be stopped into a long position automatically at the time that the rally exceeds the previous days high. If, however, prices continue to decline, your buy stop order will not be touched. This technique allows you to be stopped into your order if the shortest-term ripples have sufficient momentum to power the wave into the greater tide. The buy stop is therefore most closely related to what most traders would label as momentum investing. However, the use of all three screens within the triple screen trading system provides a much more detailed and refined picture of the market than the simple concept of momentum generally provides. (For further reading, see Momentum Trading With Discipline and Introduction To Types Of Trading: Momentum Traders.) If you want to further refine the trailing buy stop technique, you can lower your buy order the next day to the level one tick above the latest price bar. Keep lowering your buy stop each day until stopped out (filling your order at the very best time) or until your long-term (weekly) indicator reverses and cancels its buy signal (saving you from a loss). The reason that the buy stop technique is prefaced by the trailing qualification relates to this fluid nature of the buy stop order. You must, however, remain vigilant in monitoring the markets momentum, and you must be diligent in continually moving your buy stop to one tick above the latest price bar. The process can be laborious, but it will ensure that you either fill your order at the very best price or avoid a poor trade altogether if the market fails to move your way. (To read more, check out Trailing Stop Techniques and The Stop-Loss Order - Make Sure You Use It.) Trailing Sell Stop Technique The opposite situation occurs when your long-term (weekly) trend is down, at which time you would wait for a rally in your medium-term indicator (oscillator) to activate a trailing sell stop technique. In the trailing sell stop technique, you place an order to sell short one tick below the latest bars low. When the market turns down, you will automatically be stopped into your short trade. If, however, the market continues to rally, you can continue to raise your sell order on a daily basis. Opposite to the trailing buy stop technique, the trailing sell stop technique is meant to catch an intraday downside breakout from a daily uptrend. As you can see, the intraday downside breakout moves in the direction of the market tide, which in this case is a weekly downtrend. The trailing buy stop and trailing sell stop techniques are the ultimate refinements to what is already an extremely powerful trading system within the first two screens of the three screens. Using a less developed indicator, many beginning traders will engage in a system of trailing stopped orders when they attempt to gauge market momentum. By employing a longer-term chart and a medium-term oscillator first, you can capitalize on the short-term market ripples as you make the best trades that this intraday allows. The next section of this series will bring the triple screen trading system to a close. The journey through all three screens has been long, but the result is most definitely worthwhile. If you are able successfully to implement the triple screen trading system to its fullest, you are on your way to being ahead many other trader with whom you are competing for profits At long last, we have reached the end of this series describing all facets of the triple screen trading system. You will recall that the third screen in the system, the trailing buy or sell stop system, allows for the ultimate level of precision in your buy orders or, if you are selling short, your sell orders. By identifying the ripples moving in the direction of the market tide, you will best be able to capitalize on the short-term (usually intraday) price movements that pinpoint the exact points at which you should enter your position. (To brush up on previous sections, see Triple Screen Trading System - Part 1, Part 2, Part 3, Part 4, Part 5, Part 6 and Part 7.) Stop loss Technique But we have yet to discuss how the triple screen trading system assists a trader, once in a position, to secure a profit and avoid significant losses. As is the case in all levels of trading, and investing at large, the decision to exit your position, whether long or short, is just as important as your decision to enter a position. The triple screen trading system ensures that you make use of the tightest stops, both in entering and in exiting your position. Immediately after executing your purchase order for a long position, you place a stop loss order one tick below the low of the trade day or the previous day, whichever is lower. The same principle applies to a short sale. As soon as you have sold short, place a protective stop loss one tick above the high of the trade day or the previous day, whichever is highest. In order to protect against the potential for losses, move your stop to a breakeven level as soon as the market moves in your favor. Assuming that the market continues to move you into a position of profits, you must then place another protective stop at your desired level of profits. Under this system, a 50 profit level is a valid rule of thumb for your targeted profitability. The Importance of Stop Loss The stop loss orders used in exiting a position are very tight under this system because of the fundamental tide of the market. If you enter into a position using the analysis tools contained in the triple screen trading system only to see the market immediately move against you, the market has likely undergone a fundamental shift in tide. Even when identifying the markets probable long-term trend in the first screen, you can still be unlucky enough to enter your trade, for which you use the third screen, at the very moment at which the long-term trend is changing. Although the triple screen system can never identify this condition organically, the trader can prevent losses by keeping his or her stop loss extremely tight. (For further reading, see The Stop-Loss Order - Make Sure You Use It, A Look At Exit Strategies and Can a stop-loss order be used to protect a short sale transaction) Even if your position enters into the red, it is always better to exit early and take your loss sooner rather than later. Realize your small loss, then sit back, and observe what is happening in the market. You will likely be able to learn something from the experience: if the market truly has shifted its long-term direction, you might better be able to identify the situation should it happen again in the future. Conservative and Aggressive Exit Strategies The above discussion has outlined a relatively conservative strategy for risk-averse traders. By maintaining the tightest stop loss orders possible, conservative traders can easily go long or short on the first strong signal from the triple screen trading system and stay with that position for as long as the major trend lasts. Once the trend reverses, the profits will already be locked in. If the market reverses prematurely, the trader will be stopped out of major losses. A possibility for more aggressive, active traders is to continue watching the market after entering into a long or short position. While the longest-term trend is still valid, active traders can use each new signal from the second screen (the daily oscillator) to supplement the original position. This approach allows for a greater level of gross profit while still allowing the stop loss approach to protect the entire position. Adding to the original position while the trend continues is often referred to as pyramiding the original position. Another type of trading is practiced by the position trader, who should try to go long or short on the very first signal issued by the triple screen system. Then he or she should stay with that position until the trend reverses. Finally, a short-term trader may take profits using signals from the second screen. You may recall that the second screen identifies the medium-term wave that goes against the larger tide. Using the very same second screen indicator that is used prior to entering the trade, the short-term trader can use intraday occurrences of market reversals to exit the trade. If, for example, the short-term trader uses stochastic as his or her second screen oscillator, he or she may sell the entire position and take the profits when stochastic rises to 70. The trader can then revisit the first screen of the system, reconfirm the market tide and continue to drill down to the second and third screens in order to identify another buying (or selling) opportunity. Conclusion The length of this eight-part series demonstrates that Dr. Alexander Elders triple screen trading system is not the simplest means of identifying buying and selling opportunities on the markets. The system is, however, one of the most powerful means of combining a series of useful individual indicators into one comprehensive whole. The time that you spend reading these articles and familiarizing yourself with the individual components of the system will undoubtedly pay dividends to your trading success. MACD3SS. ex4 3 KB 1,658 download Uploaded Jul 9, 2013 3:05am by Jack Crooks Saturday, September 1, 2012 at 7:30am I realize its never easy and rarely simple. But today Im going to help you understand why global money-flow drives key markets and how that flow could be reversing. If I am right, it is good news for long-term dollar bulls like me, bad news for China bulls, and terrible news if you are still riding on the Peak Oil bandwagon expecting oil to hit 200 barrel soon. Three major realities lead me to those conclusions: Reality 18212 Foreign exchange reserves and growth is falling in China Some experts estimate that up to 50 billion a month is exiting China. Keep in mind, when money leaves China, it leaves as dollars for the most part. Investors exchange yuan for dollars inside China, or Hong Kong, then move those dollars to safe haven areas, such as U. S. Treasuries, U. S. farmland, or Vancouver apartment buildings. Reality 28212 Demand for oil is falling along with global growth, and the U. S. is leading the way Chinas crude oil imports fell 3 percent in July from a month ago to a nine-month low. The slowdown in growth is hitting oil demand hard in the country that has driven the increase in global fuel consumption for a decade. In fact, the International Energy Agency slashed its forecast for Chinese oil demand growth in 2012 by a third to 240,000 barrels per day (bpd) in its August monthly report. Just a month earlier, the agency had forecast growth of 360,000 bpd. If demand is already low and appears to be heading lower, I think it is time to mark down oil prices. And in the U. S. according to Reuters, oil demand in July fell to its lowest level in nearly four years. The chart below shows oil hit a brick wall of resistance at around 98 per barrel that happens to be a key retracement level. Plus, the price oscillators are turning down from an quotoverboughtquot level. This price action seems to be confirming bearish fundamental news. Reality 38212 The dollar is the worlds monetary standard The demand for dollars is poised to rise as the supply falls. I say that because: Dollar-based funding (supply) for trade finance and other credit lines is falling as European banks reduce the percentage of debt on their balance sheets. As I explained above, dollars are leaving China. And I expect Chinas foreign exchange reserve hoard to continue to decline. Falling oil prices are dollar bullish, as countries that buy oil on world markets 8212 priced in dollars 8212 can reduce their dollar credit lines, which reduces the potential of a new supply of dollars from coming on the market. If a global credit crunch similar to the credit crunch of 2007 materializes, demand for dollars and dollar-safe havens will soar. Now, take a look at the chart below, which shows how all of these global money-flow factors discussed above relate to each other. Chinese foreign exchange reserve growth (red line) oil prices (black line) and the U. S. dollar index (blue line) There is a lagging correlation between Chinese FX reserve growth and oil prices, with Chinese FX growth leading. There is a tight negative correlation between oil prices and the dollar i. e. as oil prices rise the dollar tends to fall and vice versa. If these macro trends continue to play out as I expect, your decision is easy: Sell oil, buy the dollar, and hold those positions until the trend changes. Have a safe and happy Labor Day weekend, Japan: An Accident Waiting to Happen The worlds largest debt bomb isnt Greece or Spain. Its Japan, where government debt now approaches 220 of gross domestic product. That level of spending makes profligate congressmen in America look downright parsimonious with taxpayer cash. Servicing Japans debt now consumes some 43 of government revenue, up from about 4 in the early 1970s. Its a situation thats clearly not sustainable. In theory, that much debt and all the money the Bank of Japan keeps printing to keep the country afloat should have destroyed the yen by now. Yet, it hasnt. And the reason it hasnt comes down to the countrys savings pattern. Japan is able to run huge deficits and sustain such high debt-to-GDP because it has used its vast savings over the last 50 years to fund government spending. I recently talked to my colleague, Evaldo Albuquerque, to get his thoughts. Evaldo is one of the smartest analysts I know. He made a name for himself in foreign currencies, but were teaming up to find unique, safe income plays. Heres his take: The yen hasnt collapsed yet because Japanese financial institutions hold 93 of government debt. In other words, domestic investors have financed the governments spending for the past two decades. The problem is Japan has the worlds fastest-growing population of seniors aged 65 years and older. Once all these seniors retire, they will no longer be saving. Instead, they will be cashing out their retirement accounts. The Japanese government will have to find other investors to buy their bonds. Who will buy Japanese bonds paying less than 1 International investors will certainly require a higher rate, increasing interest expenses. The government simply cant afford that. In other words, the countrys savings rate will soon go negative. And thats going to be the tipping point for the currency. For years now, Japan has been printing money and buying government debt to keep interest rates from skyrocketing. But once the savings rate turns negative, Japans government will no longer have domestic cash to rely on. So, theyll do what every government does when faced with making impossibly hard decisions theyll turn on the printing presses and crank out boatloads of yen. And the yen will finally crack. If its a managed devaluation of the yen, as I expect, Japans export-dependent companies will be big, big beneficiaries. Thats because the sales that Japanese companies accumulate in dollars, euros, pounds and yuan will translate into more and more yen as the Japanese currency weakens. Thats essentially free profits because, aside from some tax obligations, currency gains have no associated costs on a corporate income statement. What about China The answer is important because China affects so much of the world economy, especially as it relates to commodity prices and your commodity stocks A friend of mine forwarded me a story where a certain strategist said it was time to quotstart adding Chinese exposure. quot He said, quotWhere else can you buy an economy with 7-8 growth prospects at less than 10 times estimated earningsquot To believe his statement, you have to take two things at face value: 1. Chinas GDP numbers are, at least, roughly accurate. 2. Chinas earnings are, at least, roughly equivalent to earnings of other markets. I dont buy either statement. The 7-8 growth rate assumption comes from Chinas own GDP statistics. GDP, which stands for quotgross domestic product, quot is a widely accepted rough guess of economic growth. For an investor, it is almost useless, and I usually ignore it. Thats because as an investor, youre not buying quotthe economy. quot Youre buying individual securities. The characteristics of those securities should be your focus. Stick to the basics and whats in front of you. Dont get lost in abstractions like quotGDP. quot But lets play ball for a bit. If you want to rely on Chinese GDP figures to frame some kind of investment thesis, then you should know there is a lot of room to doubt their veracity. So officially, Chinas government says its economy is growing 8. Lots of people dont believe it. Charles Dumas, of Lombard Street Research, is one. He says: quotWe dont believe official data. We think GDP slowed to a 1 rate in the first quarter. quot I dont believe official data either, and I certainly dont make investment decisions based on it. Two other quick points about relying on GDP: GDP figures are backward-looking. They tell you nothing about the future. Even if you think they do, then you have to say the trend is not good. Chinas first-quarter GDP was at a three-year low. GDP as a concept is absurd. Government spending is counted as a positive. So a government that spends money digging holes and refilling them is adding to its countrys GDP. Who knows at what rate Chinas economy is really growing Frankly, I think it is an unknowable. Chinas economy is a huge, complex thing. It has many parts going in all kinds of directions. To boil all that down to a single number always strikes me as silly. The second point up top is on Chinas corporate earnings. There is a good case that such earnings deserve heavy discounting. Maybe 10 times earnings is the right number in todays environment. As Ivy Pan, an analyst with ABN AMRO, said recently, quotForecasts of company earnings have been continuously revised downward since the beginning of the year. quot Besides, there is the issue of earnings quality and trustworthiness. This is a matter of debate, too. So there is a lot of guesswork. There are also things we do know. The strategist up top cites healthy increases in imports of coal, iron ore, and copper as a plank to his bullish thesis on China. He says the increase is consistent with an economy growing 7-8. Again, we have to question how the figures come about. I think it is safe to say that Chinese government-mandated investment drives these figures. And I tend to think of that as more of a bad thing, not a good thing. Will it prop up commodity markets to some extent Of course. Its not a game I care to play, though. Anyway, it seems an odd thing to cite these commodities. Despite decent Chinese import figures, iron ore prices recently hit 2.5-year lows. Iron ore prices are down 17 since mid-June. Coking coal is down 23 since the start of July. Copper prices are down more than 20 from a year ago. Chinese steel mills are hurting. The China Iron and Steel Association said recently that the Chinese steel industrys profits fell 96 in the first half of the year compared with last year. Thats not a typo: down 96. These anecdotes dont square with the image of a booming economy. I dont know what will happen, but I find the whole thing fascinating. Ive been bearish on China in the last year, but I think some of the air has already come out of Chinas boom. (Take a look at housing prices, for instance. Chinese housing prices registered nine months of decline, and they just had an uptick.) And there are definitely China themes Id own andor will continue to own those that play on Chinas need for water and food, for instance. These are very good long-term investment themes, regardless of what happens in China in the near term. But what about commodities Now we turn to the other piece of the puzzle. Most people wouldnt care a whit about Chinas economy. They care because China is such a big user of commodities and has such an impact on world prices. A growing China is a key to the commodity bull market. But the commodity bull market is long in the tooth. It started in roughly 2000. (Jim Rogers and others date it from 1998.) So the bull market is at least 12 years old. The average lasts about 17 years, according to Jim Rogers book Hot Commodities. However, this one may already be beyond whats normal. A reader sent me this chart on commodity prices from BCA Research and Allan Gray: What this chart shows is that the long boom in commodity prices over the last dozen years has pushed commodity prices more than two standard deviations above their long-term trend line. In other words, were in outlier territory. As you can see, not too many past bull markets have pushed much beyond where we are now. There is another important point about that chart. Commodities, despite what you hear, are a poor way to preserve wealth over a long period of time. As Ian Liddle of Allan Gray notes: Importantly, the long-term trend line is down. This is a testament to human ingenuity. Over the last two centuries, we have constantly found new and more-efficient ways to produce and use commodities, and this has driven prices down over time. The new technologies to access Americas considerable shale gas reserves are the latest example of this. We believe it would be a mistake to simply extrapolate the strong rise in commodity prices over the last decade far into the future. I dont think this dynamic is somehow suspended in our own times. Commodities will continue to fall in real terms that is, adjusted for inflation over a long period of time. I think weve turned, or are turning, another corner. We should expect lower highs and lower lows on most commodities (in real terms) as the commodity bull market unwinds. It will affect everything from iron ore to oil. (I exclude the precious metals, on which I remain bullish.) If the bull market is, indeed, over, we have to change the way we look at investing in commodities. Commodity stocks have to clear different hurdles than in the last dozen years. We should not count on increases in commodity prices. Stocks should work at existing prices and lower. I would favor picks-and-shovels plays over producers. This is the way I plan to play it. Its the safe way to go. If Im wrong, Ill be wrong for a year or two as the commodity bull takes its last breaths. But then, so what There are plenty of other ideas to invest in. The truth is that the end of the commodity bull market is coming. It seems too risky to try to and call the exact top. Start playing it safe now. Start preparing today. Never before have I seen such a divergence between the quotfantasy landquot world central bankers and their faithful live in. and the real world the rest of us inhabit. In fantasy land, this was the big week investors were waiting for The European Central Bank (ECB) met yesterday and decided to buy more sovereign bonds in an attempt to bring down interest rates in troubled European countries. The program is essentially the same thing the ECB already tried earlier, to only limited results. But never mind rumors of the plan were enough for traders to throw a party in August and this week Meanwhile, in the real world, things just kept going from bad to worse, with the economic data deteriorating from one end of the globe to the other Bottom line: The divergences between whats going on in the real world and the puffed-up stock indices, which have been floating on an ocean of cheap money, are the biggest I have ever seen. The last time these divergences were this severe, was right before the stock market crashed in 2007-2008. and early 2000 before that. And THAT has major implications for your wealth What the Fed, ECB Are Doing and What It Means In his closely watched Jackson Hole, Wyoming speech last Friday, Federal Reserve Chairman Ben Bernanke tried to justify his nontraditional approach to monetary policy. He defended QE and pledged to keep interest rates low for longer periods of time, saying (in plain English) that they quotworked. quot I see an economy whose unemployment rate has remained above 8 percent for the longest stretch since the government began keeping track in the 1940s. I see an economy whose GDP is barely growing. I see an economy where confidence remains lackluster and manufacturing is shrinking again. And I see an economy where the only real beneficiaries of easy money are the commodity and stock market speculators who can make money off of it Never mind whether QE is a success or utter failure though. What is important for investors is that Bernanke did not go into detail about other FUTURE nontraditional policy options, such as nominal GDP targeting or unlimited, open ended QE. The fact he didnt mention those kinds of steps lead me to believe theyre less likely to be used. Bernanke also warned that quotthe hurdle for using nontraditional policies should be higher than for traditional policies. quot But most importantly . Bernanke himself admitted in the speech (subtly) that newer rounds of QE and Operation Twist were less effective than the first round. Thats as close to the emperor admitting hes wearing no clothes as you can get without coming out and saying so It fits precisely with what I have been saying for ages too Bottom line: The U. S. Fed will likely NOT engage in a massive new QE program. and even if it does, it could be sold aggressively by investors now that even Bernanke himself is admitting its almost completely ineffective. As for the ECB, President Mario Draghi unveiled plans to buy sovereign bonds with maturities of three years or less. So many leaks came out before the Thursday meeting that the actual news was almost anticlimactic. and now the question is whether or not investors will quotsell the news. quot Why should they Well, the bond purchases will be conditional meaning the ECB wont buy unless the targeted countries (think Spain here) agree to oversight and more supervision by fiscal authorities. The program wont seek to establish firm yield quotcaps, quot another disappointment. Most importantly, the purchases will be sterilized. That means this is not an all-in quotQEquot type strategy that balloons the size of the ECB balance sheet and results in runaway money printing. That is likely reflecting concern among the ECBs members in Germany and other more conservative countries. Global Economy Sinking Deeper into Recession So what about the quotreal worldquot There the news is going from bad to worse. Here in the U. S. the Institute for Supply Managements benchmark manufacturing index sank further to 49.6 in August. That was the third month in a row below 50, which is the dividing line between expansion and contraction in this key sector. Europes benchmark manufacturing index also slumped to 46.3 in August. That indicates the euro-zone economy is sliding deeper into recession, and that the recent rise in unemployment to a fresh euro-era record high is only the beginning As for the BRIC countries, Chinas services sector index just sank to its lowest in a year. Brazil is slowing so much, the central bank was just forced to cut its benchmark interest rate to a record low of 7.5 percent. And in India, GDP growth slowed to 5.5 percent in the June quarter. That was close to a three-year low, and well-below long-term growth targets in the 8 percent to 9 percent range. Now I want to update you on those incredible divergences I mentioned earlier. Virtually every indicator of the REAL economy is slumping or stagnating even as the broad stock market averages try to hold these elevated levels. In the top panel of the chart below, the black line is consumer confidence, the red line is the SampP 500, and the panel on the bottom shows the spread between the two. The last time there was a divergence as huge as it is now was in 2007-2008 right before the stock market crashed. The top panel in the next chart below shows the same comparison only using the ISM manufacturing index and the SampP 500. Youll see that the ISM index did NOT make a higher high along with stocks this year a key divergence. And in the bottom panel youll also see the last time they diverged this much was right before the 2007-2008 stock market crash. The time before that Right before the 2000 stock market crash Bottom line You have the real economy deteriorating sharply. You have key global players in sectors like technology and transportation warning that revenue and earnings growth is slowing rapidly. FedEx (FDX) was just the latest casualty this week, cutting its profit target for the second time since June. And yet, you have investors clinging to the hope that a few policymakers huddling in conference rooms on two sides of the Atlantic can somehow quotsave the world. quot Thats despite the fact the quotsavesquot they are talking about have already failed repeatedly. I think thats a real recipe for trouble. And thats why outside of a few select situations, stocks look very vulnerable to me. Until next time, Commercial Member Joined May 2012 3,332 Posts The ECB pledged to act forcefully to defend the EU and euro by potentially buying bonds to reduce crisis-hit euro-zone countries borrowing costs, which is a good thing. The market didnt price in the lofty summer rhetoric. But on balance, the announcement gives reason to be more bullish on the markets. still not a reason to run out and buy stocks with both hands. One of the most anticipated ECB meetings in history occurred last week, and with it the European crisis entered a new phase. Generally speaking ECB Chief Mario Draghi and the ECB met most of the markets lofty expectations, as evidenced by market action. Perhaps even more important, the ECB didnt disappoint by quotkicking the canquot down the road as European officials have done so many times over the past three years. I say that because. There are multiple risks to monitor over the next several weeks in Europe. Here are three of them:Last Weeks Signal Was NOT an quotAll Clearquot Risk 1 Markets will test the ECB First, you can expect markets to test the ECBs will at some point over the next few weeks by pushing Spanish or Italian yields higher just to see if the ECB was bluffing on its bond-buying promise. If I had to guess where, Id bet well see the first intervention in Spain before the end of October, as there remain multiple troubles brewing there. Risk 2 Spain and Italy have to ask for help before getting it One of the disappointments of the ECB meeting last week was that more strict conditions were placed on countries who need the ECB to buy their bonds than had been expected. Economists on the Street are referring to this as quotconditionality. quot In order for the ECB to buy bonds, Spain and Italy will have to formally request aid and submit to fiscal oversight by the ESMEFSF and the IMF. That implies some loss of sovereignty (psychologically, anyway), which will make Spanish and Italian politicians less likely to request aid until its absolutely necessary. As an outlier, theres a chance that both countries wont request aid. And then it becomes a game of chicken between those countries and the rest of Europe to see who blinks first. Dont think it cant happen either Greece has basically done it twice, and Europe blinked both times. What happens if Spain or Italy get the bailouts needed, but after a while stop adhering to the fiscal reforms mandated by the EFSF or ESM Risk 3 Will bailed-out nations comply The bottom line: If none of those risks mentioned above come to fruition, the ECB announcement last week was a game-changing event in Europe and a reason to think the crisis is nearing an end. But, if any of those risks actually materialize, the consequences are potentially catastrophic. And even if they dont fully materialize, if they appear to be gaining momentum, markets will fall and fall hard. The ECBs answer was very clear and another area of disappointment: If countries getting aid stop implementing necessary fiscal reforms, bond buying stops immediately meaning all this could be an enormous waste of time. One thing we do know from last weeks announcement is that the euro will be sacrificed to keep the EU together. By the ECB choosing to print euros to buy euro-country bonds, it means well see a lower euro over the long term, even though in the short term we could see the euro continue to rally as investors bet the crisis is solved. A big rally in the Euro over the next several weeks could provide a great opportunity to position yourself for the next big move in the currency, which is bound to be lower. Commercial Member Joined May 2012 3,332 Posts Now that the European Central Bank has saved the euro and our Federal Reserve has declared easy money as far as the eye can see, isnt the dollar going to get killed Well, on the surface that makes sense. But I think those concerns are short-term impacts. I still believe the dollar has entered a multi-year bull market, which began back in March 2008, when the U. S. dollar index bottomed. Now that the European Central Bank has quotsavedquot the euro and our Federal Reserve has declared easy money as far as the eye can see, isnt the dollar going to get killed And here are nine themes I see playing out that would ensure a bull market for the dollar: Theme 1Euro no longer a viable challenger against the dollar The euro is not saved yet, by any means. I expect another crisis to rear its ugly head within the next six months or sooner. But even assuming the euro is quotsaved, quot I would expect at least a decade of deflation and slow growth. As a result, the euro will fall of its own weight relative to the dollar and other major world currencies. Theme 2 Most of the monetary policy impact is behind us Each of the Feds new programs has been increasingly less effective in helping the real economy. Sooner or later the market will clear itself. And when it does the Fed will quickly take back all those excess reserves, which means U. S. dollar supply will fall. Therefore, fewer dollars will be out there as demand grows with recovery. Theme 3 Chinas reserves are falling, and hot money is fleeing I expect this trend to continue as Chinas economic growth slips further. This again goes to the point of a declining global supply of dollars, which will be good for the dollars price. Theme 4 U. S. real assets look cheap In a world increasingly looking for good long-term investment ideas, U. S. real assets, including real estate and natural resources, look very competitive. This should lead to strong foreign direct investment into the United States. Indeed, good for the dollar. Theme 5 The ramp up in U. S. domestic energy production helps the buck There are two ways this is bullish for the dollar: 1) Falling oil imports should help cut our trade deficit and 2) It leads to more international investment into the U. S. by investors wanting to position accordingly. Theme 6 Global rebalancing taking place in China and Germany As the global backdrop for export dependent countries changes, the top exporters China and Germany will have to increase domestic demand in order to grow. This will likely help U. S. exports and be the real beginning of the long awaited global rebalancing. It will be dollar positive for sure Theme 7 Rising pool of U. S. domestic savings The credit crisis has triggered a palpable shift in U. S. consumer savingsconsumption patterns. I expect this to be secular in nature. As the U. S. pool of savings for domestic corporations increases, the dependence on international funding should fall. If the U. S. current account deficit improves dramatically, the dollar will benefit. Theme 8 Falling commodity prices As China decelerates, commodity prices should fall dramatically. This doesnt mean all commodities nor does it mean the secular rally is over. But over the next 1-2 years, this will put pressure on emerging markets and will likely mean U. S. investors keep more of their money onshore for local (U. S.) investment opportunities. That means more dollars staying home instead of being exchanged into other currencies. Once this mountain of cash is redeployed to fund technologies where U. S. companies have a commanding lead, such as in nanotechnology and 3-D printing, it could virtually trigger a U. S. renaissance and would be a magnet for foreign direct investments. That would be very dollar bullish. Theme 9 2 TRILLION in U. S. corporate cash on the sidelines Needless to say the ideas Ive listed above have implications for asset markets that go way beyond the U. S. dollar. Over the next several weeks I will pick up on each of these themes in greater detail to show you why I believe its way too soon to write off the dollar or make a long-term bet on the decline in America. Commercial Member Joined May 2012 3,332 Posts Why the yen could be todays best currency trade by Jack Crooks Saturday, June 9, 2012 at 7:30am The Japanese yen continues to defy its own economic fundamentals. It continues to move up and down in value, in correlation with quotrisk offquot (stocks and growth assets moving lower) or quotrisk onquot (stocks and growth assets moving higher). But the latest statistics and dynamics driving the Japanese economy into the future still tell me the yen will weaken in a very big way, sooner or later. If you are a long-term player who has some patience, I consider this the best single trade setup among the major foreign exchange pairs: A core long-term long position in USD (U. S. dollar)JPY (Japanese yen). In other words, bet that the yen will fall in relation to the dollar. Of late, the yen (relative value) is moving in tight, negative correlation with risk assets. Using the Dow Jones Industrial Average (DJIA) as a measure of risk assets, you can see that as the Dow falls, the value of the yen rises. On the chart below, the USDJPY falls as the yen gets stronger relative to the U. S. dollar. Whether you consider the yen correlation against the DJIA or the Nikkei 225 Index, it is effectively the same concern in global stock markets means the yen strengthens. The primary reason is simple repatriation. Japan is still a very wealthy country despite the economic calamity experienced since the bubble broke back in 1989. Its insurance and pension funds have vast amounts of investment capital. When things get ugly globally, measured by stock markets, these big pools of funds tend to rush back home to hide in local Japanese government bonds for safety. For example, consider the relationship between the DJIA and USDJPY going back to the credit crunch period beginning in mid-2007: DJIA down 15.2 percent from its peak USDJPY down 35.9 percent from its peak Dollaryen has fallen 35.9 percent, or put another way the yen has strengthened 35.9 percent against the U. S. dollar since the credit crunch (creating huge price pressure on Japanese exporters) while stocks rose. And when you consider that one of the major impacts of the credit crunch was the decline in global demand for goods from export-oriented countries, such as Japan and China, you can see why Japanese companies are screaming for relief from this double whammy of pain. Japans Soaring Government Debt Crisis The dangers of a declining trade surplus and strong yen pressures are put quite clearly into context when you understand that Japan will likely run a fiscal deficit of a whopping 10 percent of GDP. Meanwhile its debtGDP ratio could rise to the moon-launch level of 241 percent (roughly twice the level of Italy) this year, according to forecasts by the International Monetary Fund. Notice in the chart below how government debt has continued to ramp up after the bubble broke in 1989. And this fits the view gaining ground that after Mr. Market is done crushing the European bond market, it turns its guns on Japan. Now, what makes that picture even worse is the train-wreck scenario of Japan no longer being able to fund these huge debt needs internally as the pools of private and business savings are drying up. In other words, if Japanese interest rates rise from their incredibly low levels 0.89 percent on the 10-year Japanese Government Bond (see chart below) the cost of funding with 200 percent debtGDP could shoot up exponentially. If Japans bonds begin to reflect real or even potential funding risk, forcing interest rates higher, it means that local demand from Japanese institutions will fall even more, putting greater pressure on rates, while the slowdown in economic activity will further reduce Japans available pool of savings to fund this growing need. Japan is facing a very scary situation here. Sooner or later, the yen will begin to reflect these internal realities. I think it will be sooner. When it does, the value of the yen has a very long way to fall (USDJPY has a very long way to rise). The long-term profit potential I see here is enormous. Best wishes, Jack Thursday, October 25, 2012 at 7:30am China has been one of the worlds worst performing stock markets in 2012, down 14 percent from its March high. Persistent worries about the health of Chinas economy have dragged stocks lower. But over the past month, stocks in Shanghai have perked up a bit. And recent upbeat economic data has many investors asking if growth in China may finally be rebounding after a seven-quarter slowdown. The answer to this question could determine if emerging markets in general 8212 and especially in Asia 8212 may enjoy a reversal of fortune leading global stocks higher once again. One thing is for sure: Investor sentiment toward China has been pervasive in recent months. Confidence Is Returning As quarterly GDP growth fell steadily for the past seven straight quarters, confidence turned sour. And investors pulled capital out of China and U. S.-listed ETFs and mutual funds that invest in China. The financial media went from debating whether China would experience a hard - or soft-landing. to predictions of an imminent crash-landing. Chinas official economic data has always been considered suspect. As if U. S. data, often subjected to sizeable revisions after-the-fact, are any better. That said recent data out of China for September turned decidedly more upbeat: 8226 September retail sales expanded at a 13.2 percent clip 8212 the strongest pace this year 8212 indicating Chinese consumers are spending. 8226 Disposable income for Chinas city dwellers is growing nearly 10 percent. And rural disposable income jumped more than 12 percent so far this year. 8226 Fixed asset investment, a key indicator of overall capital investment, surged 20.2 percent year-over-year in September 8212 to the highest level since October 2011 Also, September industrial production grew at a 9.2 percent pace, while exports were up 9.9 percent, well ahead of estimates. Meanwhile, strong growth in capital investment is being led by a pickup in domestic infrastructure projects like highway, seaport, rail, and airport investments. These are key elements of Beijings economic stimulus announced earlier this year as leaders attempt to shift the focus of Chinas economy away from an export-led growth model to focus more on domestic consumption. But it isnt just the government providing growth. Capital spending by Chinese private sector firms has risen faster than state-owned enterprises for 30 of the past 31 months And consumption growth is likely to pick-up even more in the months ahead, not only because disposable incomes are rising at a fast pace, but also because inflation remains subdued. Follow the Money Chinas consumer price index moderated to 1.9 percent in September down from 2.2 percent in August. This gives the Peoples Bank of China more room to maneuver in further reducing interest rates and lowering bank reserve requirements to stimulate more lending growth. In fact, Chinas money supply growth has risen sharply this year, expanding at a 14.8 percent clip year-over-year in September, up from 12.4 percent at the end of January 2012. Thats a very bullish sign given the high correlation between money supply growth and Chinese stock prices. And following several months of outflows there are signs that money is flowing back into China again. What really caught my eye was a report that the Hong Kong Monetary Authority was forced to intervene in foreign-exchange markets this week for a second time to prevent the HK dollar from appreciating against the U. S. dollar. After another round of money-printing by the Fed, European Central Bank, and Bank of Japan, investment funds appear to be flowing into Hong Kong at a rapid pace, given its status as the main investment gateway into China. That puts upward pressure on the HK dollar which is pegged in a narrow range to the buck. This is important because its the first intervention since 2009. the first time since the financial crisis that capital flows into China have rebounded to such a significant level. Im a true believer in following the money in global markets. Tracking block money flows into and out of markets, ETFs, and individual stocks can provide important clues about where the big money is moving to take advantage of investment opportunities. Emerging market equity funds have posted six straight weeks of capital inflows through the week ended October 17, bringing inflows to more than 21 billion year to date. And China equity fund inflows recently hit a seven-week high. I track similar money flows into ETFs using Bloomberg market data. And sure enough I noticed significant flows into China-related funds over the past several months including: 8226 iShares FTSE China 25 Index ETF (FXI), with 136.2 million inflows. 8226 iShares MSCI Hong Kong Index ETF (EWH), with inflows of 82.3 million, and. 8226 Morgan Stanley China A Share Fund (CAF) with a 3.7 million inflow This sudden reversal of money flows isnt limited to China either, or just to these funds. Several others that track China and other emerging markets are seeing strong capital inflows too, which makes perfect sense when you think about it. China is the worlds largest consumer of many commodities these days. everything from aluminum to zinc. So a pickup in Chinas growth should mean better prospects ahead for markets like Australia, Canada, Brazil, and Chile. Meanwhile, about 80 percent of Chinas imports come from Japan, South Korea, and Taiwan, so stronger Chinese domestic growth and export growth should benefit these markets as well. Bottom line: It may be premature to call a bottom in the Chinese stock market. But a sustained turnaround in Chinas economy should lead to stronger performance in many other global markets too. Good investing, Mike Burnick Commercial Member Joined May 2012 3,332 Posts You may recall my Money and Markets column, Why the yen could be todays best currency trade. Today I want to give you an update on why I believe we are very close to a long-term peak in the value of the Japanese yen. Or to put it another way a major long-term multi-year bottom in the U. S. dollar. Lets first go back to the 1980s when Japan was poised for what many believed was inevitable economic domination. The country was in the midst of a huge credit bubble valuations were off the charts. For example, in 1989 the Tokyo Imperial Palace was said to be worth more than all the real estate in California The countrys trade balance was soaring against the world, especially the United States. Japanese companies were gobbling up real assets throughout the globe. Here in the U. S. the premiere properties acquired were Pebble Beach Golf Course and Rockefeller Center. Americans were concerned, very concerned about this foreign invasion. And Japan bashing was in vogue. During the early 1980s the U. S. dollar was in a major bull market. Despite the real value of the dollar and other fiat currency values inflating away, the dollar staged a rally of almost 50 percent from its low in 1980. Paul Volckers tough love administered by a massive hike in interest rates, was the catalyst of this multi-year rally. With Japan the big dog on the block and its trade surplus soaring, U. S. manufacturers and other trade groups began applying pressure for a dollar devaluation the dollar was too high. So the major global powers jumped into action to rectify this terrible wrong. The United States, the United Kingdom, France, West Germany, and Japan got together at the Plaza Hotel in New York and agreed that the dollar was too high. The Plaza Accord or Plaza Agreement was signed on September 22, 1985. In short, the countries agreed to allow their respective central banks to intervene in the foreign currency market through a coordinated effort to push the U. S. dollar down. Though at the time billed as a dollar problem, the implicit rationale for the Plaza Accord seemed a defense against Japans rising trade surplus. Thus it was more of a push up the value of the yen agreement. Many, rightfully, believed Japans aggressive export-dominated trade policy took advantage of relatively open markets in the West by producing increasingly high-value goods and morphing up the consumer value chain. But at the same time it continuously found a way to stop or delay Western goods from making it to Japanese consumers. As I said, the Plaza Accord worked in pushing up the value of the yen. But it did little to solve the trade balance problem. Japans trade surplus remained strong even as the yen soared. In the chart below I have compared Japans trade surplus on a monthly basis with the yens value from 1983 through June 2012. I noted the Plaza Accord and the official Credit Crunch start by the red vertical lines. Think of them as bookends on the massive rally in the yen. Here is where it starts to get interesting if, like me, you believe the USDJPY is close to a major long-term bottom The way I see it, the real trigger that changed the dynamics for Japans seemingly unending trade surplus was the Credit Crunch. Thats because the Credit Crunch brought an end to Japans long string of trade surpluses I also believe it triggered the beginning of the end of the Asian export model as we know it. I see three major reasons, which are interrelated and self-reinforcing: First . it marked the end of an era of unlimited global liquidity Second . it triggered a secular change in global consumption And third . more specifically Approximately 90 percent of Japanese debt is held by Japanese investors. Over the years, huge pools of savings and massive current account surpluses have provided plenty of money to fund the Japanese governments growing need for funds as tax revenues were increasingly scarce given Japans low growth deflationary economy. But now, Japan faces a daunting prospect thanks to the Credit Crunch. No longer is it generating the current account surplus it needs. Consumer demographics and low growth have pushed the consumer savings pool sharply lower heading toward zero. And companies domestically have been using their savings pools to recover from the Tsunami and plug the holes from falling demand for their exports. Therefore, the Japanese government is at risk of a funding shortage at least internally. And this is very dangerous. Heres why Japan has a government debt-to-GDP ratio of around 215 percent. The interest cost to fund this debt is huge. Plus the yearly funding needed to maintain government services is massive. Add them up and you get a mismatch between government revenues and spending. Its called a budget deficit, and here in the U. S. we know firsthand how that works. Next, take a look at the chart below. Presently the yield on the benchmark 20-year Japanese government bond (JGB) is 1.7 percent. In fact it has hovered around this level since 1998. 20-year Japanese Government Bond Yield vs. the USD-Japanese yen 1990-today If Japan does not have the internal funding available to handle its needs, it will have to look to international investors for this funding. So Japan is faced with a triple-whammy of pain: 1) Rising funding needs, 2) Falling internal sources of funding, 3) Rising funding costs because foreign investors will expect a much higher yield than 1.7 percent to account for the risk of holding Japanese debt. Because Japan is facing this triple-whammy with an already astronomical debt load, this mix of problems will likely lead to a vicious self-feeding spiral. Then higher interest rates will lead to higher funding costs and falling bond prices will lead to dumping of bonds, which leads to higher yields to entice new buyers. I believe we are seeing the outlines of what might eventually become a Japanese government bond default as the sovereign debt problem visits Tokyo. My suspicion is that once the markets are finished attaching the euro-zone bonds, they will train their guns on Japan. To sum it up, a change in the global economy and the outlines of a sovereign bond crisis in Japan suggest to me that we must be very close to a major trend change for the Japanese yen. Best wishes, Jack Commercial Member Joined May 2012 3,332 Posts The Land of the Rising Sun is Shining Brighter By Sean Hyman, Editor of Currency Cross Trader Sometimes in life it can seem like when something has been a certain way for a very long time that it will always be that way. It8217s like the brain has a tendency to get conditioned to a situation and decides it will always be that way. Well, investors get the same way about a stock or index that8217s been out of favor for a long time. They can never seem to imagine a day when it will come back. Take, for instance, Japan8217s Nikkei index. It8217s been down for over two years in a row, even as most other stock indices have rebounded. But actually, you can look further back to the larger trend and see that Japan8217s Nikkei was one of the first indexes to top out. The Nikkei topped out in early 2006, while most other stock indexes topped out at the end of 2007 or early 2008. So, the Nikkei has really been trading lower for about six-and-a-half years. Well, you can see where it would be easy to get sucked into the thinking that those stocks are never coming back. However, it8217s simply not true. There are a couple of things changing that are going to set up the Nikkei for its first real rally in years. A Change in Direction for the Yen The first thing is the change in the yen. You see, the Japanese yen has been strengthening in a big way ever since July of 2007, and it finally peaked in October of 2011 but traded somewhat sideways through January of this year. From that point, the yen has begun to descend. In fact, let8217s take a look at the Nikkei in the weekly, three-year chart below with the Japanese yen plotted below it. Why is the fall of the yen important Japan8217s Nikkei is filled with major exporters such as Toyota, Honda, Mazda and Sony. From the viewpoint of an exporter, you want a cheap currency. If your goods appear to be cheaper because a foreigner8217s money goes further, then they are more apt to buy more of your products. However, if your currency is stronger, your products will appear more expensive to foreigners and you8217ll sell fewer. So what the currency is doing is a big deal. It8217s one of the determinants of how well these companies will do. In other words, when dealing with a strong yen, they have the wind in their faces, and when they have a falling yen, these companies finally get the wind to their backs. If you8217ve ever ridden a bicycle in the wind, then you know it makes a big difference whether the wind is with you or against you. It8217s the same with these companies. With absolutely no other changes, their performance and results will vary widely depending upon the value of the yen. What Stimulus Means for the Yen The other thing that has changed in the favor of the Nikkei is that Japan has instituted an 8220asset purchase program.8221 A pretty sizable one at that 8230 to the tune of 80 trillion yen. Then, on Friday, Japan announced 750 billion yen (9.4 billion) of stimulus to boost growth. The measure was undertaken after bond dealers concerns over government spending raised fears of a disruption at a December debt sale. This will be good for Japan8217s stocks for now and bad for its currency. So between the stimulus programs and the change in the direction of the yen, Japanese stocks have a chance to reverse course for the first time in over six years. With that in mind, let8217s look at an ETF that tracks Japanese stocks. It8217s called the Wisdom Tree Japan Total Dividend ETF (DXJ). Let8217s check out its daily, two-year chart below. Declines in the Yen Can Be the Catalyst for Huge Moves in Japanese ETFs Going into 2012, the yen took a tumble and Japanese stocks got their first good shot in the arm they8217ve had in a long time. Now, the yen is beginning to fall off the map again and DXJ is breaking out of its triangular coiling consolidation. I believe this sets up DXJ to where it could head to 36 per share or higher over the next two to three months. This means the stock could move a whopping 11 within that very short time if the yen keeps falling as I believe it will. So check out DXJ. I believe it8217s primed for its next launch higher and it8217s going to catch the masses off guard. They8217re going to wonder where this rally came from. But you8217ll know that it8217s come from the new stimulus and from the change in the direction of the yen. Have a nice day Sean Hyman Editor, Currency Cross Trader Joined Oct 2012 Status: Member 4 Posts Many thanks for your description of the triple screen trading strategy. As a noob I began researching simple strategies that utilized only one indicator alongside EMA. They seemed to work okay but my dilemma was that I didnt have enough confidence entering the trade with analysis from just one indicator and a few supportresistance lines. It was when I began looking into trading systems that utilized a few indicators to reveal an overall meaningful picture, that I discovered Elders Triple Screen Strategy. The following link is a PDF to the section of Elders book, Trading For A Living, where he explains the strategy in detail, screen by screen: trading-nakedlibrary. ingsystem. pdf As of now Im using the FXCM web trading system, but hope to get metatrader4 very soon - just need to install windows on my mac As you may already know, this platform is limited in terms of customization and availability of indicators - between Williams R and Stochastic, Ive decided to use the latter for my oscillator so that I can focus on strong signals and avoid being swayed by market noise. Elder doesnt talk much about interpreting Stochastic here, so I appreciate your extended explanation about this. My three screens are as follows: large: 3 Hour (MACD EMAs (see below) intermediate: 30 min. (Stochastic) small: 5 min In my 3 hour chart Im also using 13EMA, 28EMA and 53EMA. Ive noticed that the size of the MACD histogram bars can give hints about the strength of 13EMA movement and its likelihood of crossing the other two EMAs and flipping the direction of the trend. As histogram bars get longer, the momentum of 13EMA seems to get stronger, which may signal a change in trend. Im just about ready to employ this system on my own for the first time. Looking forward to having a greater sense of confidence in my trade decisions Members must have at least 0 vouchers to post in this thread. 1 trader viewing now Forex Factoryreg is a registered trademark.