Head and Shoulder is a trading chart pattern that is used in technical analysis. It forms at the top of the ascending trend. Head and Shoulders is a strong signal about trend reversal. On the other hand the reverse “Head and Shoulders” forms at the bottom of descending trend signaling soon to become up trend.
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Forex market can be either in trending or ranging conditions. It is quite difficult to make a trading system work for both conditions. There are many trading systems that work in trending markets, such as swing system and breakout system. I would like to focus on range trading systems here. If you spend some time online I’m sure you come across ads inviting you to join worldwide market of currency trading. Since you are reading this article I can assume that you are either thinking about or already have started you trading career in Forex. Many people after initial slap of loosing their money on [...] One of the key principals of the technical analysis says that price often lies but the momentum tells the truth. The same way as professional poker players play with partners not with card, professional traders make their decisions based on the momentum not the price. A trading system based on momentum can become an invaluable tool for trading in Forex. However traders often have a question what momentum model to use in trading system. In this post I would like to describe the way of designing simple and effective trading system using the Moving Average Convergence Divergence (MACD). |
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