Whispereye:

Channel indicators give me too many false breakout signals. For example, the Bollinger bands indicator show me a breakthrough but the price reverses. That happens during trends and when the pair is a sideways range. I can;t figure out how to differentiate fake signals from real ones.

Look, you should check the closing price of the candlestick and enlarge the period. For example, to get the confirmation of the breakout signal, you need to wait for the close of the current candle. Whipsaws do not guarantee breakouts, they might point out strong resistance or support instead. Increasing the period will lower the number of signals, especially the fake ones. I use 21 or 34 for BB.

Hey guys
I’ve been testing several strategies on a demo account. I agree that channel indicators might have false signals, especially on short-term timeframes and currency pairs with low liquidity.
I wonder if they will work in the same way with the FTT type of trading?

Thogar46:
Hey guys
I’ve been testing several strategies on a demo account. I agree that channel indicators might have false signals, especially on short-term timeframes and currency pairs with low liquidity.
I wonder if they will work in the same way with the FTT type of trading?

Technical analysis works for every type of trading, as well as for every type of asset. The only difference might be in the trading volume, which has a direct impact on the accuracy of signals. So for instance, if you take some company shares with comparatively low liquidity, you’ll see many gaps on price charts. That will influence mathematical formulas that work with the historical data and result in the value of a technical indicator.
When it comes to FTTs, I would consider working with higher time frames in terms of market research and technical analysis. The target is to find strong trends or a trading range between sustainable resistance and support levels. Once you have determined the price direction on a higher timeframe, you can switch to short-term charts for trading. Don’t try your luck for too long though. Grab a series of profitable deals and run away

I remember a period when I traded FTTs using Parabolic SAR as the basic indicator. The main idea is to catch a moment then the Parabolic switches the sentiment and its dots jump above/below the price. Right after that, I used to open several deals according to the reversal signal. It was important to get three or four profitable trades and then stop as the price action was unpredictable after the rebound.
At some point I have increased the accuracy by adding the Average DIrectional Index and Stochastic oscillator to filter the signals and get additional confirmation of signals.

Have you good people ever thought about the nature of false signals? I mean why do they appear in charts? I think the key issue here is divergence. When a trend is constant, and the number of buyers exceeds the number of sellers constantly, technical indicators start shifting the middle range to higher values. And when a short-term rebound happens, people start comprehending that signal as a reversal, but that’s just a retracement. I’ve seen many times when a fake reversal signal comes in before a sideways range with no clear direction. Once indicators are reloaded, the trend continues like nothing happened. I’m talking about 4- and 1-hour charts of multiple currency pairs.

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Mazugore365:
Have you good people ever thought about the nature of false signals? I mean why do they appear in charts? I think the key issue here is divergence. When a trend is constant, and the number of buyers exceeds the number of sellers constantly, technical indicators start shifting the middle range to higher values. And when a short-term rebound happens, people start comprehending that signal as a reversal, but that’s just a retracement. I’ve seen many times when a fake reversal signal comes in before a sideways range with no clear direction. Once indicators are reloaded, the trend continues like nothing happened. I’m talking about 4- and 1-hour charts of multiple currency pairs.

This is exactly what makes me confused with technical analysis. I mean I have a strategy with MACD, RSI and MAs. It works fine, I can understand all of the steps of the trading algorithm, all of the conditions of signals. The only concern is the number of signals as they are quite rare. So I need to look at other assets and different indicators. But if I take other indicators, I just can’t differentiate fake signals from real ones. How do you make the conclusion whether the price action you see is just a rebound or a total reversal of the previous trend?

Look, you have a set of indicators that add each others’ strengths. MACD is a momentum indicator, slow and lagging instrument. But the accuracy of signals is high. RSI is fast and sensitive, it’s needed for additional confirmation and a closer scale of the price action. Moving averages add information about trend direction and reversal ranges. Why wouldn’t you take a similar combination of indicators to apply it for other assets?
ADX - momentum indicator
Williams %R - fast oscillator
Keltner channels - instead of MAs
One more recommendation I have. Don’t try to catch long trends. Two or three profitable deals in a row can get you a decent profit per day, enjoy it.

Do you guys think that fundamental analysis can also bring profitable deals? If yes, please tell me your thoughts, thanks.

I like trading news. When an important event happens, volatility jumps and strong trends may occur. At least in a short-term perspective. So when I trade FTTs, I switch to ultra-short-term timeframes and keep opening trades in the same direction for 15 or 30 minutes. The only condition is that the report has to be unexpected. No matter if the figures will be better or worse, the main thing is to be unexpected. In this case, traders start repositioning themselves and the price action can trigger an acceleration after breaking a strong support or resistance level. So one-way price action often happens in that case.

Rockrunner:
I like trading news. When an important event happens, volatility jumps and strong trends may occur. At least in a short-term perspective. So when I trade FTTs, I switch to ultra-short-term timeframes and keep opening trades in the same direction for 15 or 30 minutes. The only condition is that the report has to be unexpected. No matter if the figures will be better or worse, the main thing is to be unexpected. In this case, traders start repositioning themselves and the price action can trigger an acceleration after breaking a strong support or resistance level. So one-way price action often happens in that case.

I hate news trading. I tried it several times with different techniques, but that is not something I’m good at. Quotes start jumping like crazy, and it’s getting hard to understand what is going on. No way, I would better trade in calm market conditions using technical indicators.

One of the long-term trading strategies is based on a combination of both fundamental and technical analysis. The basic idea is that charts can form some patterns or backgrounds for trend reversals, while fundamental news can trigger the movement. This strategy might not be good for Fixed Time Trading as most traders prefer short-term charts. But it will be useful to determine long-term trends and stay on the right side of the market while opening deals on short-term charts.

One of my friends trades on the US Non-Farm Payrolls report only. Once a month. He always says he needs a new helmet for that haha. The basic idea is not only to guess the figure of the report, but also market reaction. SOmetimes it happens that the market reacts in a totally different manner than most of the experts anticipated. As for me, it’s better to stay out of such practises, as the store nearby is running out of helmets ahahah.

The market is full of surprises. It happens that the price action can go in the opposite direction to the forecasts, even though the report comes in exactly as predicted. There are lots of additional factors like overbought conditions, for instance. Traders can just take profits from previous speculative positions and use the wait-and-see strategy. This is why I always try to look at the combination of factors. Patience is the king. You need to wait before pulling the trigger.

Thank you, good people, for sharing your experience. I think I need to learn more about trading as I lack a strategy with a proven track record.

Look, you should not forget about the demo account. It’s good for practising. I suppose that theoretical knowledge is a great plus but it’s worthless without practice. You can backtest several trading strategies, see how different indicators work in combinations and different settings. Besides, it’s important to follow the news and monitor how the market reacts to this or that event.

Dagelv:
Look, you should not forget about the demo account. It’s good for practising. I suppose that theoretical knowledge is a great plus but it’s worthless without practice. You can backtest several trading strategies, see how different indicators work in combinations and different settings. Besides, it’s important to follow the news and monitor how the market reacts to this or that event.

Don’t forget about Olymp Trade’s educational material. THere are so many video lessons and articles to read. I like the topic of trading psychology, it is essential for trading.

Come on guys. We should keep it simply stupid. Grab your piece of profit and run away. Overcomplicating the analysis does not lead to profits. I would consider focusing on a narrow range of assets to watch and know how they behave. Spreading the attention could create too many mistakes and a fear of entering the market. Just keep doing what you do and the profit will come.

Has anyone tried using pivot points, Fibonacci and price levels in the Olymp Trade platform? How effective are these methods of technical analysis?

Pivot points and price levels show you where important support and resistance is placed. These are useful tools for technical analysis, and I use them every day. The thing is that the price action can be different around those levels. You could see higher volatility when prices jump in both directions, or breakthroughs when the trend goes through those levels like a hot knife through butter. Rebounds are also possible if the previous trend is unable to get enough momentum to breach resistance/support levels.

I bet you’re talking about static horizontal support and resistance lines. They are effective, but there are also so-called dynamic levels. A simple trendline always has an angle as trends should go somewhere. I mean it happens that the price action goes in a sideways direction, but that’s quite rare. I use channels and median lines to find average weighted prices. If the market goes too far from them, it’s time to consider a reversal or at least retracement.

As for me, Fibonacci retracement levels are the main tools for graphical analysis. When the trend has a decent distance from the very initial point, you simply connect it with the latest peak or bottom. As a result, you get several lines. The most important one is 61.8% Fibo. THere’s a good chance that an asset price will retrace towards it, reverse and go again in the same direction. I use Fibo numbers even in periods for simple and exponential moving averages. They are more efficient than traditional periods with round figures.

Wow. So you say that a simple channel based on two parallel trend lines and Fibo levels can get you a detailed picture of where to buy and sell?

Well, it does not necessarily have to be the only one tool you use on the chart. You can combine it with technical indicators. For instance, if you see an oscillator showing overbought conditions while the price is reaching an important FIbo level, then you should expect a reversal shortly. Another strong signal is a divergence in combination with the price levels and pivot points. Remember, we are seeking reversal points whether we want to enter or exit the market in FOrex trading, or begin or stop the trading ccylce for FTTs.

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I always knew that Bollinger Bands work effectively in terms of breakout and reversal signals. However, my experiments with it on both FTT and Forex ways of trading have shown that the indicator is vulnerable to many false signals, especially on volatile currency pairs. I tried to increase the period of the indicator to get more accurate signals, but that led to a very low frequency of signals. The indicator shows the trend direction effectively, but it has trouble defining exact leves where the price action can reverse or accelerate. Any ideas how to cope with this problem?

I know what you are talking about. Try to add fast and sensitive oscillators like Stochastic RSI or Williams %R. They work effectively in combination with Bollinger bands as secondary indicators. THe basic idea is that when you see that prices break through the upper or lower band of the BB indicator, you should double-check the signal on oscillators. If they are overbought or oversold, respectively, then you should consider a reversal pattern. But if they have enough room to go in the same direction, then a breakout with acceleration might be in play.

Whispereye:
I know what you are talking about. Try to add fast and sensitive oscillators like Stochastic RSI or Williams %R. They work effectively in combination with Bollinger bands as secondary indicators. THe basic idea is that when you see that prices break through the upper or lower band of the BB indicator, you should double-check the signal on oscillators. If they are overbought or oversold, respectively, then you should consider a reversal pattern. But if they have enough room to go in the same direction, then a breakout with acceleration might be in play.

I think the problem is in the timeframes. If you pick too short ones, the market will be full of noise and any indicator will give you fake signals. The idea of low expiration time is understandable when it comes to FTT trades, but the risk of too weak performance might overcome potential results. I use Bollinger Bands for major pairs on 1-hour and 4-hour charts and it works well. GBP/USD is my favorite pair for this indicator.

The Double-Bolli method will help you solve the issue. The trick is that you add a second BB indicator with the same period but change the deviation to 1 from 2, and mark it with a different color. As a result, you will get 5 lines instead of three. as mainlines will coincide. When you see that the price is hovering between the two upper lines, then the bullish continuation will take place. But if you see that prices breached the second line from above, then a deeper pullback down toward at least the middle line is more likely. The bearish pattern is the same but opposite.

Great ideas, thank you mates. I will have a lot of things to experiment with on my demo account. I could not get to the idea of deviation. I mean I was playing with periods but indeed if you look at the mathematical formula of the BB indicator, you’d see that deviation plays a huge role here. Besides, the standard deviation indicator can be used to give a separate metric of the volatility, and when prices are coming too far from average values, then the reversal or rebound are possible.

Do you think its worth collecting more money to start with an advanced status right away with Olymp Trade or better start with a more comfortable depoit? I'm afraid the traing conditions are not that advantageous for Starter deposits.