What's a 30-minute showing bias and how to use it? What is the bias Indicator (BI) based on the distortion indicator is basically the opening share price range will be analyzed: How to select stocks trading tactics Entry Stop Loss settings
The distortion indicators of the time and price. The time element is simply the first X number of minutes of the trading day. to determine the number of minutes used to bias the decision indicator as a trader. Determines the bias ratio than the first 30 minutes of the trading day. I found this period to work the best for my creating strategies for day trading.
I will focus on the 30-minute BI because I believe that this is the best time frame used for day trading. I believe that the market tends to experience time spent around 10:30, as many reports appeared about 09:30 to 10:30 Fund managers also seem to start their day on at this time. Thus, the BI 30 minutes include both these factors.
The BI component of the price of the day & # 39; At the end of the trading range and BI period. This means that the BI is defined as the stock for 30 minutes & # 39; and the high and low of the day 10:30
The BI is not the opening price. In fact, the opening price for the calculation does not factor in BI. For example, if you were to open BHP $ 26.49, then sell the $ 26.06 at 10:15, then reverse and rally $ 26.86 10.30 BI would be 30 minutes a day & # 39; s 10:30 or range $ 26.06 – $ 26.86. This is because the 30-minute period BI was $ 26.06 and $ 26.86 BHP & # 39; and low and high, respectively.
Note: You said the day & # 39; 10:30's range, not the province of the day.
The simplest way to specify the use of display distortion an intraday candlestick chart, 30 minutes interval. The first full candle, and then set the bias Indicator range. Draw a line from the top of the candle and one on the bottom of the candle, and today & # 39; BI and marked on the map.
As you can see, defining BI easy. The 30 minute BI necessarily high and low, the first 30 minutes of trading. I realized that BI often reveals the bias of a stock the day.
Why such a strong indicator of bias?
The fact that the view of such informative BI period means that often determines the distortion of the day as bullish, bearish or neutral. The BI means that the bulls and bears up to their original position of the sun. Detachment BI indicates that one side is stronger than the other. The above set of mobile BI: the prevailing mood of bullish stocks. The way in which the stock breaks above and is trading above the BI indicates the strength of the bullish sentiment. The same but opposite analysis applies when a stock moves below the BI.
In a step BI indicates that the stock is weak and the bear out of control.
How to Use BI to help us in our day to day trading or short term?
The most basic use of BI principle is that if a stock is trading above the Bias signal will have a bullish bias, and when Bias index during trading you should have a bearish bias.
Commercial break out any outbreak of BI is a simple concept, but there are some considerations to take care of, and some tactical trading approach should be taken into account.
As set trading plan before you enter a trade must recognize the stop loss point. This is where you will exit the trade if the stock moves against you. The loss, which is expected to arise when you leave your stop loss point of "risk". As the cash management, the position size based on this risk calculation.
we have established a set price for a given stock, and have drawn the line on our chart 2. Of course, all good intraday chart, I IG Market charts the easiest to use.
Note: For the purpose of trading, I prefer to use a 5 minute chart.
Let's take a look at two practical commercial approaches to BI.
first initial breakout Buy Buy retracement second after the second time.
What is a breakout? It is defined as the eruption when over the entire five-minute candle on the top line of the province.
First approach: Buy early break
access to the market at this stage the most aggressive approach because it does not allow any form of reinforcement to the stock & # 39; Pause and resume above the resistance level. Perhaps the most promising stocks to be maintained for this strategy. However, they also have the advantage that in many cases, the lowest entry point.
This strategy, I would like to see the eruption, accompanied by a large amount, over the 5 minute chart. The stop loss should be set on the bottom line of the province, it is drawn after 30 minutes. I believe that it is best to an automatic stop loss because it avoids any emotion.
However, many times you will find that the 30-minute bottom line often determine the risk levels that are too high. There may be a range of, say, a dollar is too high to be a fair risk / return ratio. It is the case, we recommend that you use based on the specified stop level of the market, say, a moving average level, or the level of support. If you can not find a station level to ua pretty good risk / reward probability, it may be better to miss the trade and look for a better option.
So, to summarize the first approach: Buy the initial volume breakout Watch your stop loss Pass to trade when the risk / reward ratio is not good enough.
The second approach: Buy a retracement after the second eruption
This tactic can meet the more conservative trader. Here is your chance to evaluate how well the stock broke out. We can see that the stock is trading above the BI. If this approach you are looking for the market to create a new retracement after the breakout. As the market shows that a new outbreak occurs, you can buy a kit retracement level under arrest.
The advantages to be confirmed and retracement to have more information before you enter the trade. It will not be stopped for a stock that is not immediately next to erupt. The downside is that not all acne retrace. You may of course not miss the best opportunity to make a stock offering on that day.
There will be a lot of opportunities everyday. Be patient and get the appropriate time determined by the risk. Do not take trades late, because you feel as if you're going to miss.
Many times we find that the stock retraces or move sideways until later in the day, then suddenly erupt again and give a good trading opportunity, perhaps during an afternoon rally.
In summary, the second approach: Wait Wait initial breakout retracement Buy a second breakout Be patient, often with the second eruption occurs later in the day.
If you have any questions, do not hesitate to contact me. | E-mail: Ejk@tradingaustralianshares.com
Now we need to expand on this subject is looking at first selection in refining stocks to buy second entry point 3. how to set a stop loss
Ok, let's explore how to select stocks.
I recommend that you create a watch list of all the files could be interested. You can explore many avenues to find interesting stocks.
Most CFD stands show the most traded stocks of the day. It is always good to choose a high traffic stock. IG Markets biggest daily stock changes, presented the final price,% change and volume. This is a very informative resource. If you open an account with IG Markets my website, I offer one month free advisory service to help you to get used to the platform and refine our activities.
You should also watch out for the latest news. I recently managed a few good trades in Asciano, after reading a series of news about the company.
Select stocks with high volatility, as they will give you the best chance to make a profit on the trading day, but it should be a good stop loss. We'll discuss a little later stop loss. How do you define the high volatility? Simply divide the daily average trading range (ATR), the stock price to one percent. The higher the percentage, the more volatility.
For example, BHP, s / p 26.4, ATR 2.02, volatility of 7.65%. AIO s / 1:55 p, 0.371 ATR, the volatility of 23.94%. A huge volatility, good chance to make a profit, but also dangerous not a good stop loss.
I made myself an Excel spreadsheet where I can quickly evaluate volatility.
You should also look for a bullish signal. I always prefer stocks that have the same or slightly higher than the previous day of trading & # 39; s close. The previous day & # 39; and often a large area of potential resistance, so when the stock trades above this high is a bullish signal.
In summary, the selection of shares: o Create a good watch list and check every day. o Scan files to find news on the news. o A list of the biggest changes every day or similar, check how fast you move. o Look for stocks over that of the previous day & # 39; s high. This is a bullish signal.
He said to buy the initial breakout or buy retracement after the second time. When we enter the trade?
volume one of the most important indicators to look for. The outbreak is not much volume does not say much. If you want to buy in large quantities in the initial outbreak that such outbreaks. I also think it's a good idea to wait until the full range of breakthrough five-minute candle settled above.
If the volume does not exist, you wait for a retracement and buy the second time.
be able to buy before the stock price reaches a breaking point? In many cases you can, but only when the volume increases. Sometimes it will be a great opening price, followed by a rapid retracement. This is sometimes followed by a rapid growth in this high volume. This may be a buy signal, but once again, it should be ensured that the volume is strong.
as an analysis of each sample, you do not always find that all the criteria are met. You must be able to identify quality trading opportunities based on the criteria and the good commercial tactics to take advantage of the opportunity. For example, if a stock shows a bullish picture is relatively large quantity and high volatility, it is possible that a candidate with a more aggressive strategy of buying the initial eruption.
If the stock does not show good volume or lower than the previous day & # 39; s closing price, will be more cautious and wait for the second outbreak.
Avoid stocks that do not present an easy to identify trading opportunities. There will always be other opportunities.
is set to
Set stop loss is essential. Before you enter a trade, you should know your stop loss point. This is the price at which you will exit the trade if the stock moves against before you take your profits. The loss, which is expected to arise when you leave your stop loss point of risk. The risk will determine the position size.
The low range of BI is the most logical area of resistance, so the point to set your stop loss. However, they often find that it gives me very great distances and the risk reward ratio just is not there. There are some ways to raise your stop loss point and so reduce the risk of professions and find a better risk reward ratio.
in the two graphs I Exponential Moving Average (EMA) lines, one to 15 times, and the other seven times. Remember, I use the 5 minute chart of my shop. The 15 EMA line is good enough to use, unless the stock price waves very quickly. In this case, we use the seven EMA. Always use a trailing stop loss to lock in gains, closing up every 5 minutes, of course, never going backwards.
Which method you use to set your stop loss will always depend on your risk tolerance.
Very often, if the trade rise sharply after a good result, I quit again see table flattening out. This helps to opt for a decent profit, but often I found that the share price retraces a bit and then move higher.
In summary, stop loss techniques: o The low range of BI EMA 15 o o o Exit 7 EMA if the graph flattens when a good result.
Remember, trading 70 per cent to 30 per cent in science and art. You have to use your experience and intuition all the time. Most of all, you should be able to cope with some minor losses.
Attempting to Bias Indicator, you will find profitable.
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Source by Eric Kratzer