I have taken data from eur/usd from 1975 to 2009 and added the 15 day moving averages with buy and sell signals in the excel spread sheet trading system that you can download for free below .

If you want to analyze other data, just remove the data below the close value, and put your data below that row. Historically( 1975-2009) this system will give you profit. But the down side with moving averages is that you will not profit in sideways markets. The advantage of using moving averages is that you will profit from any big trend.

This system is really simple. Buy if the 15 day moving average is below the close, Sell if the 15 day moving average is above the close price.

( I have used excel 2003, so you probably need that to run it ( ore a higher office version), if you don`t have office excel you can get a free trial at Microsoft.com. (You can also use the free alternative OpenOffice) ( The picture is a screen shot from the spreadsheet)

Operating system: Microsoft office excel/ openoffice

Price: Free

Download Now

Here we speak of congestion entrance, a type of trading.

We know that the market moves from trend to congestion and from congestion to trend, in a ceaseless, ever-continuing cycle, repeating itself again and again and again forever. This has occurred as long as markets have been in existence and will presumable continue as long as markets exist in the future. The only times when we do not see this cycle occurring are in times of intervention, regulation, or artificial constraint, such as market suspensions, price-fixing, price limits, market regulation and the like – and even then the disruption is temporary. But as long as supply and demand can vary, and as long as human beings come together in trade and act on their differing perceptions of value and opportunity, markets will engage in trends and congestions.

We can call it by many different names. Sometimes we have talked about equilibrium and disequilibrium, some speak of vertical moves and horizontal moves describing the way the chart moves across the page, some talk about distribution being an up movement and development being a sideways movement. But it is all the same.

Trends are moves that carry us progressively in one direction; congestions are market periods where the market oscillates between support and resistance and moves across the page in a horizontal manner.

We saw in earlier articles in our Technical Analysis Explained series that we have a clear definition of what a trend is – it is a series of at least three consecutive bars that close on one side of the PLdot. Since a congestion is the opposite of a trend, we expect our definition of a congestion to be simple as well, and it is. A market is in congestion when it does not close on one side of the PLdot for three consecutive periods. How could it be otherwise? We say the market is either in a trend or not, and we know what a trend is, so congestions are everything else. We reduce the question to dialectic. The market is either in trend or congestion. It is yes, or it is no.

Now we break our discussion of congestion into three separate lessons, and for good reason, as we define three types of congestion – congestion entrance, congestion action, and congestion exit. As you will see there will be a great deal to talk about in each of these three types of trading. But here, as an overview, let’s just set down the definitions.

Congestion entrance trading occurs after the market is in a trend with three consecutive closes on one side of the PLdot, but then the next bar closes on the opposite side of the PLdot. So that bar, with its close on the opposite side of the PLdot than the previous three bars, is the first bar of a congestion, and the first bar after a trend. That is simple, and clear, is it not?

Congestion action trading occurs as the market swings back and forth, closing on one side or the other side of the Pldot as it moves forward bar by bar. We will talk about this in detail in the next article in our Technical Analysis Explained series and so we will just give this definition here and move on.

Congestion exit trading occurs when the market leaves congestion and is about to start a new trend. That makes sense, does it not? And so if the market violates one of the confines of congestion, either the dotted line or the most recent block level, then the market is manifesting congestion exit trading. (We define these terms shortly, so hang in there for a bit.) Again, there is a lot, a very lot, to say about congestion exit trading, and it is a most attractive topic (since it lets you get aboard a trend before there is a trend, so to speak, or during the very moment of its birth). But that is for another time and so we will not deal with it more here. Watch for more articles about this.

One of the most difficult concepts for beginning traders to grasp is that of support and resistance. This is perhaps so because support and resistance are invisible until they are encountered, and even then without using multiple timeframes it can be hard to recognize what is actually happening.

Enormous amounts of time and effort are spent trying to use technical analysis training to determine where support and resistance levels are in the market. Many different tools have been used, including moving averages, trend lines, candlesticks, and retracement levels.

Some work, some do not, and more aggravating, some work some of the time but not always. Knowing when a tool or indicator will be reliable is information worth a lot of money.

Most efforts fall short because they attempt to use a single tool, and try to apply it to a single timeframe, and try to apply it under all circumstances. Better results come when a variety of tools, each optimized for particular market conditions, are employed in a well-thought-out and highly organized program that encompasses both trends and congestion action. Technical analysis training will show that further progress towards accuracy will accrue when these tools are simultaneously applied to several different timeframes and the differing results are taken into consideration.

The best results come when a comprehensive theory of market action is employed that can help the trader understand what the market is doing right not, and why it is doing it, and what is likely to happen in the near-term future, and supply the trader with projected levels of support and resistance that can be monitors in real time as the market steps forward.

A tall order? Well perhaps, but it has been accomplished in a number of major technical analysis systems.

Let’s start with some definitions.

Support is something below price, and it is a force that when encountered pushes price back up into the range from where it came. It consists of buyers who are present in the market but waiting to take action until price reaches a certain level, or of short position holders who may be forced to buy if the market runs against them. It is this bunching of buyers around a certain price that causes support to act like support.

Resistance is something above price, and it is a force that when encountered pushes price back down into the range from where it came. It consists of sellers who are present in the market but waiting to take action until price reaches a certain level, or of long position holders who may be forced to sell if the market runs against them. It is this bunching of buyers around a certain price that causes resistance to act like resistance.

Support and resistance can be identified with conventional technical analysis like a 10-period moving average. Or it can be represented using a more evolved system taught in technical analysis training like Drummond Geometry.

With this method we see a more evolved use of tools to create higher time period overlays of support and resistance areas from the weekly and monthly charts onto daily chart. We also see support and resistance shifting from bar to bar as the market state moves between trend and congestion. These more developed methods give the trader a lot of support in his buy-sell decisions. With this method you will see that the support and resistance areas are projected into the future, so the trader can prepare himself as the market steps forward.

In future articles we can discuss how to use support and resistance projections in making these entry and exit decisions. Good tools make good traders and good traders can make very impressive financial returns.

The market moves in definite steps, and these steps can be isolated and studied, one by one. Furthermore these steps follow each other in a regular sequence, and that sequence can be defined and analyzed, piece by piece.

If we understand the “type of trading” that the market is manifesting at any given moment, we will be able to come up with the tools and techniques that are most effective for that particular kind of market activity. Furthermore, if we know which type of trading came before, which is here now, and which is likely to follow, we will have a leg up on most other traders. We will always be able to choose the best tools to use, and we will be prepared for what is about to happen. Sometimes that’s half the battle in trading.

Experience and a technical analysis explained course has shown that our definitions of types of trading must be crystal clear and without the slightest ambiguity, otherwise our analysis quickly gets muddy and loses value. Furthermore we want definitions that can be applied to any market, and to any timeframe. We need definitions that are both simple and robust.

In this technical analysis explained series we will spend some future articles talking about the types of trading, and we will find that simple definitions combined with careful observations can take us a long, long way toward trading success. We need to be very organized about our observations, however.

We will start with a simple overview, so that you can see how things will fit into the big picture as we proceed. Then we will start with our discussion of the market in a trend run. After we make our observation about trends, we will see how the Drummond Geometry tools combined with time period analysis will enable us to identify those areas where the trend is likely to originate, and where it is likely to terminate. We will also see how our monitoring tools, the envelope and the 1-1 zones, fit in with our growing collection of theory and practical observations. And finally we will suggest some trading rules that may help you as you develop your own trading plan.

So, let’s get started….

We divide all market activity into two major divisions: trending markets and markets in congestion. We further divide congestion into congestion entrance, congestion action, and congestion exit. We add trend reversal as a final market condition, making five “types of trading” in all.

The definition of a trend is irrevocably attached with the position of the close of the bar vis-à-vis the PLdot. There is no other element to the definition of a trend, though there will be lots to say about the characteristics of various trends. But not the fact of the trend. A trend is always defined by this rule: If there are three closes on one side of the PLdot, the market is in a trend. This is the three-close rule, and there is no kind of trend that can exist without this three-close-on-one-side-of-the-PLdot rule. Never. Next in our series on Technical Analysis Explained we will talk about Congestion Entrance.

Traders love a good trend. Everybody wants one, for their very own, and understandably so, since a great deal of money can be harvested in a good trend.

But how do we trade a trend? Well, there are a number of tactics that one can use. (Some old traders say that trends are easy since any old trading plan will work. Because prices are always moving in one direction, even if you enter with a poor trade position, it makes no matter, since the trend will bail you out in the end. There is some truth in this old maxim, but nevertheless there are a lot of refinements that we can bring to trend trading.)

One of the first things all market analysts learn is that technical analysis explained how to recognize a trend as early in its existence as possible, and that one definition of the trend, based on the relationship between the close and the PLdot, lets us do that. You will recall perhaps that the definition is three closes on one side of the PLdot defines a trend. After the third close you are in a trend.

This is important because the best, the strongest, and the richest part of a trend is often the earliest part, when it first gets going. Then, once you recognize a trend the thing is to hang with it as long as it exists. If your trading situation permits, you want to add to your position by pyramiding, so that as the trend develops your profits also grow more rapidly.

Surely getting aboard a trend and hanging on tight is one of the best ways to make money in trading. If you have learned nothing else in your education, you should at least know that how your style of technical analysis explained trend formation is one of the basic building blocks of any trading system.

All well and good, you say, but how exactly does one time the entry to a trend? And how do you manage a trade in a trending market?

Of course trends are not all the same, some are slow and some are fast and others are old and some are young.

First we will consider the fresh new trend. The market has been in congestion for some time, perhaps for many days if you are a swing trader, or for many hours if you are a day trader. The parameters of the congestion are clear to you. Then suddenly there is a change in conditions, frequently (but not always) news driven. The market starts to move rapidly on one direction.

This is a situation for rapid action. Enter in the direction of the trend as soon as you can and hang on. The exact point of entry is less critical than the fact of getting aboard. This is a move that will last for many hours or days and the sooner you are aboard the better! You can buy into this trend as it breaks the congestion parameters or as the next bar retraces to the top of the trading bands. If it is a real trend based on fresh new energy, you won’t see any retracements deeper than that for quite a while!

Contrast this to a mature trend that has been going on for a while. Can you still get aboard? Yes of course, but if the energy is “mature” and starting to lose a bit of its oomph, then you will need to be more cautious in your entry techniques. In this case you should be looking for a pause in the trend, a price retracement to the midline of the trading envelope at least. Check on your higher time period to make sure there is sufficient potential left in the trade, enough to make it worth entering this no-longer-fresh trend. I usually use technical analysis tools and methods when trading and in this case the retracement would be to the neighborhood of the PLdot.

If you are uncertain about these guidelines some time spent examining a chart will surely bring your understanding to a higher level. And most traders can benefit from a detailed look at technical analysis explained in a training course of their choice, as they hone their entry and exit skills.

Next time we’ll talk about entering and exiting congestions.

Let’s continue our discussion of congestion action trading in our series on technical analysis explained.

We cannot exit congestion until we have a new trend run. Without a new trend run, the market is in congestion. Congestion exit is defined as a trend run out of the confines as established by the preceding congestion action.

So, let’s say this again with a little different emphasis.

We can say that congestion action does two things.

One: It creates strong original confines.

Two: it creates strong expanded confines.

The original confines are created by the congestion entrance bar, which is the first bar of congestion action, and the next bar, which is the second bar of action, and the third bar if there is no trend run. The highest high and lowest low of these three bars determines the confines, as defined by dotted line and block level. These are the original confines of congestion.

We should point out here that in the third price bar of the congestion, price does one of two things. Price either:

1) Enters into a trend run, and thus into congestion exit, and trend reversal, since congestion action is not confirmed by the third bar closing on the other side of the PL Dot. The congestion confines are then determined by the original confines, as set out by the highest high and lowest low of the first two bars. OR…

2) Closes on the other side of the PL Dot, and thus continues congestion action. In this case the confines of congestion are determined by the original congestion, as set out by the highest high and the lowest low of these first three bars.

Now, what about expanded confines?

Well, congestion action can create expanded confines by moving outside the original confines of congestion or any subsequent confines, providing that there has been no trend run in the meantime. When price moves outside the latest confines it redefines the confines of congestion. From that point on, any congestion exit deals with this redefined confines, and not the original confines.

(We should note, of course, that the original confines can have an effect on price, since any line or level can do so, but generally speaking, the true confines can be built through repetitive congestion action, without a trend run appearing.)

As long as there is no trend run, the confines can be expanded. Only when price moves into a trend run and exits congestion can we say for certain that the final boundaries of congestion have been defined.

So for Drummond Geometry, technical analysis explained defines congestion in a clear and consistent manner, and gives us a framework that we can work with in identifying the confines of congestion under any circumstance.

In future discussions in our technical analysis explained series we will talk about trade entries and exits in congestions. We will find it useful that we have established the clear definitions about congestion.

If you want to analyze other data, just remove the data below the close value, and put your data below that row. Historically( 1928-2009) this system will give you profit. But the down side with moving averages is that you will not profit in sideways markets. The advantage of using moving averages is that you will profit from any big trend.

This system is really simple. Buy if the 200 day moving average is below the close, Sell if the 200 day moving average is above the close price.

( I have used excel 2007, so you probably need that to run it, if you don`t have office excel you can get a free trial at Microsoft.com. (You can also use the free alternative OpenOffice) ( Below is a screen shot from the spreadsheet)

Download Now ( 1.26MB )
Price : Free
Operating system : Microsoft Office Excel 2007 /OpenOffice
Publisher : american-dollar.com

Are you a beginner trader who just started to invest in Forex trading? Well, if you are, then you will want to equip yourself with a meta trader expert advisor to aid you in trading. What is meta trader expert advisor?

Basically, it is a type of software, also known as robot, consists of several mathematical algorithms that are able to analyze the market trend and give profitable predictions. Just for your information, it is written using MQL4 language (Meta Quotes Programming Language Version 4). Generally, it can serve as a platform for many trading tools such as indicators and expert advisors.

As a matter of fact, an indicator differs from an expert instructor. An indicator merely gives you indication on the trend in the market. On the other hand, an expert coach gives you notification on the trend as well as the action to be taken. Simply put, the expert instructor aids you in decision making. As you know, human emotions are easily affected by unwanted elements such as fear, stress and anger. Thus, making a decision in times of emotionally unstable has been proven fatal.

Nevertheless, an expert advisor is obviously emotion-free and better in decision making. You might be wondering why use an indicator if we can have an expert coach. In fact, if you are an experienced trader, you will want to make your own decisions. In addition, you might have your own trading strategies that you are certain of making profit. However, indicators are only suitable for short term trading. You should use an expert advisor as a guide for long term trading.

Moreover, with the help of meta trader expert advisor, you will be able to do your trading in your own comfort zone. Remember that forex does not close. Will you be able to monitor the market for 24 hours? That is why you will need an expert instructor to be your eyes when you are asleep. Various notifications in terms of entering or quitting a trade will be generated when there is a crossover identified in the market. Nowadays, notifications or alerts are made audibly and visually.

What is the best forex system trading available? Is there a “best” trading system? What kind of systems are there? What is a system anyway?

What System Trading Is

Before we can even start the search for the best forex system trading program available, we have to know what system trading is. Otherwise, how would you know what you’re looking for, and on what basis are you going to measure what you find?

What is system trading anyway?

System trading is the concept of having a preset of rules that defines as much of your trading as possible. These rules include the following areas of:

• Entry Rules
• Exit Rules
• Portfolio Risk Rules (Money Management)
• Compounding Rules
• Scaling In/Out Rules
• When Not To Trade Rules
• And Other Criteria

By following predetermined rules, you don’t have to re-think each time a particular situation comes up in the markets. The idea of having rules is to remove as much trader discretion as possible to the point where trading can be automated.

Types of Systems

While there are various types of systems, they all fall into pretty much the same broad categories. These categories are:

1. Trend Following Systems
2. Counter-Trend Trading Systems

If you’ve already studied trading for some time, you’ll realize that each particular category has its own share of advantages and disadvantages.

There will be times when Trend Following Systems make huge profits because the markets are consistently trending. But the moment markets stop trending and start consolidating, then trend-following systems tend to get whipsawed, creating more losers than winners.

On the other hand, Counter-Trend Trading Systems experience more losers when markets are trending. This is because by nature, counter-trend trading systems attempt to pick tops and bottoms within consolidating markets. But when markets consolidate, counter-trend trading systems excel in making short term, quick profits in sometimes almost rapid succession.

Choosing A Forex System To Trade

Ultimately, there is NO BEST Forex System Trading Program. It depends on what you want to accomplish with your trading. If you already have a trend following system, you might want to diversify part of your trading capital into a counter-trend trading system, and vice versa.

The rule of thumb, again, is always manage your money with your eye on RISK first, before returns.

Wishing You Smart and Profitable Trading!

Metatrader 5, the new version of the popular trading software will be released this fall. It is the successor of Metatrader 4 that is used by more than 300 brokers all over the world. The program is in development for more than 4 years, and the code for it is rewritten from scratch. Metatrader 5 will future high performance and outstanding working speed, over 70 analytical tools and new 21 timeframes, Depth of Market (DOM) feature, advanced built-in reports on all trading activities and much improved strategy tester for indicators and expert advisors.

One of the big improvements of Metatrader 5 is the ability to process traders Foreign Currency Transactions in various financial markets, including futures, options and stock markets. MetaTrader 5 Terminal supports also 4 types of operation execution: Market, Request, Instant and Exchange. In addition to Market Watch window, a so-called “Forex Glass” tool is added, which is necessary for successful work in the stock markets. With all new improvements and possibilities it is clear that MetaTrader 5 is more than just an MT4 upgrade.

MetaTrader 5 has a new integrated development environment called MQL5 which includes MetaEditor 5, the MQL5 programming language and MetaTrader 5 Strategy Tester. It is responsible for the development and use of Expert Advisors, custom indicators and scripts. Unfortunately the MQL4 and MQL5 languages are not compatible. Because of that, every custom indicator and EA must be rewritten to work with Metatrader 5. The platform itself will also be not backward compatible with MT4 and MQL4, however, MetaQuotes can release a tool which converts the MQL4 source code to MQL5 or allows MQL4 executables to run in MT5 is some virtual environment.

The MQL5 language will have much faster execution speed in comparison with MQL4 (it approaches C++ in terms of this parameter), and will allow to use more complex experts and to process large amounts of the information. As compared to MQL4, the new language boasts up to 20 times faster execution speed. MQL5 includes new data types, a new structure, classes and, in this respect, the object-oriented programming which makes the development of EAs quicker, easier and more flexible, especially for autotrader developers. Because the language is more object-oriented, it will be also easier to learn. Another feature of MQL5 development environment is the aadvanced built-in debugger for testing and error finding and the intellisense system which speeds up the development process.

The MetaTrader 5 Strategy Tester is a very powerful development tool and enables a developer to test a newly programmed indicator, expert advisor or script on historical data before using it in real trading. The new strategy tester will have advanced reporting options and possibilities to compare the trading results of different EA’s which each other. The tester will also better use the power of multi core processors to speed up the testing process.