Smart Strategy to Play on the Trend

Literally, everybody knows that big market players have a cherished formula for success in financial markets. However, this formula is considered to be a secret recipe for wealth, which the alchemists of the whole world tried to discover, trying to turn the streams of figures on the monitor into real cash flows, and not everyone was able to observe this miracle.

It is believed that the secret is very complex and involves the most advanced developments, which makes it not only securely hidden, but also unattainable for understanding. Maybe it is true, I do not know the secret, but I know how to connect to the largest players in the market and earn when they do, and a set of fundamental information allows you to improve the forecast and take the seeds from the chaff.

First, let's see how the price behaves.

Let's say that you are eyeing the contract, at the ratio USD / JPY from 01/01/2018 to 31/07/2018.

The picture shows that since the beginning of the year the trend has already changed, the fall is replaced by a rise and the cycle is replaced by a cycle. At the same time, it is also evident that the trend continues for quite a long time, the prospects for its further continuation are already in doubt. Any technical indicators will not show a sufficiently accurate signal regarding further actions, which means that the situation is not clarified.

As private traders, we certainly have some advantage over large institutional managers, however, we can not trade when the trend is unclear to us and we may not risk money unless we are entirely sure.

For this purpose was created a special instrument, which identifies fluctuation trends and helps currency funds managers. So it aids to find the best solution, even in a highly ambiguous situation, at the expense of others.

Picture 2. The implementation of the indicator to predict the trend of the instrument for the considered period .

Picture 2 shows that the movement of the indicator quite accurately accompanies the trend. Significant rises and falls of the price were initially accompanied by a change in the indicator (not for the user, there really is a correlation of 0.8 - this is a very high correlation, especially for financial instruments).

As can be seen in Figure 2, the main part of the trend was captured, and hence the signals can be considered successful. But it's not very clear - what to do and when.

As a guide for transactions, you can use the upper and lower bounds as in Picture 3.

To open a position:

• To open a long position, we propose to use the intersection of the lower boundary in 20% from the bottom up;
• To open a short position, cross the boundary 80% from top to bottom.

The peculiarity of the instrument is that it points to long-term trends.

At the same time, we can also consider current trends in the context of one week to make a plan for the game.

Picture 3. Price and indicator graphs with the lower and upper limits.

So now we see that the current position is uncertain, as the price has reached the anticipated ceiling, which indicates an early change in the long-term trend. However, in the context of the week, we can conclude that the current week will be positive for the asset.

Picture 4. The daily chart price USD / JPY, where one candle equals one day.

Thus, we saw that the indicator is really giving lucrative signals, which is explained by the fact that large funds mainly form volumes in these markets, and their attitude to the asset is expressed in a decrease or increase in the position on this asset.

Therefore, the position of the asset for the week is bullish (purchase).

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