According to L. Williams (the champion of the world in trading), the 2nd secret of the success consists in detecting the appropriate points of opening deals under the condition of the currency reversal.
On the face of it, L. Williams’s secret is rather simple. That is, one deals with the breaking through the zigzag (the wave base (bottom)) M15 towards the opposite direction. It makes the reversal, the deal being immediately opened when the given level is broken through.
The reversal pattern theory according to L. Williams.
Below the author submits the practical examples of the currency reversal and opening of deals according to L. Williams – treasury bonds (15-minuts bars).
All details one can find in L. Williams’s “Long-term secrets of the short-term trade”.
L. Williams’s charts indicate the following:
1. The majority of the deals made according to this technique do yield profit.
2. However, here we are interested in the minority of the deals that ended in the “stop” and losses. That is, one tries to understand why L. Williams’s technique does not work sometimes. Respectively, one wants to avoid “stops” and losses under the condition of the zigzag reversal in M15.
In practice, work at Forex demonstrates that the automatic copying of L. Williams’s technique can cause damages much heavier than those depicted in L. Williams’s chart concerning the treasury bonds (the 15-minutes bars). It is submitted in the charts from L. Williams’s “Long-term secrets of the short-term trade”.
Let us examine the charts that depict the behavior of several currency pairs at Forex. There are the examples of the trader’s “stops” coming into action 4-6 times a day when one works according to this technique. In the chart submitted below, such points are encircled.
At the same time, L. Williams doesn’t dwell on the filters that select (winnow out) the false breaking through the levels at M15. The true ones permit us to gain profit.
Besides, this author doesn’t dwell on “short” deals – i.e., the pips during the trading session. It is the day of the deal obligatory closing at the end of the short-term trend. Otherwise, “long-term” deals can be kept on being opened during more than a day – thus, the profit is coming.
The reader should try to solve this problem by himself. By seeing the secrets of the world-champion at Forex, one can regularly gain profit at the short-term trade
Promptings from Masterforex-V trading system.
1. The reader must understand the theory of L. Williams’s reversal patterns.
Further, the reader should divide L. Williams’s chart into the independent patterns – in order to investigate them in detail.
Examining these 4 independent charts, the reader should make the 2 identical pairs of them. That is, one must “find” (sense) their features in common – i.e., the essence of the forex currency pair reversal algorithm at Forex).
One must see the difference in these charts (details of the currency pair reversal algorithm at Forex
In L. Williams’s charts, the reader should try to draw the missing elements. This enables understanding the place and significance of each of these patterns in the real trading. In this way, one can easily detect such patterns at Forex.
The two continuations (extensions) are inherent in each of such patterns. The aims of the movement are clearly stipulated – up to one point. By understanding these goals, one can get profit in the both directions of the currency movement. The reason is that a currency “is moving” according to the algorithm, the grounds of which are pointed out by L. Williams (in details, see a chapter concerning forex market controllability in Book 1).
The reader should try to see the correlation between L. Williams’s tactics in the work within the short-term work at M15 and a trend in a larger time-frame scale.
A prompt by Masterforex-V trading system is intended for understanding the essence of the pattern reversal in the short-term trend M15 according to L. Williams.
We now dwell on the synthesis of the medium-term and short-term trading.
The chart 1 (March 21-23, 2007) is submitted above. Here there are the charts 2-3 that depict trades in a larger timeframe H4 for the same currency pairs at Forex on April 2, 2007.
GBP/USDD
AUD/USD
EUR/USD
Here arises the following question. One must calculate the possible ways of the currency pair further movement at Forex. Besides, one must keep in mind L. Williams’s theory of the short-term reversal at M15.
The author hopes that he has suggested the following ideas to the experienced traders:
· The essence of L. Williams’s short-term trend (M15) reversal and its importance for the real trade at Forex.
· The points where L. Williams’s reversals indicate the necessity of holding a “long” deal or a “short” one.
For novices at Forex, Masterforex-V trading academy materials are available. Unsolved secrets of the technical the real trade analysis are discussed daily. The aim is to give analysis to the conditions of the real trade at the market.
You can discuss the chapter with the Academy members by following the link
Chapter 1. Unsolved "trap of experts" by Larry Williams. >>
Chapter 2. Unresolved secrets of expanding triangle by Cornelius Luka
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Chapter 4.BASKERWILLE’S DOG as an UNSOLVED ENIGMA, PROPOSED by A. ELDER (the beginning) >>
Book 3. Points of opening and closing of positions at the Forex market (basic course) >>
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