فوركس ساتو

ENDED – This was touched on in the previous section (Trending) as all
trends eventually end but I’ll try to elaborate some more here.
forex sato
You know the cliché, “what goes up must come down”, well for S.E.X. I think
of them as being magnetic, hence “what separates must come together”
(Conversely, when bunched I think “when together it’ll separate”). All good
trend cycles sooner or later come to an end, and then the whole cycle repeats
itself.
So how do you recognize when your profitable run is coming close to an end,
and more importantly when to tighten up those stops to maximize what you’ll
exit with? This is what we’ll attempt to look at here.
First of all realize that trading isn’t an exact science, it’s more of an art. That
said, however, you do have specific trading rules to follow so you don’t just
leave it to chance. Sometimes by following the rules you score perfectly,
getting stopped out near the peak of the profit potential, and sometime you cut
yourself short from the maximum profits. Generally speaking, by following
the “rules” unemotionally you’ll “win” most of the time.
Take a look at the following chart of GBP/USD:

Near the top you have a nice triangle formation and inside (especially near the
apex of the triangle) your S.E.X. lines have bunched up perfectly. Soon after
the breakout you would have been trying to find a suitable place to jump in
using any of several entry techniques as you have established that some kind
of trend has begun (also noticing that your S.E.X. lines have spread apart
nicely). You had a strong down trend for several days, and then it weakened
but continued to down trend. So far so good.
What happened next? (look inside the circle) Well, as the trend began to
loose steam you notice that the 20 period S.E.X. lines (in this chart purple is
the 20 EMA and black is the 20 SMA) began to converge together… and then
they crossed. Two days after they crossed they got penetrated by the candles.
At this point you would be justified in feeling somewhat nervous and wanting
to exit to preserve your gains. But hold on. What you do is you start
tightening up your stops. Don’t manually exit the market UNLESS the
market has started to make a dramatic reversal and the candles have made a
severe punch through the 20 S.E.X. lines. In this chart example they haven’t,
so we don’t panic. It is common that as a trend nears it’s end that the market
will approach or even poke through those lines. This is usually your first clue
that the trend is likely to soon end, but as you’ll see in this example it isn’t
necessarily the case.
Next the market kept on moving down (whew). You would now set your stop
to be at that high to protect the profits you have made thus far.
Then the market moved back up and consolidated. Your green money line (5
period S.E.X.) has crossed over your black 20 SMA, but surprisingly not the
purple 20 EMA. Usually when the 5 crosses the 20 S.E.X. lines it’s pretty
much game over for the trend and you tighten up your stops just waiting to
exit. That second red candle that formed a high would be your obvious choice
to reset your stop at after the market moved down a bit a couple days later.
Well, most often this would have been the end, but surprise surprise you got
lucky! Your 5 & 20 S.E.X. lines got bunched inside what appears to be a little
triangle formation (a pause in the market), and then it continued to trend
again! Having followed the proper rules of trailing your stops in this case
didn’t result in getting stopped but allowed you to remain in the trade going
for more profits (I was quite pleased when this happened).
As you can see, this chart is in real time and the trading opportunity is still in
progress (trade isn’t over yet). So far this one trade is well over 1000 pips in
just 2 months!
I just wanted to start off by showing an “ending” that turned out to not be an
ending, but rather a continuation. Often situations like this end up retracing to
some fibonacci level far enough to have gotten you out of the trade, but now
you see that though sometimes you seem to get out “early” by following the
rules, sometime the rules do end up working in your favor. Ok, so now let’s
look at a real “ending”.
Take a look at the following chart.

some fibonacci level far enough to have gotten you out of the trade, but now
you see that though sometimes you seem to get out “early” by following the
rules, sometime the rules do end up working in your favor. Ok, so now let’s
look at a real “ending”.
Take a look at the following chart.
Here is another GBP/USD late in 2004. Near the beginning you see that your
5, 20 and 60 S.E.X. lines are nicely bunched (always prefer to start when your
60 S.E.X. is bunched). Though there are certain technical reasons that
indicated the potential of this move to the left of what is shown on this chart,
it wasn’t the easiest to spot (nor wouldn’t have been your most confident
entry), but this chart snippet nicely shows the “ending” signs, hence why I am
showing you this here. Obviously we are looking at the major uptrend here.
Near the bottom you see your 20 S.E.X. lines are diverged quite a bit
indicating a robust shot up, but soon after the initial upsurge the start closing
together as the market quickly looses it’s momentum. The 20 S.E.X. lines end
up crossing making you suspect that perhaps this was a short lived “trend”,
and you start trailing your protective stop losses even tighter “just in
case”. Notice however that the candles don’t penetrate through the 20 S.E.X.
lines and continue making progressive higher highs and higher
lows. Obviously this is all good and you are still in the trade.
All of a sudden the market makes a strong upwards move for about a week
and a half (“that’s nice” you think), and the purple 20 EMA makes a
reappearance crossing above the black 20 SMA. So far so good.
Then the inevitable happens – the market retraced back down. Here it poked
your 20 EMA, remembering that this usually indicates that your friendly trend
could soon come to an end you raise your protective stop loss to that low after
the market went back up (had it made a dramatic run through the 20 S.E.X.
you might consider a manual exit, but it didn’t in this example).
The market went back up somewhat then receded down again. You noticed
that your 20 S.E.X. line has again crossed over (purple under black). The
green money line keeps creeping closer to the 20 line until sure enough it
crosses. You keep in mind that you have your protective stop already set at
that last significant low so you don’t worry about it until the market moved up
again so that you could reset it to the more recent significant low. There then
followed another low that is just marginally higher that you could reset your
stop at.
Finally the death of your trend occurs when you would have got stopped out at
1.9117. The candles and the green money line have reversed going south, just
as you could now go somewhere south (i.e. a nice beach in the tropics) from
the profits you exited this trade with.
forex sato