We have had a lot of gloomy news recently, regarding oil prices, Syria, Russia, Paris, disappointed delivery from ECB, so you could understand the mini collapse on the Dax. We got down as far as the November lows, but the Dax seems to now have found support. We had a decent NFP on Friday and so many people were buying the stock markets based on lower prices.
We are now approaching the fib retracement zone and we may look to trade sideways for a little while for now while people reposition. Somewhere between 10980 and 11060 could interest the bears. My concern about going short is that we have already given up 800 points in December so my question is; has the macro fundamental outlook really changed that much since Thursday? I think yes, the ECB was a set back, but no the macros have not changed that much in the grand scheme. I am maintaining my bullish bias, but reluctant to open a position at the moment.
Actually I am probably going to start getting away from the market a bit more over December, I think the volatility could dry up a bit so don’t really care too much about forcing something.[twitter-follow username=”DaxTrader54″ scheme=”light”] [twitter-follow username=”DaxTradersignal” scheme=”light”]
DaxTrader RSI EA Tips
Trading with an expert advisor during periods of volatility increases the already high risks of trading. Incorrect settings combined with a bad trading outcome (such as ECB Thursday) can wipe an account if you have over leveraged with and EA.
Make sure you limit the number of trades per market on the settings, the default is 10. I personally feel that is way too high. I change that to 1. Be careful how many markets you use the Expert Advisor on. For example, let’s say you place it on 16 forex markets including all the major dollar markets. If a big news release comes out your EA opens up trades, it could open up trades on many of those markets at the same time, so all of a sudden you are exposed to big position and it is goes the wrong way you can be wiped out.
Use the RSI Indicator with Alert to backtest your RSI strategy. Go and look to see if you can find any patterns. For example, put it on a 5 minute Dax chart and use the following settings: 21 period RSI, 80 overbought and 20 oversold settings. Number of candles: 3500. Scroll back through and have a look at where the alerts came. Now choose a strategy and test it. So let’s say you have a 50 point stop loss vs 100 point take profit strategy. Go through each of the signals and see how the strategy would have performed. If you find one that could have worked historically (never a guide for a future success, but as good as any other) test it live with the EA
Setup a Virtual Private Server. I will explain more another time.
Support & Resistance
|200 Day SMA||10703|