Trend following remains one of the most popular and reliable approaches in forex trading. We’ve all had the experience of witnessing an incredible trend, and wishing we had been a part of it. Such trends often begin after a shift in market fundamentals, and are subsequently maintained by herd mentality. Catching one of these big […]
What Is Drawdown in Trading? – TradingTact
Risk management is a cornerstone of successful trading. Most traders quantify risk by measuring the drawdowns incurred by their strategies or portfolios. Drawdown is the decline in account equity from a prior equity peak. For example, if your peak equity is $5000, and your current equity is $4000, you have a $1000 drawdown. As trading progresses, […]
What Is the QQE Indicator? – TradingTact
The Quantitative Qualitative Estimation (QQE) indicator is derived from Wilder’s famous Relative Strength Index (RSI). In essence, the QQE is a heavily smoothed RSI. Both the QQE and traditional RSI are plotted below for the USDJPY. Notice how the traditional RSI and the QQE’s smoothed RSI line follow price action with little lag. Unlike the […]
Do Bollinger Bands + Candlestick Patterns Work? – TradingTact
Bollinger Bands are one of the marvels of technical trading. They consist of a simple moving average surrounded by a pair of upper and lower bands. These bands are placed at a certain standard deviation multiple above and below the moving average. Bollinger Bands are typically defined by two parameters – the moving average lookback […]
Awesome Oscillator Forex Trend Strategy – TradingTact
Like the MACD, the Awesome Oscillator (AO) is a momentum indicator that measures the difference between two moving averages. It is calculated as follows: Williams recommended the 5 and 34-period simple moving averages, though you are free to optimize these if you wish. Since the 5-period moving average reacts faster than the 34-period moving average, […]