Market Timing – Don't Try To Predict, You Will Lose; A Live Example

Market Timing – Don't Try To Predict, You Will Lose; A Live Example
By Sacha Tarkovsky

I see traders all the time whose aim is to buy low and sell high in currencies but this does not work.

Trying to “buy low sell high” and predict market turning points is not the correct way to do market timing

You will lose, here we will explain why, with some live examples.

Why the bulk of traders lose:

The reason is traders try and pick tops or bottoms as they want to catch the exact turn of the trend for example, if prices are strongly moving to support they buy and “hope” support holds.

If you "hope" in forex you will lose base market timing on the strength and direction of prices only.

Most traders simply buy into support even if the direction and momentum is down.

This is a huge mistake.

Another way and examples:

What you need to do is wait for confirmation that support has held and prices are moving up.

Take a couple of examples we posted on the web.

Were using the futures as an example, but cash is the same logic.

Charting service you can look at is http://www.futuresource.com

We thought prices would decline in the British Pound on Monday, but waited for the recent triple top to hold and entered with confirmation from the stochastic - the ultimate timing indicator.

The stochastic measures price strength or weakness (read our other articles for a full explanation) as soon as the stochastic crossed with bearish divergence we entered.

You may say well if you traded into support you would have made more money – correct but that’s hindsight!

We entered with the odds on our side and have a profit so were happy.

Let’s look at another example.

The Yen.

We wanted to be short Monday and we have seen prices go up to test nearby double top resistance rather than just sell and hope resistance holds were waiting.

Were not going to enter yet resistance has been tested but we want short term momentum to show weakness and put the odds in our favor .

We will wait for the stochastic lines to cross with bearish divergence. At present there prices could go either way.

If prices do fall we wont have picked a top, but we will like the B Pound, have confirmation of resistance holding and price momentum turning down and have the odds on our side.

Never predict, get confirmation.

No trader I have ever known has been able to predict tops and bottoms and those that do will soon lose their money.

Always wait for support or resistance to hold and get confirmation that price momentum is in your favor.

This is a high odds way of trading and the best timing indicator is the stochastic.

It’s very under-used by traders but is the best timing tool for trades you will find 0 check it out and see.

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