2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
Adverza tactics is one of the Forex trading strategies, which can be classified as the most difficult. It is based on the combination of numerous models of expansion and attraction in combination with technical methods. The main essence of the strategy is the channel method of trading and the use of trend lines, which are used to build the very working channel. Trading is based on an assessment of the probability of a breakout of the corridor boundaries.
Main trading pattern
The Adverza tactic is used when a certain pattern is formed on the market. To form a channel, it is necessary to form four points: local minima are connected along two points, and local maxima are connected along the other two. The line connecting the highs will be the upper boundary of the channel, and the one that connects the lows is the lower boundary of the channel. A situation should arise on the chart when the price rolls back from the first point that forms a local minimum and forms a local maximum. From the second point begins the formation of a new minimum, which should be higher than the first. Last, fourth, pointis also a rollback, it forms a maximum that will be above the second point. With the help of trend lines, the peaks are connected to each other, and a trading channel is obtained, which was mentioned above.
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Each point that forms a high and low will become the basis for building horizontal levels. They will play the role of support lines and resistance lines. This will depend solely on which trend dominated the market when the channel was built. The Adverza tactic involves identifying the target of the actual trend. For this, an additional trend line from a set of technical tools is used. It is laid in the very center of the working trading channel and passes between the third and fourth points and the rollback point from the 4th high.
The intersection of the new line with the upper part of the channel leads to the formation of the fifth point. It is she who will play the role of the actual trend. There is a high probability that after the moment the price reaches the target, it can be either a light touch or a partial break, the direction of price movement will reverse. The goal setting technique is based on the rules of the attraction model.
Entry points
The Adverza tactic provides clear signals to enter the market. These are breakdowns by the price of the channel borders with the closing of candles behind them. When the lower limit is broken, it is worth considering opening Sell trades, when the upper part of the corridor is broken, a good signal is received to openBuy positions. After the target has been worked out, after the price has reversed and the trend has changed, the scheme for building a channel for trading can be repeated, but for a different trend.
Placing orders by stops and profits can be done using standard trading tactics. As an alternative option for further actions, we can consider the attraction model to determine the movement targets and to set a long-term take profit at a certain level.
Specific trading scheme
The Adverza tactic outlined above is designed for long-term trading prospects. The obligatory quality that a trader who has chosen this trading mechanism must have is patience. Trading on daily timeframes is considered optimal. A prerequisite is to check if the price breaks through the key lines on the weekly timeframes. This will eliminate negative trading on false signals.
The Adverza tactic, which is difficult to fully describe, is a topic of controversy for many traders. This is due to the fact that the signals for this strategy are very confusing and often ambiguous.
What is the strategy based on?
The Adverza tactic, the indicator for which gives fewer signals than manual trading, is a technique for analyzing price behavior based on causal phenomena in history. The main essence of trading according to the scheme is to analyze the properties of the process, according to the resultsdata of which you can make a forecast of future developments in the foreign exchange market.
The trading philosophy is explained by the causality of the formation of a new price range, which takes into account the consequences of the present and ensures the renewal of old prices. We can say that the new price is a continuation of the old one. Each event on the chart takes place in the prism of the leitmotif of causes and effects, which are always taken into account on exchange rate charts. Adverz's tactics, which many traders have tried to explain in simple terms, have a certain similarity with one of the dominant laws of technical analysis. The price always remembers everything. What's coming in the future is nothing more than a reaction to the price of the past. The highlight of strategy trading is that the trader has the ability to predict the future on the price chart, starting from such simple concepts as support and resistance lines.
Main difficulties when working with the system
The Adverza tactic, which is difficult to use in practice, suggests two possible scenarios for the development of events, which is due to trading through price channels. The price always either bounces off the corridor boundary or breaks through it. The safest way to apply the strategy in practice is to take profit when the price bounces off the fifth point in the area of the resistance level. At the same time, do not forget about the option of breaking through the price of that very fifth level.
During a protracted flat, which is a very common phenomenon in the foreign exchange market, it is quite problematic to determine the highs and lows, fromwhich need to be repelled when building a channel. During the period of stagnation, they can be updated quite often. And the last drawback of the system is a belated entry into the market. So, opening positions at the 3rd point can bring much more profit than at the fifth. Drawing a channel based on four points is the use of a full short-term course movement cycle.
The Adverza tactic, reviews of which are very ambiguous due to significant shortcomings, allows you to enter into a purchase or sale after the impulse has exhausted itself, but not at its very source. This is what does not play into the hands of traders, and they often upgrade this mechanism.
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