Hi guys,
starting from the idea that “history repeats itself” what do you think of a forex trading strategy that is based on verifying how the price moved in the same conditions as the current price?
For example, assuming that EUR / USD is currently in an uptrend with high volumes and a cross over between 2 moving averages, it makes sense to check how EUR / USD has behaved in the past when it was in an uptrend with high volumes and does a crossover occur between 2 moving averages and enter the market based on these checks?
This is about as deep as TA needs to be to give you an edge. You don’t need to have 100% knowledge or certainty, just a better than 50% probability of being right.
The issues arise when you try to compare different time periods in different calendar periods - hard to know you have correctly weighted all the influences and criteria and accounted for all of them. Nevertheless, a worthwhile framework.
@GP17 why don’t you look for the answer yourself? It’s called backtesting.
And even is this backtest shows good results, you have no guarantee that It will sustain in the future, but that’s where your Risk manager skills will be useful.
Thank you for the answers,
from your comments I understand that the importance of the analysis of the “past” must be given the correct importance and that it is better to give more importance to the “present”.
For the “present”, does it make sense to carry out an analysis based on indicators and enter the market only when the price action confirms these entry signals?