There is a new category of technical analysis for Forex market trading called category shift theory and this new strategy is based on shift ratio which breaks the three main types of chart conditions:
- Choppy Markets
- Make up the trending markets
- Down Trending Markets
Shift theory focuses on important information about what the ratio does and ignores the data that are responsible for false signals and noise. Shift theory works better than any other form of technical analysis of the trading method because it focuses on the science of price analysis. Most technical analyzes today focus on the finished price as the main piece of data analyzed. The main problem with this is that many traders do not realize that indicators are nothing more than measuring instruments and need to be treated that way. You need stable data for accurate reading when it comes to price measurement. I want to use an example of trying to weigh yourself on a scale. Getting the right reading is almost as important if you keep jumping around while trying to weigh yourself. The closing price does just that. It has an optic or down tick every time and it changes the reading of most of the indicators and as a result there are lots of noises and false trading signals.
Shift trading ratios depend on undeniable data on market trends. Here are some examples:
- Prices on any chart can only be raised.
- Prices on a chart can only go lower if they are new low.
- The choppy market has bars that have a high percentage of overlap.
The shift theory ratio as a trader is a great tool for keeping traders disciplined and adhering to sound trading principles. As an example we will cover hints in 3 different situations of reading and shift ratio marketing:
- Trending up
- Down trending
When the market situation is slippery the inside shift ratio is the plot that arranges the type of marketing. What the inside shift ratio does is the percentage of the current bar that overlaps the previous bar is a high percentage of all choppy markets that overlap each other. Easy to see on any chart but most indicators cannot measure these types of conditions simply because they depend on the closing price.
If the market is trending, a high shift ratio is an indicator that measures that kind of price change. The bars of a chart in trending markets should be even higher and this is an undeniable fact about upward moving markets.
The lower shift ratio during the down market is the indicator that measures the strength of the down trend. It is again based on the undeniable fact that bottom-up markets must go downhill in order to go downhill.
In the end these strategies work and the proof of it lies in the back test. One of the dirty secrets of many indicators is that they don’t really work and that’s why no one is willing to show any back test results. So if you want to find the best forex trading indicator, you need to take a look at the shift theory ratio. If you want consistent and proven results, you as a trader must focus on important data and ignore the data that is responsible for signal noise and lag.