Two Targets Method – The Brand-New Method of Finding Exact Entry And Exit Prices

Certainly, financial markets analyses can be performed for various reasons. They may also be evaluated by different means. However, the goals are the same. The goal is to establish a long-term or short-term speculation on price change for an underlying investment asset. Therefore, the rest of this narration will be based on the assumption that a reader has been or currently is a trader within the financial markets. It is also assumed that he/she is fluent in corresponding terminology. It is speculated that by reading this commentary, he/she is interested in an opportunity to enhance his/her technical analysis toolbox by including new and exciting (or unusual) methods.

Time intervals and technical tools chosen by the enduser are oftentimes randomly chosen . For the purpose of our illustration, we will show (for the sake of simplicity) many examples of our logic which are exhibited by charting intraday historical data and making analyses. The method’s efficiency can be observed on the realtime data charts too.

It is understandable that many traders’ biggest concern is finding the correct or “high probability” entry points that will result in a successful trade. However, it should be mentioned that without a similar or corresponding exit strategy, one may find it very difficult to make a steady profit (even though he or she has implemented a timely entry into his/her market position).

This happens for a number of reasons. Oftentimes, if you take profits too early while in your position, then the risks increase for financial losses. These losses will put you “into the red” after you experience your first unprofitable transaction. As costs of trading and losses increases, the profit margin decreases. If the profit is not taken at the proper time, then you may observe that the market may reverse against you. This will result in a drop in one’s profit. Alternatively, a previously profitable transaction may be transferred into an unprofitable one in very short order.

Even for those who choose a random or hap hazard entry, is possible that one can arrange for an appropriate exit post factum; this may result in a series of transactions that will bring profit. Keep in mind, many newsletters and subscription services play tricks on their clients. Their signals only offer the “entry price” and then they hope for (and provide accounting for) the profitability gains of relatively “perfect” exits.

In daily practice, many traders implement simplified risk management techniques and profit goals. This may be implemented fixed values (ie. percentages of the trader’s available finances for trading). They may implement a percentage goal for their profits and may implement similar downside risk percentages to close their positions. They may arrive at these fixed values from some article, their own false reasoning, experimental testing, from their own trading experiences or preferences. This is fraught with dangers since there is usually no way to estimate how long the trend will continue and/or how strong the possibility of a reversal against the trader’s position is at the current time.

The Two Targets Method allows the enduser to estimate in a rather simple way by algorithmic calculations, a proper entry and exit. This solves the problems related to deriving the key high probability entry-exit levels. However, the Two Target Method does not represent a trading system as such.

First of all the Two Targets is a method of analysis, and thus, its results can be used together with other common analysis methods (or independently from them). The analysis methods may implemented in day to day trades as part of a trade plan. Additionally they may be tailored in accord with one’s own personal preferences, required timeframe intervals and adapted to the enduser’s ultimate goals and/or needs.

Our aim is to show how target levels can be determined, and how exact levels can be used as the preferred values to o place into one’s entry-exit orders. Application of these levels can be different depending on pattern setups and timeframe the financial time series is observed in.

The Two Targets of Five Impulses system determines the target levels by evaluating the first price movements at the beginning of a time series trend. In order to perform the analysis it is necessary for the time series trend to have at least five extreme points (impulse points) or more. According to these extreme points (their price levels) two target levels are derived by utilizing a mathematical algorithim to calculate the exact price targets.

Unfortunately, I cannot fully describe the Two Targets Method in this brief article, but you can get our 36-page report of the Two Targets Method at our site for free.

Good Trading,
Michael Shishmarev

Article Source: http://www.articlesboard.com

Michael Shishmarev is a full time trader, author of Two Targets Method and a leader of Vipforex Group of traders. Visit www.2targetsmethod.com/report/ to get the free report.

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