Automated trading is a
new concept and is a very effective way of Stocktrading. In automated trading a computer is used to place the trades. The
buy and sell calls are placed automatically when certain rules are met. The
strategy with the entry and exit rules should be programmed with the help of a
programming platform.
The rules for the
execution of the buy and sell calls should be expressed in terms of various
variables and then can be programmed accordingly in the platform. In this
article we are taking an example of bullish engulfing pattern in Candle Sticks.
The candle stick pattern
is a tool for judging the price sentiments. The price movements in a given
period are represented by the candles of different sizes and colors. The size
of the candles represents the extent of the price movements and color
represents a bullish or bearish candle.
The engulfing pattern
is a pattern of trend reversal from bullish to bearish and vice versa. The
engulfing patterns are of two types namely the bullish engulfing and bearish
engulfing. In the bullish engulfing a small bearish candle is engulfed by a
long bullish candle and in case of bearish engulfing a small bullish candle is
engulfed by a long bearish candle.
The strategy can be
programmed based on the rules like the close of next candle should be higher or
lower than the previous candles. Also the entry or exit can be defined based on
the previous close or open.
The above strategies
are extensively used by the technical analysts in the advisory firms to
generate Stock market tips. MoneyClassic Research is a reputed advisory
firm which generates equity tips and Intraday trading tips. The advisory
firms are also helping with automated trading platforms in form of
technological support as well as support on various strategies.
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