Forex has much in common with "Fuzzy logic" by Lotfi Zadeh and "Fuzzy Thinking" by Bart Kosko. In fact, the new branch of the science of Forex is named "Fuzzy logic". The latter issues from the titles of the editions mentioned.

However, it is not recommended to overestimate the significance of this approach and these articles. – ie, one must not get talked into "an endless loop of it". At the same time, it is absolutely necessary to comprehend the essence of "Fuzzy Logic" theory. As applied to Forex, it means to see the multiple-choice character of the evolution. That is, the process depends on the starting parameters and on factors organizing in the course of development. Each of these elements is binary – ie, it is basically logical. However, the correlation between these components (factors) can yield results cardinally different.

This is why often mathematicians are powerless at Forex. Specialists of this profile are used to deal with the binary systems, where the multivariate development is not implied. That is, 2â € ™ 2 = 4 forever, independently of news, correlation between trends of various types, currency pairs, etc. At Forex, only the system elements (components) can be measured accurately. Otherwise, the currency pair movement would be predictable in advance for years. Such things are inadmissible – especially at the controllable Forex market.

That is, the very same elements in various combinations can result in various variants of the currency pair movement at Forex.

For instance, even a fresh graduator from Master Forex -V Trading Academy can detect points of opening and closing of the session trend. After several weeks of the training, the graduator will be able to do this with the error just within several points for the currency pair with the volatility of 50-100 points.

Within the framework of a session trend, the principles of opening and closing transactions are systemized in Masterforex -V Trading System. These rules, being binary, are clearly defined and logical. They perfectly fit for earning profit in the course of a trading session under certain conditions, known beforehand.

The further prospects for trends (the session, weekly and larger (longer) ones) depends on a combination of at least hundreds of component. The latter are also binary.

Let us take into account the following factors:

1. One must calculate the ratio of the inter-week trend to trends that last from several weeks to months. One must see what the session trend represents by itself – ie, is it a wave of a larger trend, the trend correction, a flat or the larger trend reversal.

2. It is necessary to determine the correlation between the session- and weekly trends under the different conditions.

a) One must distinguish the cases when the natural recoil does not exceed 23%; the natural recoil makes 38%; the natural recoil is 50%; the natural recoil varies within 62-76%; the natural recoil makes more than 100%.

b) It is necessary to see the correlation between currency currencies within the framework of the session and weekly trends. That is, one must consider the following situations that can spring up: EURO and GBP fall or rise with respect to USD together; EURO and GBP fall or rise independently one of another; EURO and GBP rise, while Australian- and New Zealand Dollars can not "break through" their flats – otherwise, they can starting the reversal. You see, situations can develop in totally different ways.

3. One must understand the role of the awaited news under the conditions of various combinations of the session and weekly trends. Clearly, news can be better or worth than prognostications. The reaction to the issued news can result in the flat, correction, the trend reversal or its prolongation. You should try to understand ("feel in your brain and fingers") the inner interconnection between such factors. One must issuer from the following factors:

a) Each of the reactions is binary – ie, it is natural. You can clearly detect the point, where the session trend starts in order to open a deal.

b) The binary element combination is also important. For instance, the news is much better than the prognostication, while the market has reacted just in the form of the currency pair flat at Forex.

By giving analysis to this example, you should try to find out a sequence of such binary elements by yourself. This can help you to understand the principles (logic) of the currency pair movement. It is necessary for deciding whether to open a deal either on "sell" or on "buy".

The following factors are important:

· The point of the currency pair exit from the flat and the exit character.

· The correlation between treaties.

· The time (moment) of the breaking through the flat level.

· The character of the currency pair movement (flat- or trend- wise) – as well as the movement of ally contracts during a session trend.

· The levels and sublevels as components of a finer dimension during the currency pair movement in a session trend.

· News issuing in every certain time interval.

· Points at which a session trend can be closed – with the accuracy up to multiple points.

· The reversal character at the end of the session trend. In Masterforex -V Trading Academy, one can find these materials in the section "Zigzag-fractal system".

· Estimation of the correction for the possibilities of the development of the trend, its transformation to a flat or the reversal.

· The role of the session trend for a larger trend (the weekly, etc.).

It must be emphasized that each of these elements is binary. The combinations of various characteristics of binary elements yield different variants of the movement of a given currency pair within the framework of Forex binary (vague) logic.

For instance, there is the logic chain of the binary elements

· A flat;

· A heavy session trend;

· The session trend end;

· The correction to the trend;

· A new wave toward the trend.

Depending on characteristics of each of the above-enumerated elements, this logical chain can determine the following changes:

· A new wave of the trend.

· A flat.

· The trend reversal.

Thus, there exists a wide range of various binary components. On the basis of them a large diversity of ways of the currency pair movement is formed within the system of Forex binary (vague) logic.

You must study the currency pair movement charts. After this, you should try to trace out the trading binary logic that follows from the concept of binary elements. The aim is to understand the following aspects:

a) All transactions at the European session were opened upwards from fractals only on "sell" (as regards GBP and EURO, to start from 1.7500 and 1.1908, respectively).

b) The point of deal close (buy-in) was located at the lowest local peak (the margin error was just several points).

c) On the contrary, all deals at the American session were opened on "buy".

d) There was a warning that the flat-like movement was forward to be awaited. In this connection, it was recommended to open only super short deals from the recoil because any heavy movement was not expected at the American session.

Naturally, participants of Masterforex -V Trading Academy earned profits even at such a difficult (tense) day at Forex.

There is another example.

· On February 14, 2006 (Tuesday), participants of Masterforex -V Trading Academy were holding up (making) prolonged deals on "sell" at the European session. In the vicity to 1.7300, it was recommended to close those deals.

· However, at the American session all deals were short and on "buy".

Further, you should try to perform the next task by yourself. First, one must give analysis to the currency pair movement on February 13-14, 2006. After this, it is recommended to predict the currency pair movement on February 15, 2006, making use of the binary element concept. Then you can look at this movement at your point-of sale terminal, determining the following.

a) What binary elements did exactly this movement?

b) What an alternative was possible (at what point and under what conditions, which were binary as well)?

Notes:
Full text of this article and pictures of examples you can see Aricle

If you wish to be trained on Trading System Masterforex-V – one of new and most effective techniques of trade on Forex in the world visit Masterforex-V Academy

Source by Vyacheslav Vasilevich