Cayman indicator is quite a useful tool that allows to filter signals
Every experienced trader knows that big players have their own rules of forex trading. Usually they use crowds for divorce and lure small market participants into their own traps. This happens when the market maker needs to enter or leave the market, covering a position of large volume. In other words, he creates liquidity by manipulating the majority opinion. What conclusion can be drawn? Right, to be on the majority's side in Forex is fraught with big losses. There is a reasonable question, how to determine the mood among traders? For this purpose, an indicator for the Cayman Forex market was created, which shows which direction of transactions is preferred by most traders.
Using this information, which is provided by the developer of the indicator - the company AMARKETS, you can easily understand where the market will reach the oversold / overbought zone, which precedes the reversal. "Cayman", unlike traditional oscillators for forex, accurately shows the balance of forces at the moment, as it does not observe the price, but based on real data.
How to trade against a crowd
Those who first come across mood indicators, and the Cayman indicator in particular, usually do not understand how to use the obtained values in practice in order to accurately recognize when the trend is not going to stop and when it is ready to reverse.
When studying the indicator, one should take into account simple truths:
- If demand exceeds supply, the price will rise in any market;
- If supply exceeds demand, then the price will fall;
- Market makers skillfully manage the price;
There is no such thing as everybody buys and selling and constantly earning.
You can also add a few words for beginners. Take into account that the Market Maker, fixing the profit, opens orders against the market. To do this, he tries to lure as many small traders as possible, makes them believe that the movement will continue, and then he simply closes his positions.
This situation occurs at the maximums, when a level is broken through or a new maximum value is updated, resulting in the formation of large Japanese candlesticks, and the appearance that there is no danger to open positions. Therefore, a trader using the "Cayman" indicator can understand in advance when there are a lot of bulls or bears in the market, knowing that the market maker will return to the game right now and start "shaking out the extra passengers".
At the same time, Cayman can show a situation where buyers and sellers are equal. Often, this happens during the flutter, and in this scenario it is better to wait aside or trade from the borders of the side corridor.
So, the indicator developed by AMARKETS is quite a useful tool that allows you to filter signals and orientate yourself to the market realities.
Optimization of the Cayman indicator
Since the developer of the indicator is AMARKETS (go to the website), you need to open an account with a broker to use it. The indicator can be used in the web terminal and the MT4 terminal.
It is easy to master the trading algorithm. The process is often not very difficult even for beginners who have no experience in using such indicators. There are no parameters that need to be optimized. You can choose only the thickness of the main curve of the algorithm.
The indicator is displayed as a curve, located in a separate window under the price level. Besides the curve, two important levels can be seen in a separate window: 70 and 30. These levels are needed to reveal the current ratio of buyers/sellers.
If the curve reaches the level of 70, it indicates that most speculators create buy positions, i.e. the market is overbought and there is a high probability that the trend will reverse.
If the curve reaches 30, then it indicates that there are more bears in the market. This indicates that the trend is oversold and will soon reverse. We recommend the article about trading against the trend.
Where can you find the Cayman indicator
The indicator can be found in the personal cabinet of the trader who is the client of AMARKETS. There are several versions of the indicator:
Indicator for MT4 trading platform.
The company has also developed an advisor "Cayman". Once the indicator is installed in the terminal, it becomes more convenient to use it. However, for this purpose, you need to open a real account and make a deposit.
It is recommended to use this indicator as an auxiliary one or together with other analysis methods. The joint use of Caymann indicator with other methods will allow traders to significantly improve their trading.
Generally speaking, the above mentioned
The "Cayman" indicator is an effective algorithm that allows you to accurately determine the mood of the market crowd at the moment, which affects the trading results positively.