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| ForexSAM - SAM Systems | |||
SAM systems are designed primarily to monitor and follow market trends. They are computerized programs that give out buy and sell signals, when four oscillating indicators are agreeable to confirm the market moves. As displayed in the Signals Charts, it does not catch market highs and lows, but it rarely fails to catch market trends. Hence, at ForexSAM site, we rely on the systems to orient our trading posture; for example, if the SAM systems call for buy, we will pay more attention to identifying support prices for buy entry. Likewise, when the SAM systems call for sell, we will switch our preference from buying to selling more often. Like any other trading system in the world, SAM systems are not fail-proof or without punitive setbacks. Given its trend-following nature, SAM systems would perform miserably when the market enters or remains in sideway non-trending mode. To remedy this shortcoming, we have discovered that the same SAM systems, while working well to catch trending moves on the daily charts, can also function well on hourly charts as overbought/oversold indicators during sideway markets. Hence, when the daily SAM signals call for buy entries, we will wait for hourly oversold signals to buy. If the daily signals call for sell entries, we will wait for the hourly overbought signals to sell. In our Quotes/Supports/Resistance table (see Quote/Sup/Res page), the trend-following SAM signals, which can be seen on Signals Charts, are indicated as "UP" and "DN" in the Trend box. The overbought/oversold signals are given as "UP" and "DN" in the Near-term box. A third SAM system, which is not yet fully programmable despite our best effort, is a counter-trend tool that is based on recognition of divergence patterns, price formations, and trend line resistance. All of the criteria are better off left to our technician's interpretation based on his unique insight and experience. These counter-trend indications are given as "UP" and "DN" in the Mid-term box of the Quote/Sup/Res table. When they are different from from the Trend indication, there may be counter-trend opportunities ahead, or the ongoing market trend may be weak, or the market may be ranging sideways. Viewers are advised to largely ignore the Mid-term indication unless they are alerted to its significance in our Daily and Weekly briefings. Long-term (Trend) period covers from a few weeks to a couple of months. Its indication is called to change only by SAM's automated systems, whose signals can be seen on the Signals Charts page. Mid-term period covers from a few days to a couple of weeks. When its indications disagree with the Long-term indicators, it means that the market trend is weak, and that consolidation or corrections may be in the making for a few days even a couple of weeks ahead. Near-term period covers from a few hours to a couple of days. It gives a general indication of market posture in the very next trading session. None of the above signals will be automatically traded on sight. They are merely tools of guidance, upon which we rely to strategize future trade plans, which are executed only by rules of engagement or RRR (Risk Reward Ratio).
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