Tuesday, May 26, 2009

Delta Introduction

Delta was founded by Jim Sloman and Welles Wilder. Welles Wilder is also famous for developing technical indicators which are among the most commonly used today such as RSI, SAR, and ATR (Average True Range).

Unlike other trading system, Delta places emphasis on time rather than price. The premise is that TIME is more important than price. Delta believes that every market has a cycle and this cycle is influenced by the way our solar system operates. When Delta projects that it's time for market to turn, then market will turn regardless of price. A Delta trader first and foremost concerns about time, and price level is secondary.

Delta is essentially a swing trading system that focuses on time. The idea of Delta is based on a cycle system, where currency makes highs and lows based on a pre-determined cycle. Delta does not try to forecast price level. To forecast price level, we could combine Delta with other methods, such as Fibonacci, trend line, Elliot Wave or other system.

Delta cycle is divided into different time frames: a 4-month cycle, a 1-year cycle, a 4-year cycle, a 19-year cycle, and others. In my post, I often mention the term ITD (Intermediate Term Delta), MTD (Medium Term Delta), LTD (Long Term Delta), and SLTD (Super Long Term Delta). This corresponds to the different time frames cycle.

If you'd like to know more about this system, below is some information:
The official site for Delta is: http://www.deltasociety.com/index.aspx
The official book for Delta is Delta Phenomenon: http://www.deltasociety.com/deltaphenomenon.aspx
Delta training CD: http://www.deltasociety.com/deltatrainingCD.aspx
Another Delta training CD: http://www.deltasociety.com/marketmatrix.aspx

As you can see from the link, these materials are quite expensive to buy. If you are new to FX trading, you may want to try to learn something else first that doesn't require you to pay. The fact of the matter is there is no single holy grail trading strategy which gives you 100% accuracy in your forecast. Stop Loss therefore is a must and proper use of leverage is required. In the end, money management is what determines our success and failure.

So if you are new to FX trading, before you spend money in buying anything, get as much free education as possible. Basic understandings of candlestick, trend line, Fibonacci, and Elliot Wave would be very helpful. In fact, I think trying to learn Delta without basic technical understanding will be quite a challenge, since it takes some effort and time to truly understand and use this system properly. An example of a good free website to learn all of these and more is: http://www.babypips.com/school/
Do check out, read and re-read the money management section of the free website above.

This system, just like any system, will not suit everyone. Some will like it, some will not. Those who like to trade often (daytrader) may not like this system. Many people also hate and think of this system as a scam. For me personally, this system is a welcome addition to my trading arsenal.

For some people, this system's theory about repeatable market cycle influenced by the heavenly bodies is completely rubbish, so be aware of the contra opinions out there. This system is also considered by many to be overly complicated. To me it's pretty straightforward and natural, but it's a different experience to each person.

I created this blog to function like a trading journal, to record how I understand this system and how I implement it to analyze the forex market. I did not create this blog to declare that this is the best system or that this system has no flaw. I like this system because it suits my personality and trading style. It's by no means a perfect system, there'll definitely be times when the analysis is wrong. Even if the system can't be wrong, I am a human, and I sometimes make mistakes in my interpretation of the system. But for every trade idea I posted, I would provide a logical reasoning from my interpretation of the Delta system, and for every mistake I make, I will provide a reason of why and where I get it wrong. This blog is best used by those who either know and use the system, or by those who already have their own reliable system but want to compare and want to know the timing element.

The last thing I want to say is this: Regardless how good our trading system is, an improper use and a lack of money management still ultimately lead to a disaster. We need to manage our money and risk well since there's no such thing as certainty in FX market.

Happy trading.
Cmellon
 

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This blog is dedicated to the market enthusiasts who have the passion to learn and understand the forex market

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All the information in this blog is only for informational and educational purposes only, and should not be taken as an offer to buy or sell anything. The author does not accept any responsibility for any loss incurred as a result of using the information in this blog

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