I personally think that the old school of technical analysis is unproductive in today Forex markets.
The only thing that remains valid is the trendiness. The markets looks similar but it isn't.
In order to use the power of the trend a mechanical and algorithmic system is necessary. It is necessary to have mechanical signals for a trend following strategy. And those signals need to be back tested.
This is not new and a lot of systems work on that basis. What is difficult is to be in the trend and to spot a trend as early as possible.
A recent idea is to use the fractal dimension as a market sentiment indicator. Classically it is used the ADX. But the ADX gives us just a measure of the actual state of the market. It does not see the future in the forex market or whatever market.
The fractal dimension indicators give us probabilities and how they change. This approach is new in the domain of the market following methodology. And we have to use it at its full extent.
We have an experimental system that tries to do that. You can download it from this blog:
http://microhedgefund.blogspot.com/
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