Chat

Forex Technical Analysis




Technical Analysis



forex-introduction-banner









 
 
 







Market have four stages,
No trading system suits all
Technical-1




Chart Type Point & Figure Line Company Bar (OHLC) Candlestick
Overlay Moving Average Bollinger Band Linear Regression
Indicators Volume MACD Momentum Stochastic RSI OBV DMI CCI Williams %R Ultimate Oscillatir
Formations Bullish or Bearish Bullish Bearish
Chart Type

Point & Figure
Line
Bar (OHLC)
Candlestick
Overlay

Moving Average
Bollinger Band
Linear Regression
Indicators

Volume
MACD
Momentum
Stochastic
RSI OBV DMI CCI
Williams %R
Ultimate Oscillatir
Formations

Bullish or Bearish
Bullish
Bearish
Shows average value of security's price over time
Defines price range
Finds best estimate of trend (line) from noisysample of points
Provides powerful clues to price behavior
Depicts +ve, or -ve trends, or reversals
Rate of change in price
Measures security's price within its range
Compares a security's price to itself
Shows gravitation towards mean
Points out buying and selling pressures.
Trend following
Market entry
Combines 3 oscillators (short 7, intermediate 14 and long 28)
: Gaps (Breakaway Runaway Exhaustion Common), Island Reversal, Flags & Pennants, Spike, Symmetrical Triangles, Wedges ( Rising Declining), Trend Channel
Ascending Triangles, V Bottoms, Double Bottoms, Inverse Head & Shoulders, Support Lines, Rounded Bottoms
Descending Triangles, Double Tops, Head & Shoulder, Rounded Tops, Resistance Lines, V Tops







Support and resistance are the line drawn to identify & follow price trends
Interpretations:
1- Support line is area buying overtakes selling and market reacts higher
2- Resistance line is area selling overtakes buying and market reacts lower
3- Inclining trend line is a straight line drawn to define an up-trend
4- Declining trend line is a straight line drawn to define a down-trend
Technical-2







 

1- Shows overall trend
2- Helps identify technical formations
3- Offers information on one price typically closing
4- Offers little and simple information
5- Appropriate for beginners
Technical-3



 

1- Shows overall trend
2- Helps identify technical formations
3- - Offers information on open, high, low and close
4- offers today's sophisticated traders sufficient information


OHLC is short for

“O” Open for the day
“H” High for the day
“L” Low for the day
“C” Close for the day
Technical-4
Opening & closing prices compared to each other and within range
Technical-5
 

Candlestick charts show stock;s high, low, opening and closing prices
Technical-3







Bollinger bands are the lines drawn above & below moving average defining price range.

Bands widen during increased volatility and narrow during decreased volatility and are standard deviation multiplied by a given factor above/below simple MA

Interpretations:
 

1- Indicate if price is high or low
2- Two standard deviations (20 Day 2 SD) from SMA
3- Sharp moves tend to occur after bands tighten to MA
Technical-2







MACD is the difference between fast & slow EMA (Exponential Moving Average). Trending, not Ranging Indicator

Interpretations:
1- Buy (sell) when MACD (Moving Average Convergence -Divergence) rises above (falls below) the zero “X” axis
2- Aggressive buy (sell) when MACD crosses signal from below (above)
3- Possible reversal if MACD making new highs/lows, price not making new highs/lows
Technical-2







RSI compares security's price to itself, it is the difference between average of closing price on up days vs. down days
- RSI= 100-{100 / 1+(U/D)}
Interpretations:

1- Buy (sell) signals triggered when RSI dips (rises) below 20 (above 80)
2- Look for chart formations in RSI itself (“W”, Head & Shoulder)
3- Bullish if crosses above 50, bearish if crosses below 50
Technical-9
RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Whilst leverage enables traders to magnify their profits on successful trades, it is possible to sustain significant losses,around 78% of retail investor accounts lose money when trading CFDs.