Candlestick charts are a technical tool that packs data for multiple time frames into single price bands. This makes them more useful than traditional high-opening, low-closing bars or simple lines that connect closing price points. Candlesticks build models that predict the direction of the price once they are completed. Proper color coding adds depth to this colorful technical tool that dates back to Japanese rice merchants of the 18th century.
The channel is a powerful but often overlooked chart model and combines several forms of technical analysis to provide traders with potential entry and exit points as well as risk control. The first step is to learn how to identify the channels. The next steps include determining where and when to enter a trade, where to place stop-loss orders, and where to pick up winnings.
Price model of a cup and handle in the price chart of a security is a technical indicator that resembles a cup with a handle, where the cup is in the shape of “u” and the handle has a slight downward deflection. The cup and handle are considered a bullish signal, with the right side of the model usually having a lower trading volume. Model formation can be as short as seven weeks or up to 65 weeks.
The rate of change of the price (ROC) is a technical indicator based on momentum, which measures the percentage change in the price between the current price and the price before a certain number of periods. The ROC indicator is plotted relative to zero, with the indicator moving up in positive territory if price changes are up, and moving in negative territory if price changes are downward.
This tutorial on MetaTrader 4 will give you a quick and easy overview of everything you need to know to set up MetaTrader 4, how to trade MT4 and much more. Through step-by-step tutorials and the use of screenshots and detailed explanations, this review of MetaTrader 4 will help traders master the MT4 platform.
Every foreign exchange trader will use the Fibonacci retracement at some point in their trading career. Some will use it only occasionally, while others will use it regularly. But no matter how often you use this tool, the most important thing is to use it correctly every time.
Improper application of technical analysis methods will lead to disastrous results, such as poor entry points and growing losses on currency positions. Here we will look at how not to apply the Fibonacci retracement to the foreign exchange markets. Be aware of these common mistakes and you are likely to avoid making them – and enduring the consequences – in your trade.
Although prices may seem random, they do create recurring patterns and trends. One of the most basic repetitive patterns is the fractal. Fractals are simple five-bar reversal patterns. This article will explain fractals and how you can apply them to your trading strategy.
Fibonacci analysis can improve currency performance for both short-term and long-term positions by identifying key price levels that show hidden support and resistance. Fibonacci, used in conjunction with other forms of technical analysis, builds a powerful foundation for strategies that perform well in all types of market conditions and volatility levels.
In most trading books, MACD divergence is discussed and is often cited as a reason for reversing the trend or why the trend may reverse. Given the divergence, it looks great; many examples can be found in which reversal is preceded by MACD mismatch.
In most trading books, MACD divergence is discussed and is often cited as a reason for reversing the trend or why the trend may reverse. Given the divergence, it looks great; many examples can be found in which reversal is preceded by MACD mismatch.
