i.Support & Resistance -the psychology -How to estimate the potential importance of Support & Resistance ii. Trading with the trends -Bullish and Bearish Trends -Primary, secondary and Minor trend iii. Fibonacci retracement iv. “Lines” may substitute for secondary-Dow Theory

1. The Basic of Technical Analysis
103

2. Disclaimer
All content of this presentation is intended for educational purpose only and
should not be construed as any financial or investment advice.
Any transaction involving currencies involves risks including, but not limited to,
the potential for changing political and or economic condition that may
substantially affect the price or liquidity of a currency.
In short, trading can be challenging and might not suitable for everyone. Before
deciding to participate in the markets, you should carefully consider your
investment objectives, level of experience, risk appetite and take full
responsibility for your trade decisions.

4. Support & Resistance
Support
 A price level or zone
 Actual or potential demand
 Sufficient in volume to hold a downtrend temporarily at least, and
possibly reverse it.
Resistance
 A price level or zone
 Actual or potential Supply
 Sufficient in volume to satisfy all bids and hence stop prices from
going higher for a time or for temporary at least, and possibly
reverse it.
*Zone-concentration of Demand/Supply

5. Support & Resistance
 The basic for such predictions-A great volume
of transactions takes place at the level/zone in
the past.
 These critical Price levels constantly switch their
roles from Support to Resistance & vice versa.

6. Support & Resistance

7. How to estimate the potential
importance of Support & Resistance
 Single, sharp high –volume candle offer more S/R
than series of candles (like rectangle, descending
triangle etc)
 The extent of the subsequent decline
 Time Elapsed

8. Charles Dow Developed A
Series Of Principles For
Understanding And
Analyzing Market Behavior
Known As Dow Theory. This
Theory Is The Foundation
Of The Study Of Technical
Analysis.

9. Trading with the Trend
 A trend is your friend.
 A trend is assumed to continue until it gives signal to reverse or Until
a Clear Reversal Occurs-Dow Theory.
 Prices move in series of waves.
 Markets can do one of there things: go up, go down or move
sideways.
Up Down Ranging/Sideways

10. Trading with the Trend
 Bull Trend
 A series of successive higher highs and higher lows.

11. Trading with the Trend
 Bear Trend
 A series of successive Lower highs and lower lows.

12. Trading with the Trend
 Bull Trend : Start and End
 The Start of an uptrend is signaled when price makes a higher low followed
by a rally above the previous high.
 The end is signaled by lower high, followed by a decline below the previous
low.

13. Trading with the Trend
 Bear Trend : Start and End
 A bear trend starts at the end of a bull trend.
 The Start is signaled when price makes a lower high and retreats below the
previous low.
 The end of a bear trend is identical to the start of a bull trend.

14.  Market has 3 trends: Primary, Secondary &
minor-Dow Theory
 Primary Trend are price movement that extensive
up or down which usually last for a year or move.
 Secondary Trend is like market correction.
Interrupted the primary trend in opposite
direction.

15.  Finally, there are minor trends lasting less than a
month, which are largely noise.

17.  Often
trends/patterns
are small parts of
larger patterns
that can be seen
only on a longer
scale.

18. Questions

19. https://steemit.com/trading/@herronryan/fibonacci-magic-the-power-of-the-universe

20. Fibonacci
 Leonardo Pisano introduced a series of numbers that later
became a subject of interest, debate and research for the next
hundreds of years.
 This series was found to be applicable in many natural
phenomena.
 When a currency pair reverses trend, forex traders naturally want
to know how far the pair is most likely to move in its new
direction.
https://steemit.com/trading/@herronryan/fibonacci-magic-the-power-of-the-universe

22. Fibonacci Retracement
 Fibonacci analysis is the study of identifying potential
S&R levels. They are based on Fibonacci numbers.
 Fibonacci retracement levels connect any two points
that the trader views as relevant, typically a high point
and a low point.
 Certain Fibonacci ratios are useful when you are trying
to determine how far a currency pair is going to retrace,
or move against, a previous trend.

23. Fibonacci Retracement
Popular retracement levels:
 38.2%
This level is found by dividing a number in the Fibonacci
sequence by the second number following it in the sequence
(example 34 ÷ 89 = 38.2%).
 61.8%
This level is found by dividing a number in the Fibonacci
sequence by the number immediately following it in the
sequence
(example:55 ÷ 89 = 61.8%).

24. Fibonacci Retracement
 50%
This level is determined by finding the middle between
61.8 percent and 38.2 percent.
((61.8% + 38.2%) ÷ 2 = 50%).
 Only use Fibonacci retracement when you see a major
trend.

26.  “Lines” may substitute for secondary-Dow Theory.
 It can fall short to meet the requirement of “approximate one-
third retracement”.
 The correction qualifies more on the basis of time than
magnitude.
 At least one-third of the time taken to achieve the previous
advance or decline.

28. Key Takeaways
 4 Influences on Prices:
Psychological, TA, economics, Monetary policy
 TA is a depiction of the actions of investors driven by
anticipation of fundamental & psychological facts.
 These are only rough guidelines, and in the final analysis it
is a judgement call based on S&R, momentum, volume,
experience & etc (confirmation).

29. Key Takeaways
 Our purpose in TA is to identify junctures in the market
where the odds favor to our assumption.
 And to do this, we must be able to believe in the
patterns we are seeing, and in order to believe, we must
understand the factors that lead to the formation.

30. THANK YOU