Support and resistance levels are price points where buyers and sellers interact in the market, creating floors and ceilings for prices to bounce between. When support levels break, it signals a change in trend from up to down, and vice versa for resistance levels. These levels are remembered by the market, often acting as important reference points even when they are in the distant past. Technical analysis uses patterns like double tops/bottoms and head and shoulders formations to identify potential support and resistance breaks.
Candlestick charts have been used by Japanese traders since the 1700s but only gained popularity in the Western world in the last 20-30 years. Candlestick charts present the same price data as bar charts but in a way that provides additional visual clues about market psychology and momentum. The document discusses the construction of candlestick charts and different candlestick patterns such as hammers, shooting stars, and doji that can indicate reversals or continuations in trends. It also provides examples of these patterns in currency markets and recommendations for effectively incorporating candlestick analysis into trading strategies.
Lesson BTF107. Single Candlestick Patterns for Binary TradingOrlando G
This document is a lesson from BinaryTradingFinance.com on single candlestick patterns, which provide information about price movement and whether a move is continuing or reversing. It defines and provides examples of continuation/reversal patterns like the Doji (indecision), Pin bar (exhaustion), Hammer/Hanging Man (rejection), and Inverted Hammer/Shooting Star (rejection). Real stock examples are given to illustrate each pattern at key support/resistance levels and how they can be used to time trades that follow or reverse the trend.
Lesson BTF116. Binary Options Trading Strategy Orlando G
We have come a long way in this first video lesson series, we have learned all the basic concepts in technical analysis, starting from the information behind candlesticks to chart patterns and breakout and bounce trading.
1) Japanese candlestick patterns provide a visual way to analyze financial markets and identify reversals and changes in market sentiment.
2) Key single candlestick patterns include Doji (indecision), Hammer and Hanging Man (bullish and bearish reversals), and Shooting Star (bearish reversal).
3) Two candlestick patterns like Engulfing, Harami, Piercing Line, and Dark Cloud Cover also signal potential trend reversals.
Understanding Candlestick Charting To Assess Prevailing Market ForcesGlobal Trading Tools
The document introduces candlestick charting as a visual way to analyze market forces from high, low, open and close prices over a period. It explains that candlesticks highlight price movements between open and close more clearly than bar charts. The key aspects of candlesticks - body color, size, shadows, and range - are described and how they can indicate buyer or seller control and commitment. Examples are provided to illustrate candlestick patterns and their interpretation in context of prior candles and market structure.
Summary:
- Technical analysis doesn’t need to be complicated
- Methods like Gann theory and Elliot Waves are farcical
- Using common sense and logic, the typical retail investor can develop profitable strategies
- Understanding which levels are important, and the trends and momentum that is driving them is the key to success
- This class will benefit any style
- This class will teach you how to use the tools that will make you successful
Summary:
- Momentum is a measurement of how much a stock has moved in a given period of time
- Stocks that are oversold tend to rally. Stocks that are overbought tend to sell-off
- There are many ways to measure momentum
- There is no proof that complex momentum indicators give better signals than simple ones
- Momentum oscillators and indicators can be optimized for a particular stock or market. Try to use settings other than the defaults. Profits will follow
- Combining indicators with different timeframes can give low-risk signals for profitable trades
Technical analysis is the attempt to forecast stock prices based on historical market data such as price, volume, and other indicators. Technicians look for trends and patterns that may signal future price movements. Strict chartists do not consider fundamentals. The document outlines various technical analysis tools like moving averages, chart patterns, indicators, and theories such as Dow Theory that technicians use to predict markets.
Candlestick charts have been used by Japanese traders since the 1700s but only gained popularity in the Western world in the last 20-30 years. Candlestick charts present the same price data as bar charts but in a way that provides additional visual clues about market psychology and momentum. The document discusses the construction of candlestick charts and different candlestick patterns such as hammers, shooting stars, and doji that can indicate reversals or continuations in trends. It also provides examples of these patterns in currency markets and recommendations for effectively incorporating candlestick analysis into trading strategies.
Lesson BTF107. Single Candlestick Patterns for Binary TradingOrlando G
This document is a lesson from BinaryTradingFinance.com on single candlestick patterns, which provide information about price movement and whether a move is continuing or reversing. It defines and provides examples of continuation/reversal patterns like the Doji (indecision), Pin bar (exhaustion), Hammer/Hanging Man (rejection), and Inverted Hammer/Shooting Star (rejection). Real stock examples are given to illustrate each pattern at key support/resistance levels and how they can be used to time trades that follow or reverse the trend.
Lesson BTF116. Binary Options Trading Strategy Orlando G
We have come a long way in this first video lesson series, we have learned all the basic concepts in technical analysis, starting from the information behind candlesticks to chart patterns and breakout and bounce trading.
1) Japanese candlestick patterns provide a visual way to analyze financial markets and identify reversals and changes in market sentiment.
2) Key single candlestick patterns include Doji (indecision), Hammer and Hanging Man (bullish and bearish reversals), and Shooting Star (bearish reversal).
3) Two candlestick patterns like Engulfing, Harami, Piercing Line, and Dark Cloud Cover also signal potential trend reversals.
Understanding Candlestick Charting To Assess Prevailing Market ForcesGlobal Trading Tools
The document introduces candlestick charting as a visual way to analyze market forces from high, low, open and close prices over a period. It explains that candlesticks highlight price movements between open and close more clearly than bar charts. The key aspects of candlesticks - body color, size, shadows, and range - are described and how they can indicate buyer or seller control and commitment. Examples are provided to illustrate candlestick patterns and their interpretation in context of prior candles and market structure.
Summary:
- Technical analysis doesn’t need to be complicated
- Methods like Gann theory and Elliot Waves are farcical
- Using common sense and logic, the typical retail investor can develop profitable strategies
- Understanding which levels are important, and the trends and momentum that is driving them is the key to success
- This class will benefit any style
- This class will teach you how to use the tools that will make you successful
Summary:
- Momentum is a measurement of how much a stock has moved in a given period of time
- Stocks that are oversold tend to rally. Stocks that are overbought tend to sell-off
- There are many ways to measure momentum
- There is no proof that complex momentum indicators give better signals than simple ones
- Momentum oscillators and indicators can be optimized for a particular stock or market. Try to use settings other than the defaults. Profits will follow
- Combining indicators with different timeframes can give low-risk signals for profitable trades
Technical analysis is the attempt to forecast stock prices based on historical market data such as price, volume, and other indicators. Technicians look for trends and patterns that may signal future price movements. Strict chartists do not consider fundamentals. The document outlines various technical analysis tools like moving averages, chart patterns, indicators, and theories such as Dow Theory that technicians use to predict markets.
Certain price levels, known as support and resistance levels, are more important to the market than others. Support levels indicate large concentrations of buyers willing to purchase at a given price, halting market declines. Resistance levels represent large groups of sellers waiting to sell at a specific price, pausing market rallies. Prior support and resistance levels often retain significance and can reverse roles - with resistance transforming into new support as sellers experience remorse, and support shifting to resistance when buyers feel regret. Identifying these pivotal price points helps traders understand market behavior and find high-probability entry and exit points.
Summary:
- All chart patterns need to be viewed in the context of the supply and demand dynamics that they illustrate
- If you understand the fundamentals, you don’t need to memorize the patterns
- Some classic patterns have validity. Most don’t
- Understanding chart patterns will give you low-risk entry points and logical sell targets
This document provides a summary of technical analysis techniques used to forecast stock prices based on historical market data. It discusses several theories and approaches including Dow Theory, Elliot Wave Principle, charting techniques like bar charts and candlestick charts, point and figure charts, common chart patterns, and popular technical indicators like MACD, RSI, OBV, and Bollinger Bands. The goal of technical analysis is to identify trends and patterns that may signal future price movements.
This document provides an overview of various technical analysis chart patterns and theories, including:
1) The head and shoulders pattern which can be bullish or bearish, with variations that impact the probability of a successful formation.
2) Other patterns like M, W, triangles, and flags/pennants which are continuation patterns formed by sharp price movements followed by sideways consolidation.
3) Dow theory which defines trends as successively higher/lower peaks and troughs, with reversals occurring when highs/lows are broken.
4) Elliot wave theory which contends social trends can be seen in financial markets through recurring patterns of impulsive and corrective waves.
Technical analysis uses past stock and security price data and trading volume to identify patterns and trends in prices. These patterns can be used to predict future price movements and identify good entry and exit points to buy and sell securities. Technical analysts study charts of price movements and indicators like moving averages and oscillators to identify trends, support and resistance levels, and signals that a trend may be reversing. The goal is to profit from short-term trading based on these technical studies rather than fundamental analysis of the security.
This document provides an overview of a presentation on disciplined trading using options strategies. It discusses who the presenters are, defines disciplined trading, provides an example of an iron condor trade on the S&P 500 index, and demonstrates how to calculate the expectancy of the strategy based on past performance. The main points are that disciplined trading involves predefining risk, cutting losses, and using systematic money management, and that trading options non-directionally through strategies like iron condors can provide leverage and positive expectancy.
This document provides an overview of a presentation on disciplined trading using options strategies. It discusses who the presenters are, defines disciplined trading, provides an example of an iron condor trade on the S&P 500 index, and demonstrates how to calculate the expectancy of the strategy based on past performance. The main points are that disciplined trading involves predefining risk, cutting losses, and using systematic money management, and that trading options non-directionally through strategies like iron condors can provide leverage and positive expectancy.
Click here for more information on range trading
http://www.netpicks.com/simple-range-trading-strategy/
Here is some information on range trading:
It’s been said that a market only trends 30% of the time.
I can’t quantify that figure but having a range trading strategy to take advantage of the other 70% is good business.
Range trading is not difficult however it does require discipline and a method of determining when a trading range is in play.
For more information on range trading click here:
http://www.netpicks.com/simple-range-trading-strategy/
This document provides an overview of a presentation on disciplined trading using options strategies. It discusses who the presenters are, defines disciplined trading, provides an example of an iron condor trade on the S&P 500 index, and outlines the benefits of trading options over stocks. Key points include that disciplined traders predefine risk, cut losses quickly, and use consistent money management. The iron condor strategy aims for an 8% return over 3 weeks by selling options above and below a perceived trading range. Historical track records show positive expectancy from following this non-directional strategy.
1) The document analyzes the stock Exxon Mobil (XOM) using Wyckoff analysis and point and figure charting. It identifies distribution and accumulation patterns in XOM and gold ETFs over several months.
2) Key Wyckoff points like buying climax, automatic reaction, and sign of weakness are identified on vertical charts of XOM and gold ETFs and related to counts on point and figure charts to determine price objectives.
3) The analysis finds XOM to be in a distribution pattern weaker than the market while gold ETFs show accumulation, with estimated reward-to-risk ratios above 3 times for potential trades.
This document provides an overview of a presentation on disciplined trading using equity options. It discusses who the presenters are, defines disciplined trading, provides an example of a practice disciplined trade using an iron condor strategy on the S&P 500 index, and lists videos for the week. Key points covered include predefining risk before trades, cutting losses without hesitation, and using a systematic money management plan. The document also contains several disclaimers about the presenters and content.
The document provides an overview of the basics of currency trading, including key characteristics of successful traders, habits that lead to mastery, and the scale of the forex market. It also summarizes technical analysis techniques like reading candlestick patterns to identify trends and turning points, using major corporations' currency transactions as an example. Key points covered are determining the overall and daily trends, using big players' Fibonacci target levels, and practicing these skills through paper trading to gain experience.
This document provides information about trading gold against the US dollar (XAUUSD) on the forex market. It covers how to set up a forex trading account and fund it, identifies the XAUUSD currency pair for trading gold, and provides tips for trading including understanding candlestick patterns and analyzing gold news and price charts. The document is intended to educate traders on the basics of trading gold without physical possession by using the forex market.
This document provides an introduction to binary options trading strategies. It discusses 10 top strategies, including the Double Red strategy, Pinocchio strategy, and 1-2-3 strategy. It also covers basics of binary options like risk/reward, expiry times, and best times to trade. Brokers are recommended and compared in terms of minimum deposits, payouts, regulation status and bonuses offered. Candlestick charts and other technical analysis tools are presented as aids for traders.
Lesson BTF110. Chart Patterns for Binary TradingOrlando G
On this lesson we will go through the most basic patterns you can find on your charts and with time and practice you will be able to spot them with the naked eye.
This document provides an agenda for a meetup on disciplined trading. It includes an introduction to who the presenters are, what disciplined trading means, a practice non-directional options trade, and content for the upcoming week. Disclaimers are provided stating that the presenters are not registered advisors and are not providing personalized recommendations. The document also includes slides on equity options, non-directional trading strategies, and a review of market volatility.
This document provides an introduction to technical analysis tools and techniques. It begins by explaining different types of stock price charts, including line charts, bar charts, and candlestick charts. It then discusses moving averages and how they can be used to identify trends. Support and resistance levels are explained as important trend lines. The document also covers envelopes, Bollinger Bands, and Parabolic SAR as additional technical indicators. It emphasizes that these tools should be used together to analyze trends and identify entry and exit points for trades.
How To Trade Regular Divergence with MACD, RSI, StochasticsNetpicksTrading
Divergence trading involves identifying potential market turning points by looking for instances where a price moves in one direction while a technical indicator moves in the opposite direction. There are two main types of divergence - bullish divergence, where the price is falling but an indicator like MACD or RSI is rising, and bearish divergence, where the price is rising but the indicator is falling. Traders look for divergence patterns at potential support/resistance levels and use confirmation signals like candlestick patterns to identify trade entry points, with the goal of capitalizing on reversals in price triggered by changes in market momentum.
Technical analysis is the attempt to forecast stock prices based on historical market data like price, volume, and other indicators. Chartists look for trends and patterns in charts that may signal future price movements. While perfect market timing could provide high returns, it is difficult to achieve consistently. Technical analysts use various chart types and indicators to analyze market trends and generate buy/sell signals, but there is no consensus on any single method and past performance is not a guarantee of future results.
The Dow Theory originated with Charles Dow and analyzes stock market movements on three levels - daily fluctuations, secondary trends lasting weeks to months, and primary trends spanning multiple years. These trends are compared to ripples, waves, and tides respectively. The theory holds that markets discount all information and move through bull and bear cycles shown by peaks and troughs in the primary trend. Support and resistance levels also factor in where demand or supply prevents further price changes. However, the Dow Theory is not infallible and is based on historical interpretation of data rather than a scientific theory.
Certain price levels, known as support and resistance levels, are more important to the market than others. Support levels indicate large concentrations of buyers willing to purchase at a given price, halting market declines. Resistance levels represent large groups of sellers waiting to sell at a specific price, pausing market rallies. Prior support and resistance levels often retain significance and can reverse roles - with resistance transforming into new support as sellers experience remorse, and support shifting to resistance when buyers feel regret. Identifying these pivotal price points helps traders understand market behavior and find high-probability entry and exit points.
Summary:
- All chart patterns need to be viewed in the context of the supply and demand dynamics that they illustrate
- If you understand the fundamentals, you don’t need to memorize the patterns
- Some classic patterns have validity. Most don’t
- Understanding chart patterns will give you low-risk entry points and logical sell targets
This document provides a summary of technical analysis techniques used to forecast stock prices based on historical market data. It discusses several theories and approaches including Dow Theory, Elliot Wave Principle, charting techniques like bar charts and candlestick charts, point and figure charts, common chart patterns, and popular technical indicators like MACD, RSI, OBV, and Bollinger Bands. The goal of technical analysis is to identify trends and patterns that may signal future price movements.
This document provides an overview of various technical analysis chart patterns and theories, including:
1) The head and shoulders pattern which can be bullish or bearish, with variations that impact the probability of a successful formation.
2) Other patterns like M, W, triangles, and flags/pennants which are continuation patterns formed by sharp price movements followed by sideways consolidation.
3) Dow theory which defines trends as successively higher/lower peaks and troughs, with reversals occurring when highs/lows are broken.
4) Elliot wave theory which contends social trends can be seen in financial markets through recurring patterns of impulsive and corrective waves.
Technical analysis uses past stock and security price data and trading volume to identify patterns and trends in prices. These patterns can be used to predict future price movements and identify good entry and exit points to buy and sell securities. Technical analysts study charts of price movements and indicators like moving averages and oscillators to identify trends, support and resistance levels, and signals that a trend may be reversing. The goal is to profit from short-term trading based on these technical studies rather than fundamental analysis of the security.
This document provides an overview of a presentation on disciplined trading using options strategies. It discusses who the presenters are, defines disciplined trading, provides an example of an iron condor trade on the S&P 500 index, and demonstrates how to calculate the expectancy of the strategy based on past performance. The main points are that disciplined trading involves predefining risk, cutting losses, and using systematic money management, and that trading options non-directionally through strategies like iron condors can provide leverage and positive expectancy.
This document provides an overview of a presentation on disciplined trading using options strategies. It discusses who the presenters are, defines disciplined trading, provides an example of an iron condor trade on the S&P 500 index, and demonstrates how to calculate the expectancy of the strategy based on past performance. The main points are that disciplined trading involves predefining risk, cutting losses, and using systematic money management, and that trading options non-directionally through strategies like iron condors can provide leverage and positive expectancy.
Click here for more information on range trading
http://www.netpicks.com/simple-range-trading-strategy/
Here is some information on range trading:
It’s been said that a market only trends 30% of the time.
I can’t quantify that figure but having a range trading strategy to take advantage of the other 70% is good business.
Range trading is not difficult however it does require discipline and a method of determining when a trading range is in play.
For more information on range trading click here:
http://www.netpicks.com/simple-range-trading-strategy/
This document provides an overview of a presentation on disciplined trading using options strategies. It discusses who the presenters are, defines disciplined trading, provides an example of an iron condor trade on the S&P 500 index, and outlines the benefits of trading options over stocks. Key points include that disciplined traders predefine risk, cut losses quickly, and use consistent money management. The iron condor strategy aims for an 8% return over 3 weeks by selling options above and below a perceived trading range. Historical track records show positive expectancy from following this non-directional strategy.
1) The document analyzes the stock Exxon Mobil (XOM) using Wyckoff analysis and point and figure charting. It identifies distribution and accumulation patterns in XOM and gold ETFs over several months.
2) Key Wyckoff points like buying climax, automatic reaction, and sign of weakness are identified on vertical charts of XOM and gold ETFs and related to counts on point and figure charts to determine price objectives.
3) The analysis finds XOM to be in a distribution pattern weaker than the market while gold ETFs show accumulation, with estimated reward-to-risk ratios above 3 times for potential trades.
This document provides an overview of a presentation on disciplined trading using equity options. It discusses who the presenters are, defines disciplined trading, provides an example of a practice disciplined trade using an iron condor strategy on the S&P 500 index, and lists videos for the week. Key points covered include predefining risk before trades, cutting losses without hesitation, and using a systematic money management plan. The document also contains several disclaimers about the presenters and content.
The document provides an overview of the basics of currency trading, including key characteristics of successful traders, habits that lead to mastery, and the scale of the forex market. It also summarizes technical analysis techniques like reading candlestick patterns to identify trends and turning points, using major corporations' currency transactions as an example. Key points covered are determining the overall and daily trends, using big players' Fibonacci target levels, and practicing these skills through paper trading to gain experience.
This document provides information about trading gold against the US dollar (XAUUSD) on the forex market. It covers how to set up a forex trading account and fund it, identifies the XAUUSD currency pair for trading gold, and provides tips for trading including understanding candlestick patterns and analyzing gold news and price charts. The document is intended to educate traders on the basics of trading gold without physical possession by using the forex market.
This document provides an introduction to binary options trading strategies. It discusses 10 top strategies, including the Double Red strategy, Pinocchio strategy, and 1-2-3 strategy. It also covers basics of binary options like risk/reward, expiry times, and best times to trade. Brokers are recommended and compared in terms of minimum deposits, payouts, regulation status and bonuses offered. Candlestick charts and other technical analysis tools are presented as aids for traders.
Lesson BTF110. Chart Patterns for Binary TradingOrlando G
On this lesson we will go through the most basic patterns you can find on your charts and with time and practice you will be able to spot them with the naked eye.
This document provides an agenda for a meetup on disciplined trading. It includes an introduction to who the presenters are, what disciplined trading means, a practice non-directional options trade, and content for the upcoming week. Disclaimers are provided stating that the presenters are not registered advisors and are not providing personalized recommendations. The document also includes slides on equity options, non-directional trading strategies, and a review of market volatility.
This document provides an introduction to technical analysis tools and techniques. It begins by explaining different types of stock price charts, including line charts, bar charts, and candlestick charts. It then discusses moving averages and how they can be used to identify trends. Support and resistance levels are explained as important trend lines. The document also covers envelopes, Bollinger Bands, and Parabolic SAR as additional technical indicators. It emphasizes that these tools should be used together to analyze trends and identify entry and exit points for trades.
How To Trade Regular Divergence with MACD, RSI, StochasticsNetpicksTrading
Divergence trading involves identifying potential market turning points by looking for instances where a price moves in one direction while a technical indicator moves in the opposite direction. There are two main types of divergence - bullish divergence, where the price is falling but an indicator like MACD or RSI is rising, and bearish divergence, where the price is rising but the indicator is falling. Traders look for divergence patterns at potential support/resistance levels and use confirmation signals like candlestick patterns to identify trade entry points, with the goal of capitalizing on reversals in price triggered by changes in market momentum.
Technical analysis is the attempt to forecast stock prices based on historical market data like price, volume, and other indicators. Chartists look for trends and patterns in charts that may signal future price movements. While perfect market timing could provide high returns, it is difficult to achieve consistently. Technical analysts use various chart types and indicators to analyze market trends and generate buy/sell signals, but there is no consensus on any single method and past performance is not a guarantee of future results.
The Dow Theory originated with Charles Dow and analyzes stock market movements on three levels - daily fluctuations, secondary trends lasting weeks to months, and primary trends spanning multiple years. These trends are compared to ripples, waves, and tides respectively. The theory holds that markets discount all information and move through bull and bear cycles shown by peaks and troughs in the primary trend. Support and resistance levels also factor in where demand or supply prevents further price changes. However, the Dow Theory is not infallible and is based on historical interpretation of data rather than a scientific theory.
Technical analysis uses statistical data from market activity, past prices and trading volumes to identify patterns and indicators that can predict a security's future performance. Hundreds of techniques exist, including chart patterns like bar charts, candlestick charts and point and figure charts that consolidate supply and demand forces into a visual representation. Technicians believe prices move in predictable trends and patterns until a change causes the trend to reverse, and chart analysis helps identify support and resistance price levels as well as common patterns like double tops/bottoms and head and shoulders formations that can signal trend reversals.
Technical analysis is the attempt to forecast stock prices based on historical market data like price, volume, and other indicators. Technicians look for trends and patterns in this data that may indicate future price movements. They use various charts like bar charts and candlestick charts to analyze this data and look for patterns. Technical analysts do not consider fundamental factors like financial statements. The goal is to predict short-term price movements through analysis of historical price patterns and indicators.
This document provides an introduction to technical analysis for investors. It outlines several key techniques of technical analysis including price charts, candlestick patterns, trend lines, support and resistance, moving averages, and chart patterns. Price charts visually represent stock price data and can take the form of line charts, bar charts, or candlestick charts. Candlestick patterns provide insight into market sentiment. Trend lines identify uptrends and downtrends while support and resistance levels indicate where buyers and sellers enter the market. Moving averages smooth price data to identify trends. Finally, chart patterns like triangles, flags, double tops, and head and shoulders formations signal potential reversals or continuations in price. Technical analysis tools help gauge the probability of future price
This eBook by Jim Wyckoff provides traders with visual clues to help spot trends and reversals on charts. It discusses 10 chart patterns including:
1. The venerable trend line - Drawing trend lines along price highs and lows to identify trends. Breaking trend lines signals potential trend changes.
2. Support/resistance - Looking at past price history to identify common support and resistance levels, including zones, major tops/bottoms, and gaps. How the market reacts at these levels is important.
3. Retracements - Looking at "retracements" or counter-trend price moves within an existing trend to identify potential support or resistance areas where a correction may end and
Technical analysis focuses on the price movements, trends, and volume of securities rather than their intrinsic value, using historical data and patterns to identify entry and exit points. Common techniques include analyzing charts like candlestick patterns, identifying support and resistance levels, determining upward and downward trends, and using indicators like moving averages, MACD, and stochastic oscillators to identify overbought and oversold conditions. The goal is to predict future price movements based on the collective actions of investors driving supply and demand.
Technical analysis is the attempt to forecast stock prices based on historical market data like price, volume, and other indicators. Technicians look for trends and patterns that may indicate future price movements. They use various charts like bar charts, candlestick charts, and point and figure charts to analyze this data. Key technical tools include trend lines, moving averages, common chart patterns like head and shoulders and triangles, and indicators like MACD, RSI, on-balance volume, and Bollinger bands. Other technical approaches include Dow theory, which analyzes trends in the Dow Jones Industrial Average and Transportation Average, and Elliot wave theory, which looks for recurring wave patterns. While technical analysis is widely used, its efficacy is debated as patterns may
The document provides an overview of technical analysis techniques used to analyze stock price movements and identify trends. It discusses concepts like trend identification, support and resistance levels, moving averages, chart patterns, candlestick patterns, and indicators like pivot points and gaps. The origin and key assumptions of technical analysis are explained. Different chart types are described, including line charts, bar charts, and candlestick charts. Common patterns like head and shoulders, triangles, and flags are also outlined.
Technical analysis uses charts and patterns to forecast stock prices based on past market data like price and volume trends. Chartists look for patterns in bar charts, candlestick charts, and point and figure charts that may indicate future price movements. Technical analysts use indicators like moving averages, MACD, RSI, and Bollinger Bands to generate buy and sell signals from these patterns and trends. Dow Theory also analyzes trends in stock market indexes to predict broader economic trends.
This document provides an overview of technical analysis and compares it to fundamental analysis. It discusses how technical analysis studies investor sentiment and emotion through the price and volume movements of securities, while fundamental analysis studies company metrics and financials. The document outlines the basic tools of technical analysis like charts and indicators and how they can be used to identify trends, support/resistance levels, and changes in investor behavior that may provide trading opportunities.
The document discusses technical analysis and its key concepts. It defines technical analysis as identifying trend reversals using indicators to analyze relationships between price, volume, and demand/supply. The assumptions of technical analysis are that the market discounts all information and moves in trends. Charting techniques discussed include Dow theory, identifying primary/secondary trends, and support/resistance levels. Technical indicators examined include moving averages, where crossing the average provides buy/sell signals. Sentiment indicators like volume and odd-lot trading are also summarized.
Axis Direct offers a introductory course on Technical Analysis. It will cover the background and basic aspects of technical analysis
For more information visit :
https://simplehai.axisdirect.in/learn/eclasses
An overview of technical analysis and its common techniques (Candlestick , MACD, Parabolic SAR, RSI, Bolinger Bands etc) - given to brokers and managers of Nepal Derivative Exchange (NDEX) by Mr. Sohan Khatri (Resource person - Management Association of Nepal, Adjunct Faculty - Ace Institute of Management, Kathmandu College of Management)
Presentation – I - NEW PERSPECTIVE ON TRADITIONAL TECHNICAL ANALYSIS PROBLEMS...Aniruddha Deshpande
The presentation provided an overview of traditional technical analysis tools and their common pitfalls. It then introduced Market Profile and Order Flow Analysis as alternative approaches. Specifically:
1) It reviewed tools like patterns, indicators, and moving averages and discussed frequent problems like false signals, unclear entry/exit levels, and curve fitting.
2) It then introduced Market Profile and described how it organizes price data and key concepts like balance vs imbalance.
3) Order Flow Analysis was also introduced, noting it analyzes buyer and seller activity levels to identify aggression and trends. Examples of both approaches were shown to illustrate how they help avoid pitfalls of traditional technical analysis.
- The document discusses technical analysis, which uses patterns in stock prices and trading volume to predict future stock performance, rather than analyzing companies' financials.
- It outlines various technical analysis techniques like charting patterns, indicators like RSI and Bollinger Bands, and identifying support and resistance levels.
- Technical analysis is believed to be one of the oldest forms of security analysis and is still widely used today, though it also faces challenges from theories like the efficient market hypothesis.
Gold is a difficult market to trade successfully. Several tips are provided, including keeping position sizes small, paying attention to cycles and turning points, checking the efficiency of indicators before using them, and being on the lookout for anomalies in the market. Volume is also an important factor to consider, and it is best to wait for confirmations like three consecutive closing prices before taking action on a breakout or breakdown. Analyzing multiple time frames and related markets can also provide useful context for trading gold.
Technical analysis is the attempt to forecast stock prices based on historical market data such as price, volume, and other indicators. Technicians look for trends and patterns that may signal future price movements. Strict chartists do not consider fundamentals. The document outlines various technical analysis tools like moving averages, chart patterns, indicators, and theories such as Dow Theory that technicians use to predict markets.
This document provides an overview of technical analysis. It defines technical analysis as attempting to forecast stock prices based on market data like price and volume over time. Technicians look for trends and patterns that may indicate future price movements. The document discusses various chart types, patterns, indicators, and theories used in technical analysis like moving averages, MACD, RSI, Dow Theory and Elliott Wave. It also notes some of the potential benefits of market timing but challenges of doing so successfully. In summary, the document introduces the key concepts and techniques of the technical analysis approach to analyzing financial markets.
Technical analysts believe stock prices follow predictable patterns that can be seen in historical price charts. However, academic research shows prices behave randomly and past prices cannot reliably predict future movements once transaction costs are considered. Many technical trading strategies do not outperform a simple buy and hold approach. While technical analysis remains popular, the evidence suggests its predictions contain no useful information.
Technical analysis uses historical market data like prices and volumes to identify trends and patterns that may forecast future price movements. The document outlines several technical analysis techniques including:
Dow Theory which looks at trends in the Dow Jones Industrial Average and Transportation Average. Elliot Wave Theory which identifies repeating cycles in market data. Charting techniques like bar charts, candlestick charts, and point and figure charts are used to visually identify patterns. Common patterns include head and shoulders, triangles, and rounded tops/bottoms. Indicators like MACD, RSI, and Bollinger Bands provide buy/sell signals. The goal of technical analysis is to predict turning points in markets based on the assumption that historical patterns repeat.
This document provides a summary of technical analysis concepts and techniques. It begins with an introduction to technical analysis and its goal of forecasting stock prices based on historical market data. Several technical analysis techniques are then outlined, including Dow Theory, Elliot Wave analysis, and different types of charts like bar charts, candlestick charts, and point and figure charts. Common chart patterns like head and shoulders and triangles are described. Key indicators like moving averages, MACD, RSI, and Bollinger Bands are explained. The document concludes with a discussion of typical stock market cycles and an acknowledgement of the many technical analysis approaches that exist.
This document provides a risk disclosure and disclaimer for trading foreign exchange. It warns that forex trading carries high risk and may not be suitable for all investors. The high leverage involved can work both for and against the trader. It advises traders to carefully consider their investment objectives, experience level, and risk tolerance before trading. There is a possibility of losing some or all of one's initial investment, so only money that can be afforded to lose should be used for forex trading. Traders should be aware of all the risks involved and seek independent financial advice. The disclaimer notes that any opinions or information discussed do not constitute investment advice and the provider does not accept liability for any resulting losses.
The document discusses strategies for automated trading, including:
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3. Examples of backtesting and evaluating the historical performance of strategies on past market data are provided, highlighting the importance of testing strategies before trading live.
The document discusses the Elliott Wave Principle for analyzing financial markets. It explains that Ralph Elliott observed that markets trend and reverse in recognizable patterns. These patterns repeat at different time scales. The document then outlines five tradable wave patterns and how combining wave analysis with techniques like trend lines and Fibonacci ratios can help identify high potential trade setups in currencies and gold. Specific trade ideas are presented from October 2017 with potential profits of over 500 pips identified. The conclusion emphasizes that wave pattern recognition coupled with other technical indicators can effectively find profitable trading opportunities.
The document discusses strategies for automated trading, including:
1. It introduces the Ignition strategy, an 8/21 moving average crossover trend following strategy, outlining its entry and exit rules.
2. It discusses the benefits of automated trading such as eliminating emotions and allowing trading around the clock, and highlights challenges like information overload that automated systems address.
3. It provides examples of two additional strategies - a Bollinger Bands strategy and RSI strategy - and shows backtested results for each on EURUSD and USDCAD respectively.
The document discusses the Elliott Wave Principle for analyzing financial markets and finding high potential trade setups. It explains that Ralph Elliott observed that markets trend and reverse in recognizable patterns. Using wave patterns, trend lines, Fibonacci ratios, and candlestick patterns can help identify turning points and entries/exits for profitable trades. The document provides examples of applying Elliott Wave analysis to EURUSD, gold, and the US Dollar Index between October 5-13, 2017 to find over 500 pips of potential profit.
This document provides a risk disclosure and disclaimer for trading foreign exchange. It warns that forex trading carries high risk and may not be suitable for all investors. The high leverage involved can work both for and against the trader. It advises traders to carefully consider their investment objectives, experience level, and risk appetite before trading. There is a possibility of losing some or all of one's initial investment, so only money that can be afforded to lose should be used for forex trading. Traders should be aware of all the risks involved and seek independent financial advice. The disclaimer notes that any opinions or information discussed do not constitute investment advice and the provider does not accept liability for any resulting losses.
Sebastian seliga trading psychology.pptxPower Point
1) The document discusses the three stages of becoming a professional trader: the beginning, becoming a trader, and trading in the zone.
2) In the beginning, traders are learning the basics, experiencing overconfidence and their first successes and losses. The biggest challenge is staying in the trading game long enough to understand market mechanisms.
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The document discusses how the Commitments of Traders (COT) report can be used to help determine when a market trend is ending and a new trend is starting. It explains that the COT report details the long and short positions of different trader types, including commercial traders, who are trend starters and enders, and non-commercial traders, who are trend followers. It describes how the positions of commercial traders in particular can provide clues about future market direction. The document illustrates how to interpret COT data through the use of indices and provides examples of how analyzing the COT report has successfully identified trend changes in currencies like the Australian dollar and commodities like gold in the past.
The document provides guidance on the keys to becoming a profitable trader. It discusses five factors that determine success: 1) mastering a trading strategy, 2) managing risk, 3) knowing your trading numbers, 4) using a structured feedback process, and 5) not relying solely on trial and error. The document provides examples of strategies, risk management plans, and metrics to track to develop mastery over these critical areas.
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Rocky yaman professional technical analysis & market readingPower Point
This document provides an overview of professional technical analysis and market reading. It discusses analyzing the market to understand present behavior and predict future changes in order to consistently profit. While 95% of traders fail due to not understanding how the market communicates, analysis can help by observing indicators and charts to determine the market's order flow, trend structure, and key levels. Specifically, it is important to analyze whether the market momentum is impulsive or corrective, and if the trend is volatile or non-volatile in order to know the best times to enter or exit the market. The document emphasizes understanding market behaviors by viewing charts as a graphical representation of how fundamental events affect prices.
The document discusses using moving average bands to identify trading opportunities in trends and counter-trends. Specifically, it outlines rules for entering long positions when price hits the lower band during an uptrend, and entering short positions when price hits the upper band during a downtrend. It also discusses using higher timeframe moving average crossovers and MACD signals to confirm trend and band signals. Waiting for price to close back inside the bands is recommended for potential counter-trend trades rather than trying to catch the bottom. Examples of both trend-following and counter-trend band strategies are provided.
This document discusses the importance of time and experience for traders to become successful and consistent. It notes that 80% of traders fail due to a lack of knowledge, patience, discipline, and experience dealing with different market conditions. The author argues that it takes most traders 5 years of experience to become profitable. He then outlines his challenge to grow a $10,000 trading account to $100,000 within 2 years through consistent, low-risk trades of 1-2 per day. He emphasizes that success requires commitment of time to develop skills and experience different market cycles rather than an emphasis on frequent trading.
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1. Using Candlestick charts with Support and
Resistance as the basis for a trading
strategy.
Part 1 – Introduction to Support and
Resistance
ShowFx World Expo – Kiev – 20th May 2017
Written and presented by Clive Lambert MSTA MCSI, Director - FuturesTechs
2. Clive Lambert
• 31 years market experience including 10 years on
LIFFE Floor
• Founding director of FuturesTechs in 2000
• Leading figure in UK Society of Technical Analysts
• - Board Member from 2004 to 2011, 2013 - present
• - Regular speaker on yearly Diploma Courses
• - Spoke at IFTA Conference on 2011
• Author of “Candlestick Charts”, published in 2009
• Appearances on CNBC, Reuters TV. Regularly
quoted on DJ Newswires, Bloomberg and Reuters
• 6 times winner at the Technical Analyst Awards
3. Agenda
• Introduction
– Technical Analysis vs other ways of looking at the market
– Definition of support and resistance
– Different traders’ interaction with a level
• Including Algorithmic and Fundamental Traders
– The markets’ memory
• Is TA self fulfilling?
• Chart patterns
– Double Tops/Bottoms
– Head and Shoulders
• Levels for Shorter term Trading
– Gaps
– Outside Days
– Pivot Points
– Yesterday’s Intra-day charts
• Different timeframe charts
– Trading around levels
• Don’t buy below resistance/sell above support
• Factoring S & R into your Reward/Risk parameters/trade management
• Summary
4. Efficient Market Hypothesis
'Random Walk Theory‘
Technical analysis – deals with the
'WHERE?’
Fundamental Analysis – deals with the
'WHY?’
'…nearly every sell side
analyst reached the same
conclusions about Enron
in 2001, right up to the
brink of its bankruptcy on
Dec. 2. As of Oct. 18, all
15 analysts tracked by
Thomson Financial/First
Call rated Enron a 'buy'-12
of the 15 called it a 'strong
buy.'
Because it’s cheap??!!!
BUY
BUY
BUY
BUY
BUY
The distribution of (Stock)
Market data doesn’t stick to a
'normal distribution', rather
we find a 'Leptokurtic'
distribution with 'Fat Tails'. In
other words,
Markets aren't
Random!
Academia’s attempt to
quantify market action,
championed by Eugene
Fama and Burton
Makeil, and widely
credited with the
collapse of LTCM
Behavioural Finance
Academia’s latest
attempt to make sense of
the markets, a kind of
'EMH' that accepts that
human decision making
processes (like emotion!)
can also have an effect
on things (herd instinct,
etc).
5. Support and Resistance
• Prices move up and down
– Price moves up because there is more demand than supply – more buyers than
sellers
– Price moves down because there is more supply than demand – more sellers
than buyers
– Tops and bottoms are formed when the balance between supply and demand
changes
6. Support and Resistance
• Support is the name given to a price at which a market
bottoms out and the buyers start to outweigh the
(previously dominant) sellers
• Resistance is the high, where the sellers turn things
around and start to outweigh the (previously dominant)
buyers
Support
Resistance
7. Support and Resistance
• To further expand on this we should think about two of the three basic
tenets of Technical Analysis
• Everything is in the price
• Market action is repetitive
• Price move in trends, and trends persist
8. Support and Resistance
• Market action is repetitive
– Old support and resistance levels are remembered, and referenced, and can
often “repeat”
– The markets have long memories, and these days we have lots of technology
(we all have access to charting systems!) to jog any dimming memories
– We shall go into further detail later as to why as we go along
• Prices move in trends, and trends persist
– Uptrend – Series of higher highs and higher lows
– Downtrend – Series of lower highs and lower lows
• If you have old highs and lows defining the trend for you, then they become
important reference points; important support and resistance levels!
9. Support and Resistance
S
S
S
R
R
R
R
Uptrend = Series of higher
highs and higher lows.
Therefore resistance levels
break , while support
levels hold
Trade uptrends by buying
dips or buying breakouts
10. Support and Resistance
S
At this time the market is still
in an uptrend, and you’d look
for a fresh test of the upside
resistance…
S
S
S
R
R
R
R
11. Support and Resistance
S
…and even now we’re still in
an uptrend, although some
doubts may be creeping in
(lower high, but no lower low
yet, so not a downtrend)
S
S
S
R
R
R
R
12. Support and Resistance
S
R
Now, because the last
support level has broken,
after a lower high has been
put in place, we are in a
downtrend. ALL CHANGE!
The support level is the
game changer!
S
S
S
R
R
R
R
13. Support and Resistance
S
S
R
R
R
Downtrend establishes further with more lower highs and lower lows.
Often old supports can do a job, so know where they are!
S
S
S
R
R
R
R
14. Support and Resistance
• So trend spotting and definition relies 100% on support and resistance
• So what creates a trend? What makes a market move up and down?
• Simple: People buying and selling (ie Everything is in the price)
• Or, more specifically: the collective mass of operators in the market place. This is
where things get tricky as far as making generalisations is concerned, because there
are lots of different types of trader operating in the market, all sorts of people buying
and selling.
15. Support and Resistance
• It is important to learn the effect that different market operators can have on
price
Short term Long Term
Scalper … Swing trader ... Prop trader … Wholesale “end” user … Sovereign Wealth Fund
Day Trader ... Position trader … Hedge Fund manager … Pension Fund Manager
This list is by no means exhaustive, and there will be different traders from different
categories who would be in a different place. For example some Hedge Fund traders are
high frequency, so would be further towards the left hand side.
As a rule of thumb the shorter term a trader is the more reliance they have on Technical
Analysis, although this is changing increasingly.
Another fairly safe generalisation is that short term traders do lots of trades in smaller
size, whereas long term traders do fewer trades in big size!
16. Support and Resistance
• The markets have a memory for old support and resistance levels; you only have to
look at a chart for the FTSE 100 to understand this.
17. Support and Resistance
• “Dow 20,000” is a good example of a “psychological” resistance troubling the market
as a whole.
• Hit 1000 in 1966. Took until 1982 to clear it properly though
• Hit 3000 in July 1990. Dropped 700 ticks in the next 3 months.
• Failed shy of 4000 in early 1994, didn’t clear this level until March
1995.
• Smashed through 5000 in November 1995. Didn’t really stop until
we got to 8300 in August 1997.
• Hit 10,000 in March 1999. Was still there in April 2005, having
been to 11750 then 7200…
• Broke above 15000 in March 2013 but not cleanly…
• 15000 was defended ardently on pullbacks in 2015-2016.
• Got to within 13 ticks of 20000 in December 2016…
• This proves that round numbers are an
unreliable indicator, but can certainly have
a say at times.
• After all, who remembers turning 30, 40 or
50?
18. Support and Resistance
• Other traders and their role
– “Fundamentalists!”
• Good stocks get bought, and this buying will see resistance levels broken
• Analyst upgrades and downgrades can move prices through support or resistance
levels
• “Value” plays can equal “support” plays
• They are still the “herd” that us analysts are studying! If the herd make more noise, we
hear it!
– Algorithmic Trading
• Often “Algo” trades are triggered by “events” like a break of a support or resistance level
• Most Algo trading is triggered by an uptick in volume, or the release of an economic
number, all events that usually provide a break or hold of a support or resistance level
• Algo trading models are ultimately written by human beings, so even though it’s a
computer doing the trades it is still ultimately a human inputting the criteria!
19. Support and Resistance
• Obviously levels that were the scene of a battle only a few days earlier will
be fresh in the market’s memory, but technicians find that support and
resistance levels often work well however old they are.
23. Support and Resistance
• Technical Analysis: Self-fulfilling?
• As more and more people use charts more will have access to historic data, and be
armed with the facts as far as old support and resistance is concerned.
– It could be argued that this will make TA increasingly self-fulfilling
– But it could also be argued that the most sophisticated investors (the ones with the money!)
have had ready access to this information for decades, so nothing’s changed at all!
– I believe that the market is too big for any one way of looking at the market to dominate.
– Also “Technical Analysis” is a wide church, and at times even Technical Analysts disagree with
each other!
24. Double Tops/Bottoms
Double Top
• Two price reversals at the same
high
• The trough between the two peaks
must be breached to confirm the
Double Top has been activated
Double Bottom
• Two price reversals at the same low
• The high between the two lows must
be breached to confirm the Double
Bottom has been completed
32. Head and Shoulders Top
• Ideally the volume gets lighter with each peak with the lightest
on the right shoulder (the third peak)
• The first sell off from the head must go below the high forming
the left shoulder
• The break of the Neckline should ideally see an uptick in
volume and volatility
X
33. Head and Shoulders Top
• A move back to the Neckline after the break is not unusual
• A move back above the Neckline negates the pattern
• The Neckline can slope higher or lower
X
34. Head and Shoulders Top
S
S
R
R
R
Is this slide familiar?! In this instance the Neckline is up-sloping so you
would get a sell signal from the Head and Shoulders just before the market
confirmed the downtrend by confirming lower highs and lower lows…
S
S
S
R
R
R
R
37. Chart Patterns - Summary
• Chart patterns have caught the interest of Academia.
– Federal Reserve Bank of New York staff report from August 1995, on the head &
shoulders, entitled ‘Head and Shoulders: not just a flaky Pattern’. Authors are
C.L. Osler (Research and Market Analysis Group at the bank) and P.H. Kevin
Chang (Stern School of Business).
• The Profitability of Technical Analysis: A Review’ by Cheol-Ho Park and Scott H.
Irwin, University of Illinois.
• A good resource is Thomas Bulkowski’s
“Encyclopedia of Chart Patterns”
• Also covered in some detail in “Murphy” and/or
Kirkpatrick/Dahlquist
38. Intra-day Support & Resistance
• Short term traders rely heavily on support and resistance in their trading. They will be
armed with all the important intra-day levels from the previous few days, or the last
time we traded at similar levels
• They use chart patterns and trendlines in a similar way, but on a 10 minute and/or 30
minute chart instead
• They also use Gaps, Market Profile, Moving Averages and Bollinger Bands
39. Gaps
• Why/How gaps occur
• Types of gap, and the “psychology” behind them
– Breakaway gaps
– Measuring gaps
– Exhaustion gaps
– Island formations
• Gaps can be extremely important as support or resistance
41. Gaps
• Market gaps higher during an uptrend
– Psychology of bulls
– Psychology of bears
– Activity of day traders
• Market is trending lower, and we gap lower
– Psychology of bears
– Psychology of bulls
– Activity of day traders
43. Outside Days
• Bullish Outside day:
– Reversal signal in a downtrend
– Usually used on daily charts
– “Western” pattern, similar thinking to the “Bullish Engulfing” candlestick pattern
(but not necessarily the same as there is a slightly different set of rules)
• Lower low (vs previous day)
• Higher high
• Higher close
45. Outside Days
• Bearish Outside day:
– Reversal signal in an uptrend
– Usually used on daily charts
– “Western” pattern, similar thinking to the “Bearish Engulfing” candlestick pattern
(but not necessarily the same as there is a slightly different set of rules)
• Higher high(vs previous day)
• Lower low
• Lower close
47. Pivot Points
• Pivot Points are a “throw-back” to Futures Pit trading days; when there was
very little computing power available to traders.
– They could be worked out with a calculator and jotted on to a trading card
• They are still used/referenced by traders today, although yours truly isn’t a
big fan!
• They use the previous days’ high, low and close to calculate 5 levels; the
“Pivot Point” plus 2 support and 2 resistance levels.
• Calculation:
• http://www.futurestechs.co.uk/calculator/
PP = High + Low + Close /3
R1 = PP - (P x 2) – Low
R2 = PP + (High – Low)
S1 = (PP x 2) - High
S2 = PP – (High – Low)
48. Pivot Points
• Have merit in that they have a “volatility”
element built in to the calculation.
• Best used as confirming levels for
“actual” levels.
• Useful for short term/day trading target
setting.
49. Intra-day Support & Resistance
• Looking at different timeframe charts can give different information
• You can find a support level showing up on a 10 minute chart that
doesn’t show up on a 30 minute or 60 minute chart
• Sometimes the longer term charts cut out some of the noise that appears
on something like a 10 minute chart
52. Reversal days
• Whenever you’re looking at something that’s hitting a support or
resistance level, check to see if there is a pick up in Volume.
• A change in sentiment on light volume is likely not an “event” to worry
about, and is unlikely to sustain
• A challenge of a support or resistance level is a technical event. You
want to see a jump in volume and/or volatility accompanying this event,
otherwise it’s probably not an event!
53. Support and Resistance
• Take care not to buy things that have strong resistance above…
• …and vice versa, avoid selling just on top of support
• Ideally buy when there is little potential resistance above, and lots of
support below…
• …or vice versa - Go short of things that have lots of resistance, and little
support
• “Never too high to buy” because something on its all time highs has little
resistance to worry about!
54. Support and Resistance
• Whenever I’m formulating a trade I try make sure it doesn’t have too many
obstacles between entry and (profit) exit, but plenty of levels stopping it from
getting stopped out!
• It doesn’t matter what timeframe you’re operating on, this holds true
• Support and Resistance levels should be used to place stops, and things
like trendlines can be extremely effective for trailing stops
55. Support and Resistance - Summary
• Whatever your style of trading/investing, whatever products you’re dealing
with, support and resistance is one of the key elements to your decision-
making process.
• There are lots of different ways of spotting potential support or resistance,
and you need to hone your skills and find the ones that work well for YOU
in YOUR timeframe and YOUR markets.
• In the second half we’ll look at the world of candlestick charts and then see
how you can use them in conjunction with Support and Resistance.