FXstreet.com: Education: Technical Analysis

FXstreet.com: Education: Technical Analysis
FXstreet.com: Education: Technical Analysis. Useful resources for traders that want to explore the use and/or integration of price chage in their market analysis.

02/01/2012
Volatility opportunities with FX
This article is taken from the YourTradingEdge magazine (NOV/DEC 2011 issue). Tim Waterer is a senior FX Dealer working at CMC Markets based in Sydney. Tim has over 10 yearsâ€™ experience in financial markets. He commenced his financial markets career with four years in stockbroking before joining CMC Markets in 2004. Tim Waterer on the growing attraction of FX trading. It is hard to believe that twenty years ago the currency market was virtually the sole domain of â€˜the big end of townâ€™,

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01/09/2012
Heikin-Ashi: A Better Candlestick
by Justin Kuepper Most profits (and losses) are generated when markets are trending--so predicting trends correctly can be extremely helpful. Many traders use candlestick charts to help them locate such trends amid often erratic market volatility . The Heikin-Ashi technique--"average bar" in Japanese--is one of many techniques used in conjunction with candlestick charts to improve the isolation of trends and to predict future prices. Calculating the Modified Bars Normal

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01/05/2012
Revolutionary War Cycles
This article is taken from the YourTradingEdge magazine (NOV/DEC 2011 issue). David Burton has been studying and using financial astrology and the methods of WD Gann since 1980. David Burton explores the trading methodology of WD Gann. Most people are not aware that WD Gann followed cycles on just about anything he could get data on. Gann had hand-drawn charts hanging in his office, one of which showed four natal charts in the inner circle: 12 October 1492, 4 July 1776, 13 March 1848 and 18

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12/13/2011
Is Your Trading Square? Use Triangles!
This article written by Todd Krueger, was originally published in the November 2011 issue of SFO Magazine. Todd Krueger is a full-time trader. He is president of Traders Code LLC. He is a renowned expert on the Wyckoff trading methodology. Skilled chart readers have used patterns for valuable trading information for a long time. There are many different chart formations that can appear on a price chart including head and shoulders, double tops/bottoms, triple tops/bottoms,

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12/12/2011
Darvas Box Traps Elusive Returns
by Michael Carr, CMT Long before the internet provided real-time stock quotes and online brokers offered instant fills, Nicolas Darvas managed to grow a $36,000 investment into more than $2.25 million in a three-year period. While on a worldwide dance tour in the 1950s, he relied solely on Barron's, a weekly newspaper, and telegrams to his full-service broker to get quotes and place orders. Although Darvas developed his stock selection techniques many years ago and in a different

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12/05/2011
The Dead Cat Bounce: A Bear In Bull's Clothing?
by Investopedia Staff There's an old saying in investing: even a dead cat will bounce if it is dropped from high enough. The dead cat bounce refers to a short-term recovery in a declining trend. In this article, we explore this phenomenon by looking at an example of a dead cat bounce and contrasting it to an actual change in sentiment that turns a market's outlook from bearish to bullish . What Is a Dead Cat Bounce? Let's take a look at a period of economic

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11/30/2011
Video Interview with Andrei Knight: How to improve your Fibonacci reading?
Andrei Knight , Chief Technical Strategies at fxKnight.com, gave us his key tips to do a better Fibonacci analysis in an exclusive interview recorded at the FXstreet.com's International Traders Conference 2009 in Barcelona. Andrei comments the four essential points in Fibonacci.

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11/28/2011
How To Use Gann Indicators
by James Hyerczyk Gann studies have been used by active traders for decades and, even though the futures and stock markets have changed considerably, they remain a popular method of analyzing an asset's direction. New trading areas, such as the foreign exchange market and the invention of exchange-traded funds (ETFs) have also made it necessary to revisit some of the construction rules and application concepts. Although the basic construction of Gann angles remains the same, this

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11/16/2011
Advantages of TRIX - Triple Exponential Average
by Investopedia Staff Long-time readers of Technical Analysis of Stocks and Commodities magazine may remember that is was Jack Hutson, an editor of the magazine, that first introduced TRIX to the technical community. What Is TRIX? The triple exponential average (TRIX) indicator is an oscillator used to identify oversold and overbought markets, and it can also be used as a momentum indicator. Like many oscillators, TRIX oscillates around a zero line. When it is used as

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11/11/2011
Hedging With Currency Swaps
by Matt Cavallaro The volume of wealth that changes hands in the currency market dwarfs that of all other financial markets. Specialist brokers, banks, central banks, corporations, portfolio managers, hedge funds and retail investors trade staggering volumes of currencies throughout the world on a continuous basis. Because of the sheer size of transactions in the currency market, participants are exposed to currency risk. This is the financial risk that arises from potential changes in

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12/13/2011
How To Use Volume To Improve Your Trading
by Cory Mitchell Volume is a measure of how much of a given financial asset has been traded in a given period of time. It is a very powerful tool, but it's often overlooked because it is such a simple indicator. Volume information can be found just about anywhere, but few traders or investors know how to use it to increase their profits and minimize risk. For every buyer there needs to be someone who sold them the shares they bought, just as there must be a buyer in order for a seller to

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11/04/2011
What Are The Odds Of Scoring A Winning Trade?
by Cory Mitchell When many of us think of probabilities, the first thing that comes to mind is a coin toss - having a 50% chance at being right on a given toss. Can something as simple as a coin toss be applied to the market effectively? It can at least provide us with some tools for approaching the markets, and it can be applied in many more ways than one might expect. A trader's current views of probability could be completely wrong, and could very well be why they are not making money in

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10/31/2011
The Stages Of A Forex Trend
by Selwyn Gishen A trend is simply a tendency for prices to move in a particular direction over a period of time. Trends can be long term, short term, upward, downward, and even sideways . When investing in the forex market, your success is tied to your ability to identify trends and position yourself for profitable entry and exit points. Let's look at some stages of a forex trend and how they affect investors. Economic Trends Reflected in Currencies For the most part, an economy that is

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10/26/2011
Using Elliott Wave To Trade Forex Markets
by Jay Kaeppel In terms of the total value of all transactions, the forex market has become the largest market in the world. As the economies of countries across the globe become more and more intertwined, the relationship between the currencies of various countries grows in importance. It is this development that continues to drive interest in the forex markets. This article will examine a method to trade forex markets using the Elliott Wave Theory . The Elliott Wave Theory The Elliott

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10/17/2011
Discovering Keltner Channels and the Chaikin Oscillator
by Investopedia Staff After students of technical analysis master some of the foundational indicators, they might want to tackle some of the lesser-known and discussed technical indicators. Here we take a look at Keltner Channels and the Chaikin Oscillator which are not without a devout following. Keltner Channels Chester W. Keltner introduced and developed the Keltner Channels in his book "How To Make Money in Commodities" (1960). Like Bollinger Bands, Keltner Channels are simply

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10/11/2011
How To Build A Trading Indicator
by Justin Kuepper Elliott and Gann have become household names amongst the trading community worldwide. These pioneers of technical analysis developed some of the most widely used techniques. But how did Elliott and Gann come up with these techniques, and how did they become so successful? Truth be told, it's not as difficult as it sounds! This article takes you through the process of building your own custom indicator, which you can use to gain an edge over the

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09/06/2011
The Tool Winners Use: Force Index Indicator
This article written by Scott McCormick was originally published in the September 2011 issue of Traders' Magazine. Scott is a Chartered Market Technician, and holds the Series 7 and 66 licenses. He began his career in the year 2000 with Charles Schwab as a Registered Representative. In addition to those markets, Scott began trading foreign currencies in 2004. As an instructor for Online Trading Academy, Scott teaches his students the use of technical analysis to identify high pro-

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07/26/2011
Mayan Cycles
This article written by David Burton was originally published in the MAY/JUN 2011 issue of Your Trading Edge magazine. David Burton has been studying and using financial astrology and the methods of WD Gann since 1980. Most have heard or read that the Mayan cycle ends on 21 December 2012, and at that time the world will end. Anyone who knows anything about cycles knows that the world will not end in such a way, especially since Mayan cycles have existed for more than 5000

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05/25/2011
Technical Strategy: Hidden Divergence in the Forex Market
This article written by James Chen was originally published in the June 2010 issue of SFO Magazine. James Chen , CTA, CMT, is chief technical strategist at FX Solutions, a leading forex broker. He is also a registered Commodity Trading Advisor and Chartered Market Technician. Chen is the author of Essentials of Foreign Exchange Trading and Essentials of Technical Analysis for Financial Markets. Price-oscillator divergences represent some of the most prevalent, high-probability trading

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05/11/2011
Fault Lines in ETF Landscape
This article is taken from the YourTradingEdge magazine (MAR/APR 2011 issue). Daryl Guppy is founder of Guppytraders.com, an international financial market education organisation. Guppy is a regular CNBCAsia Squawk Box technical analyst commentator and columnist known as â€˜the chart manâ€™. He is the author of â€˜Trend Tradingâ€™ and eight other trading books. Daryl Guppy explores Exchange Traded Funds: investment profile, risk parameters and trading opportunities. Exchange Traded Funds (ETFs) have

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05/04/2011
Stop Missing Trades!
This article written by Michael Conlon was originally published in the May 2011 issue of Traders' Magazine. Michael Conlon brings to FXEDU over twelve years of trading experience. He started his financial career at Merrill Lynch, and then moved to Donaldson, Lufkin, Jenrette (DLJ), before running a trading desk at an internet trading firm that is now part of TD Ameritrade. Since that time, he has been an independent trader for over ten years. How many times have you flipped to a chart only to

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04/22/2011
Are price updates a good proxy for actual traded volume in FX?
This article, written by Caspar Marney, is taken from the FX Trader Magazine (APR/JUN 2011 issue). Introduction The objective of this article is to analyse the relationship between actual traded volume in the FX markets and its relationship to price updates, or â€˜tickâ€™ volume, over both time and across currency pairs, to determine whether there is a high correlation between the two. We do not believe that the research has been published before. Given the conclusive results, we hope it proves an

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03/04/2011
Technical strategy Playing the ReTest
This article written by S. Wade Hansen was originally published in the February 2011 issue of SFO Magazine. S. Wade Hansen is a founder and managing partner at Learning Markets. Frustration is watching an asset you trade break above a major resistance level or below a major support level and not being in the trade. You do not want to chase the trade, but you do not want to miss it either. What to do? Wait for the retest. This is a technical pattern that forms as the price of a

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01/28/2011
FX Chart Analysis - Take 2
This article written by James Chen was originally published in the January 2011 issue of SFO Magazine. James Chen is chief technical strategist at FX Solutions. One primary characteristic of trading forex differentiates it markedly from trading in all other major financial markets. This is the pairing requirement. Only the spot forex market, in contrast with equities, commodities, bonds and other markets, requires each trade to consist of two entities rather than one. The fact that currencies

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01/05/2011
Support & Resistance
This article is taken from the YourTradingEdge magazine (NOV/DEC 2010 issue). The author, Brad Gilbert , is the Managing Director of Traders4Traders, a live forex training organization. He has been a professional forex trader since 1990 and has worked in Sydney, London and New York for various commercial banks. Brad Gilbert looks at effective indicators for FX trading. Having been an FX trader for 20 years (18 of which were spent trading on commercial bank FX trading desks), Iâ€™m often surprised

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10/08/2010
Myth And Fact - My take on the subject
â€œSo I will ask myself this question, to you, as I ask myself: If thousands are using Fib, and most people fail in trading, then does Fibonacci work? Or is it the problem with the trader?â€ â€“ Tom Hougaard Hello: My aim isnâ€™t to debunk or underline the validity of Fib as a trading approach; neither would the extenuating factors about it be accentuated. My heartfelt apologies go to certain readers who might see this article as preposterously, eccentrically sacrilegious and iconoclastic. When I

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10/06/2010
Difference between simpe/explonential moving averages - Letter to Toni
This article is taken from the YourTradingEdge magazine (JUL/AUG 2010 issue) The authors Toni Hansen , she is a full-time trader, as well as a popular lecturer and market columnist, who has been sharing her knowledge with others over the past decade. To learn more about Toniâ€˜s methods, go to tradingfrommainstreet.com. All questions for Toni can be emailed to LettersToToni (at) gmail.com Many traders combine exponential and simple moving averages by focussing on simple moving averages for the

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09/29/2010
Finding an edge with Technical Confluence
Most if not at all traders, be they day, swing or buy and holders have come across technical analysis. You know what Iâ€™m talking about! Those squiggly lines all the gurus seem to have on their charts! They consist of patterns like the famous â€˜Head and Shouldersâ€™, age old equations seen across nature like â€˜Fibonacciâ€™, even historic wave movements measured by â€˜Elliott Waveâ€™. As great as the names may sound, most if not all these methods and the many others boil down to one key technical

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09/09/2010
Head and Shoulders
The Head and Shoulders pattern is regarded as the most reliable and well known trend reversal pattern. It consists of three well defined consecutive rallies, (two shoulders and one head) that occur at the end of an uptrend. All 3 rallies stop at the support line which is called the Neckline and connects the last 2 lows of the pattern. The two shoulders are usually of the same or similar length while the third peak (the head) is higher than the other two peaks. The confirmed completion of the

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08/05/2010
Median Lines
This article is taken from the YourTradingEdge magazine (JUL/AUG 2010 issue) The authors is Timothy Morge , who has been a professional trader, author, educator and mentor for more than 39 years. Timothy Morge on how to draw and use median lines, a leading indicator. Median lines, or pitchforks, are one of the few true leading indicators in technical analysis today. They are an offshoot of action and reaction lines, which were developed by Dr Alan Andrews in the mid-1920s. It is said that Dr

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08/04/2010
The Kondratieff Wave
The Kondratieff Wave is an economic theory that states that Western capitalist economies are susceptible to extreme performance volatility as they expand and contract over the years. Unlike what is referred to as the business cycle, the Kondratieff Wave holds that these fluctuations are in fact part of a much longer cycle periods known as â€œsuper cyclesâ€ that last between 50-60 years or longer depending upon factors such as technology, life expectancy, etc. and thus must be examined over their

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07/13/2010
The Gap theory applied on unsustainable movements in EUR/USD
In late 1980s John J. Murphy published his book titled â€œTechnical Analysis of the Futures Marketsâ€, a comprehensive and detailed guide to the concepts of Technical Analysis and their applications to the futures market. Till this day the authorâ€™s book is characterized as the â€œBibleâ€ of Technical Analysis. Almost thirty years later the same concepts are applied to almost any pattern that can be plotted on graph in some way or form, from the commonly used currency fluctuations all the way to

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07/08/2010
Manual Trading Versus Automated Trading
â€˜The goal of any automated system, other than obviously being profitable, is to minimize drawdowns during times when the market conditions are not favorable to system trading.â€ â€” Dr John F. Clayburg. Hello: Auto trading has become a popular way of making money on the markets. It offers great opportunities when it comes to forex trading. The future of auto trade looks spectacular. The idea of making money consistently without lifting your fingers is intriguing. Trillions of dollars are changing

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03/24/2010
Which Works Best - GPS or Road Map? Trading with Elliott Wave Analysis
Some of the best stories about global positioning systems (GPS's) are the weird detours they sometimes recommend to drivers. Just like some of the weird detours that financial markets can make you take when you think they would be better off going in a straight line either up or down, depending on how you've positioned your trades. Not long ago, while taking a trip with my family through Great Smoky Mountains National Park on the way to Gatlinburg, Tenn., I decided to use my GPS to drive

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01/14/2010
Currency Corner: Trading in the pits
This article is taken from the YourTradingEdge magazine (SEP/OCT 2009 issue) The author, Wayne McDonell is the Chief Currency Coach of FX Bootcamp. He is a member of the US National Futures Association and registered as a Commodities Trading Advisor. His latest book â€˜ The FX Bootcamp Guide to Strategic and Tactical Forex Trading â€™ is available from Wiley Publishing. Wayne McDonell provides analysis of the currency market: how professionals use weekly pivot points. "A few weeks ago, I was lucky

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12/23/2009
Introduction and Oscillator Divergence/Momentum Confirmation
Technical analysis can be defined as the study of past price behavior in an effort to determine patterns and trends that are believed to be predictable of the future. At the core of this school of thought is the assumption that human behavior is repetitive in nature. We all recognize that, although human behavior patterns may have recurrent tendencies, they do not normally express themselves in the same exact, mechanical manner each time. Even with this qualification in mind, technical

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12/23/2009
Pivot System Support and Resistance
Pivot System Support and Resistance Judgements made about likely market behavior which are based on momentum analysis can be even more productive if we have predetermined levels available which can act as "price templates" in interpreting the day's trading activity. The "Pivot System" is one such approach. Floor traders and other professionals who do the actual buying and selling of futures contracts in the trading pits of the exchanges, generally employ very similar systems for valuing the

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12/23/2009
Dynamic Support & Resistance Levels for Intraday Trading
Dynamic Support & Resistance Levels for Intraday Trading As helpful as Pivot System levels often are, a significant drawback to their use lies in the fact that they are calculated from the prior day's price action, and may not accurately reflect recent changes in market psychology. Effective intraday trading also requires a means of identifying support and resistance which can more easily adapt and more accurately represent price activity under rapidly changing market conditions. The 20

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12/28/2009
Use of Prior Day Highs and Lows
Use of Prior Day Highs and Lows Each of the intraday trading techniques discussed so far have relied on reference levels arrived at by means of mathematical calculations. The technique discussed in this section, in contrast, will deal with a set of support and resistance levels which are much more intuitively obvious. In short, we will discuss a technique for using the prior day's price extremes as a means of determining market-based valuation levels. If market activity is thought of as an

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12/22/2009
Combining Japanese Candlesticks with Western Technical Analysis for a High-Probability Forex Trading Combination...
This article is taken from the Forex Journal (December 2009 issue). The author, James Chen , CTA, CMT, is Chief Technical Strategist at FX Solutions, a leading Forex broker. He is a registered Commodity Trading Advisor and a Chartered Market Technician, as well as the author of the book, Essentials of Foreign Exchange Trading (John Wiley & Sons, 2009). His newest book, Essentials of Technical Analysis for Financial Markets (John Wiley & Sons) will be released in early 2010. James Chen

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