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Technical Analysis Articles |
Written by DailyFX |
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One of the more popular technical indicators in use today is Bollinger Bands. Created by John Bollinger in the early 1980s, this tool is essentially a Moving Average with a volatility filter. Volatility can be of great value in an indicator for those times when the market is swinging wildly between the lows and the highs as a result of some news event. |
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Technical Analysis Articles |
Written by DailyFX |
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You see that the EUR/USD was moving up strongly, so you bought this pair on the last pullback. But now after another move up, the pair has pulled off of the highs and is moving down and you wonder if there is a way to measure the strength of the move so you could have exited earlier to protect more of your profits. There is and it is called the Average Directional Index (ADX). |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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"The Relative Strength Index (RSI) is such an indicator, offering the best of all worlds," said Cardwell, president of Cardwell Financial Group, Inc., based in Woodstock, Ga. The RSI "is the cornerstone of my trading model," he said. |
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Technical Analysis Articles |
Written by Ian Copsey |
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The easy answer to the question is "when it's not a pattern". And that really is the real crux of the issue... Let me explain. Let's take a look at one of the most simple patterns in technical analysis, the Double Top (Bottom). This is the hourly chart of Dollar-Swissie in a run up from the 1.0883 low which found a high at 1.1324. Following this it pulled back lower and then attempted to move back to the high once again. However, it failed just 6 points from that high and then declined quite sharply. |
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Technical Analysis Articles |
Written by Ian Copsey |
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When is an overbought RSI reading bullish and when is it bearish? One classic interpretation of momentum indicators is that of overbought and oversold. Normally these are quite good signals when used within a consolidating market although mere oversold or overbought readings should not be used to buy or sell (respectively) without other forms of analysis and preferably in shorter term time frame charts. |
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Technical Analysis Articles |
Written by IFTC Financial Studies |
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Over the past decades, attempts have been made by traders and researchers aiming to find a reliable method to predict next action of the securities. As a result we have a variety of different fundamental and technical analysis methods and many theories today that really work. For the first pace I want to discuss technical analysis which is very popular these days. |
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Technical Analysis Articles |
Written by David Rodríguez |
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Some of the most popular trading strategies in forex markets involve the use of Japanese Candlestick charts. Given a specific pattern in candlestick formations, traders look to buy and sell currencies in anticipation of reversal or continuations in price. Yet testing the profitability of such concepts is easier said than done. Given that many of these formations are inherently qualitative in nature, it is difficult to develop a reliable quantitative approach with which to test the viability of such strategies. That being said, we will attempt to quantitatively identify specific candlestick patterns and backtest the profitability of trading on such candlestick signals. The first ones that we will analyze are morning star and evening star formations. |
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Technical Analysis Articles |
Written by IFTC Financial Studies |
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Seven years ago when I was about to finish a long time study on how to understand the real meanings of economic concepts and in a shiny day when apparently everything did worked out well , I found myself a leading scientist of economics, someone who will be rich in couple of months. Seasons passed but nothing really happened with my saving account and I was fully desperate when I did get into disappointment hole. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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"My work has gotten better due to simplifying my approach," John J. Murphy, the veteran technical analyst, author and CNBC resident technical analyst, told a group of equities and futures traders attending the Technical Analysis Group (TAG) XVIII trading conference sponsored by Dow Jones Telerate in New Orleans. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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William Delbert (W.D.) Gann is regarded as one of the pioneers of technical analysis and market behavior. He wrote several books on stock and commodity trading and developed the well-known "Gann angles" and "Gann Fans." Gann was born on a farm near Lufkin, Texas, in 1878. His rise to trading fame is a remarkable story. He was the oldest of many children on the farm, and did not even finish grade school. Back then, it was not uncommon for the oldest boy to quit school at a relatively young age and stay at home to help out on the farm. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Regular readers of my reports will probably recognize that I use cycle analysis when trying to work out which direction a currency pair will be moving and when this direction is likely to reverse. So what do these look like and how do they work? The following chart shows the cycles I have been using to identify the major cycle low in Dollar-Yen back in August, from which time I have been bullish over the rest of this year. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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Those who have followed my work for some time know that I take a "toolbox" approach to analyzing and trading markets. The more technical and analytical tools I have in my trading toolbox at my disposal, the better my chances for success in trading. One of my favorite "secondary" trading tools is moving averages. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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In some of the educational stories I have written, I discussed my "primary" trading tools and my "secondary" trading tools. I also mentioned that the more tools one has in his or her "Trading Toolbox," the better the odds for trading success. In this educational feature, I want to focus on one of the most basic--yet most powerful--trading tools: the trend line. |
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Technical Analysis Articles |
Written by Thomas Long |
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Many times in trading we here the terms overbought and oversold. We hear an analyst state that the EUR/USD is overbought and due for a correction or that the USD/CAD is oversold and due for a bounce. But how does one determine what is overbought and what is oversold and just what does that mean? |
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Technical Analysis Articles |
Written by Thomas Long |
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New traders typically want to know the difference between Fast Stochastics and Slow Stochastics. They also want to know whether the typical default settings of 5,5 (for Fast Stochastics) or 5,5,5 (for Slow Stochastics) as seen in most charting packages developed for FX are better or worse than the typical default settings of 14,3 (for Fast Stochastics) or 14,3,3 (for Slow Stochastics) seen in stock and futures charting packages. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Have you ever been frustrated with RSI? How many times does it fail to reach those overbought and oversold areas? When it does, quite often price just continues. Well, there is another technique, not very exact but can be useful. It is possible to draw a trend line on RSI. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Well, yes they are but that doesn't mean you can't use them in other areas also… Actually, trend lines on RSI can often provide you with break signals much earlier than signals from the price chart. Let's face it trends are trends wherever they are seen. If you consider the basic definition of a trend you will see that trend lines can be placed on trends on plots other than price. |
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Technical Analysis Articles |
Written by Thomas Long |
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In my opinion, one of the strongest signals generated by technical indicators is MACD divergence on a daily chart. MACD stands for Moving Average Convergence/Divergence and can be quite useful for giving hints of a possible market reversal. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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The Percent Range (%R) technical indicator was developed by well-known futures author and trader Larry Williams. This system attempts to measure overbought and oversold market conditions. The %R always falls between a value of 100 and 0. There are two horizontal lines in the study that represent the 20% and 80% overbought and oversold levels. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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The Moving Average Convergence Divergence (MACD) indicator has the past few years become one of the more popular computer-generated technical indicators. The MACD, developed by Gerald Appel, is both a trend follower and a market momentum indicator (an oscillator). The MACD is the difference between a fast exponential moving average and a slow exponential moving average. An exponential moving average is a weighted moving average that usually assigns a greater weight to more recent price action. |
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Technical Analysis Articles |
Written by Global Forex Trading |
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Traders can use Elliott Waves even without using all the intricacies of this complex analysis method. They can use the clear and rich signals of all waves at macro scale. And they can use wave 3 as a standalone trend, to which they apply standard trend analysis |
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Technical Analysis Articles |
Written by Thomas Long |
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Moving Averages may be the most popular technical indicator because they are easy to understand. After all, a 10-day Simple Moving Average is calculated by just taking the closing prices of the last 10 days, adding them together and dividing by 10. |
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Technical Analysis Articles |
Written by Administrator |
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The Keltner Channel was developed by Chester Keltner back in the early 1960s. He is a well-known commodity trader, especially grains. It is a volatility-based indicator that makes use of the "envelope theory." Moving average bands (or channels), like the Keltner Channel, fall into the general category of envelopes. These envelopes consist of three lines: a middle line and two outer lines. Envelope theory states that the market price will generally fall between the boundaries of the envelope (or channel). If prices move outside the envelope, it is a trading signal or trading opportunity. Some have used the Keltner Channel as a trading system. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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Support and resistance levels on bar charts are a major component in the study of technical analysis. Many traders, including myself, use support and resistance levels to identify entry and exit points when trading markets. When determining support and resistance levels on charts, one should not overlook the key Fibonacci percentage "retracement" levels. I will detail specific Fibonacci percentages in this feature, but first I think it's important to examine how those numbers were derived, and by whom. |
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Technical Analysis Articles |
Written by Adam Rosen |
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The first step in identifying a trading opportunity is to start with the daily chart to get a feel for the mood of the market. Is the market range bound and bouncing between two general areas or is it trending? This first step leads to what approach should be used when opening a trade. |
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Technical Analysis Articles |
Written by Adam Rosen |
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Traders have many different technical indicators to choose from when analyzing the FX market. This virtual cornucopia of options can sometimes be unsettling to some traders but does not need to be. The important thing to remember, when practicing Technical Analysis, is to use indicators that work well together. For example, you would want to use indicators that show both potential levels of support/resistance with one that might show oversold/overbought levels so that both indicators work together to confirm an entry point. |
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Technical Analysis Articles |
Written by Adam Rosen |
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When the market establishes a trend in a particular direction, often times this trend may continue higher at a certain angle which simply reflects the strength of the buying forces over a given period of time. What's important to note is that these trends may persist for a great period of time; perhaps several months or years. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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The long-term Kondratieff cycle (also called the "K-Wave") is based on the study of nineteenth century price behavior that included wages, interest rates, raw material prices, foreign trade, bank deposits, wars, technological discoveries, public opinion, politics, weather and other available data. In this educational feature, I will touch upon the basics of this long-term economic cycle, including its possible implications for commodity prices and the economy in the coming months or the next few years. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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Respected trader and educator J. Welles Wilder developed "Average True Range" (ATR) as a tool for a more precise and realistic calculation of market's price activity and volatility. The ATR is useful when calculating the directional movement of a market. Wilder defined the "True Range" of a market to be the greatest of the following periods: |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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The Andrews Pitchfork is yet another one of my "secondary" trading tools. My "primary" trading tools include basic trend lines and chart patterns, trader psychology and fundamental analysis. I use the secondary trading tools to help confirm what my primary trading tools may be telling me. |
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Technical Analysis Articles |
Written by Ian Copsey |
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First of all let's be clear about one issue. Indicators are derived from algorithms that used past data to provide a current value. They are by definition lagging. There are some developers who claim that their indicators are leading indicators - that they provide signals for the next period. Well, there are some such as pivot levels and Fibonacci, but in the ordinary range of indicators such as momentum and derivations of momentum, moving averages and bands that are supposed to indicate support or resistance, they are all lagging. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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OBV is calculated as the continuous consecutive sum of volumes, whereby the entire volume of a day is added to the volume of the previous trading session's OBV, if today's closing price is above that of the previous session. Should the closing price be below that of the previous session, the day's volume is subtracted. Unchanged closing prices have no effect on the OBV--the volume is neither added nor subtracted. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Ever wondered how you can generate signals from RSI apart from the usual overbought and oversold levels? It can be done although personally I wouldn't trade on signals that do not include an input from price. Let's face it RSI can be very frustrating when it fails to reach overbought or oversold for long periods of time. Well, let's just consider what RSI is telling us and whether we can use that concept in another way. |
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Technical Analysis Articles |
Written by Adam Rosen |
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The FX-market oscillates on a regular basis between range bound and trending markets. In range bound market conditions, traders typically adopt a simple buy low, sell high approach, where as trending market climates call for traders to trade with the trend. However detecting whether the market is currently in a range bound or trending environment can be tricky, and costly if applied inaccurately. With that said, the Fibonacci levels can provide a valuable insight to the current market climate and the appropriate trading approach. |
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Technical Analysis Articles |
Written by Cornelius Luca |
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One of the most common topics of conversation for traders is Elliott Wave analysis. Ironically, few traders actually apply this method because many are unsure about the intricacies of the Elliott Wave. In truth, correct analysis and counting of the waves can be a daunting task. However, even without the help of electronic wave analysis, traders should be able to enhance their profitability with a disciplined use of Elliott's method. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Why moving averages are my least favored trading tool. "What moving averages do you use?" Isn't that a common question? Is there and answer? Of course, many traders use moving averages. Which are the best periods to use then? My answer: "Depends on how much money you want to lose." |
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Technical Analysis Articles |
Written by Ian Copsey |
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There is reason for caution when analysts tell you that moving averages forecast price movement. Many analysts still claim that moving averages can be used to forecast the subsequent day's movement. I'm not sure why this is considered true as none of the tests I have ever done suggest that they are anything less than poor at the role. In fact, almost certainly they would lose money when used in this fashion. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Support and resistance is a tool which is often used but quite often the source of the support and resistance levels are not often completely obvious. There are several ways to derive these levels: 1. Previous support remains supportive until broken and vice versa; 2. Previous support becomes resistance and vice versa in pivot levels; 3.Fibonacci derived support and resistance either by retracement or projections |
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Technical Analysis Articles |
Written by Ian Copsey |
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Have you ever scanned through the list of indicators to see whether there is anything interesting that you think you can use? Did you input Percent R? Maybe you thought it was useful, perhaps not. Did it remind you of anything? It looks similar to Fast Stochastics possibly… |
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Technical Analysis Articles |
Written by Ian Copsey |
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MACD is used quite widely among traders mainly, it would seem, because the basis for the indicator is something they can visualize - effectively measuring the degree of convergence or divergence of two exponential moving averages. Commonly traders will consider buying or selling on crossover of the MACD lines. However, there can be problems and it is worth understanding when these may occur. |
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Technical Analysis Articles |
Written by Adam Rosen |
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The EURUSD (1-Hour Chart) has now established what appears to be a classic "Head and Shoulders" pattern over the course of the past few weeks. This pattern is essentially a 'triple top' pattern, where the center top (Head) stands higher than the first or third tops (Shoulders). The rational occurs as the result that the market was not able to revisit recent high prices established during the center top, and therefore is inherently a sign of an imminent reversal to come. |
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Technical Analysis Articles |
Written by Ian Copsey |
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When there is a modestly sustained move the Stochastic crossovers can provide a reasonable profit but all too often in the small, rather tight range consolidations it can give back much too much of hard earned profits. Is there any way we can try and prevent this give back? I tend to consider the plain signals provided by momentum indicators as too simple and in a way that doesn't really fully take price development into consideration. Does a reversal of the %FastD through %SlowD constitute a directional reversal? Personally I do not think so. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Many traders like to use Bollinger Bands to try and identify entry signals. The problem I have always had with them is that they only provide approximate support and resistance which causes problems in knowing where you should enter and where the stops should be placed. Not only that but sometimes they just don't seem to work at all as a support/resistance tool and the judgment of when they'll work appears purely subjective. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Have you ever seen RSI overbought and wonder whether it was the right time to sell? Let's face it, an overbought reading in a momentum oscillator can merely mean that price is strong and may even turn into an uptrend. Is it a valid overbought signal? Do you sell? Where do you sell? Where should you place your stop? |
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Technical Analysis Articles |
Written by Adam Rosen |
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Any technical analysis tool is designed to identify the price level, with the greater probability of representing a future market turning point. Any trend line or indicator used on its own may only produce a 50% rate of accuracy. However when multiple lines indicate a similar price level and trade theory, then our chances of being accurate may increase dramatically in our favor. |
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Technical Analysis Articles |
Written by Ian Copsey |
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A unique way to utilize the stochastic indicator. Here is a simple technique I devised some years ago and introduced to the institutional market. It takes one of the markets' favored indicators Stochastics and identifies a pattern that when used in conjunction with other analysis can provide great trades. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Not too many books will discuss the use of pivot levels, mostly the topic being covered as being calculated mathematically through the use of daily highs and lows. However, the is an alternative way of looking at pivot levels which, albeit subjective, can provide excellent trading opportunities. |
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Technical Analysis Articles |
Written by Adam Rosen |
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The FX-market will normally oscillate between range bound and trending conditions a few times throughout the year. We may see the market spend a relatively low or high amount of time in either market condition, depending on the fundamental picture and economic climate of each currency within the pair. However it is safe to say that the FX-market has the tendency to remain in a range bound condition the majority of the time due to a number of reasons including the extremely high amount of volume that passes through the market every trading day. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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Moving averages are one of the most commonly used technical tools. In a simple moving average, the mathematical median of the underlying price is calculated over an observation period. Prices (usually closing prices) over this period are added and then divided by the total number of time periods. Every day of the observation period is given the same weighting in simple moving averages. Some moving averages give greater weight to more recent prices in the observation period. These are called exponential or weighted moving averages. In this educational feature, I'll only discuss simple moving averages. |
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Technical Analysis Articles |
Written by Jim Wyckoff |
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First of all, these two oscillators--especially the RSI--tend to be over-used by many traders. As you just read above, some traders use these oscillators to generate buy and sell signals in markets -- and even as an overall trading system. However, I treat the RSI and Slow Stochastics as just a couple more trading tools in my trading toolbox. I use them in certain situations, but only as "secondary" tools. I tend to use most computer-generated technical indicators as secondary tools when I am analyzing a market or considering a trade. My "primary" trading tools include chart patterns, fundamental analysis and trend lines. |
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