Technical Analysis
Technical Analysis intro
Technical analysis is a discipline for forecasting the future direction of prices through the study of past market data, primarily price and volume.
In this section we will explain some of our favourite TA techniques but it is by no means meant to be a complete reference. To get started quickly, you can buy one of the many excellent books available, or visit an online resource like BabyPips.com
To see the complete content of the posts below, click on the titles or the 'Read More' buttons.
Fibonacci Retracements
Fibonacci retracements are based on the mathematical relationships, expressed as ratios, between the numbers in the key numbers identified by mathematician Leonardo Fibonacci. In technical analysis, Fibonacci retracements are created by taking two extreme points (usually a major peak and trough) on a chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%
Support/Resistance
One of the most basic and most powerful concepts of Technical analysis is the art of recognizing Support and Resistance, which is explained in detail on the BabyPips website.
Some other basics before explaining fow I trade this:
Andrews Pichforks
Andrew's pitchforks aim at establishing profitable opportunities and swing possibilities in the currency markets. On a longer-term basis, it can be used to identify and gauge overall cycles that affect the underlying spot activity.
More information on how to draw and use pitchforks can be found on www.investopedia.com
For me, the most powerful feature of pitchforks is that they often give you points where profit can be taken, long before any other tool shows this.
CandleSticks
CandleSticks are a visual appealing way to represent price fluctuations. They are introduced in detail on:
Some of my favorite formations include:
Pinbars
Chart Patterns
Chart patterns are formed within a chart when prices are graphed, and can be used to estimate future price movement. A very nice overview of the most common formations can be found on www.thepitmaster.com, a short introduction to fibonacci-based patterns on www.fx360.com
Some notes about chart patterns:
Pivot Points
Pivot Points are an indicator derived by calculating the numerical average of the high, low and closing prices of a commodity. These points can be used as a predictive indicator: if the following day's price falls below the pivot point, it may be used as a new resistance level. Off course, the opposite is also true.
An explication of how they are calculated can be found on WikiPedia.org.
