THE ART OF IDENTIFYING TRENDS Technical analysts believe that prices move in trends, and price movements generally follow established patterns that can be partly attributed to market psychology based on the widely-held belief that participants in markets react in a similar fashion when faced with similar situations. The price of a security automatically factors in economic conditions. The impact of events such as interest rate changes, or the latest inflation reports are automatically factored into the currency price through the actions of buyers and sellers in the market. When it comes to pricing, history advanced technical analysis forex to repeat itself.
Technical analysts track historical prices and traded volumes in an attempt to identify trends. They use graphs and charts to plot this information, and for this reason are sometimes referred to as chartists. By attempting to quantify historical performance, technical analysts seek to identify repeating patterns as a means to signal future buy and sell opportunities. This video is designed to introduce traders to technical analysis to demonstrate how you can add these mathematical studies to your trading charts. While this lesson does not require you to have any past experience with technical indicators, it does assume that you have some understanding of trading forex and CFDs. INCLUDES: OHTC and candlestick price charts, trend identification, and mathematical indicators like moving averages, oscillators or momentum indicators, and Fibonacci ratios.
More detailed information about these topics can be found in the sections below. MEASURING MOMENTUM Oscillators can help distinguish between reversals and fluctuations. EVALUATE THE STRENGTH OF THE CURRENT MARKET The RSI is straight-forward to interpret and produces very clear trade signals. IDENTIFY THE DEGREE OF REAL-TIME VOLATILITY Volatility describes the degree by which an exchange rate varies over time and tends to increase just prior to a rate reversal. PREDICTING FUTURE RATES Fibonacci work on the theory that after a rate spike in either direction, the rate will return part way back to the previous price level before resuming in the original direction. ADVANCED CHARTING Trade forex and CFDs while referencing an extensive list of leading edge indicators and drawing tools.