Trading

Moving Average

SMA
- The most recent days’ data is not given more weight in the maoving average.

WMA
- Gives more wieghtage the the recent data.
- Does nto include all of the data in the life of the instrument.

Exponentially Moving average EMA

The EMA is more sensitive and better for shorter time periods as it can capture changes quicker. The tradeoff is between sensitivity and reliability. Since EMA respond quicker to short-term situations, they may also be prone to giving false signals. Simple moving averages work well for longer-term situations that do not require a lot of sensitivit

Head and Shoulders

his three-peak formation is named for its resemblance to a head and two shoulders. The center peak (head) protrudes above the remaining two peaks (shoulders), which are set at or close to identical levels. The common line of support for all three peaks, which does not have to be a horizontal line, is known as the Neckline. The final downward penetration of the neckline confirms the start of a new downward trend.

Double Top

A double top is formed when the price of a pair in an uptrend rises and encounters resistance. Following this, price retreats to a support level which will become the neckline and subsequently returns to the resistance level. After failing to break the resistance level a second time the pair falls back down. At the neckline price breaks down into a new downward trend.

Flags
Flags are bound by parallel lines of support and resistance. The pattern is commonly followed by a sharp break back into the prevailing trend. Flags have a tendency to form slanted in the direction opposite to the major market trend they inhabit.

Rectangles

A Rectangle is a period of consolidation within an existing trend where the price moves sideways, fluctuating between two horizontal lines before finally resuming its previous trended course.

Trendlines

A trendline is a straight line connecting significant support or resistance levels. Trendlines are always drawn from left to right.

line of support - Trendline connecting a set of support levels
line of resistance - Trendline connecting resistance levels

The more significant trends form at 45-degree angles. A sharper angle suggests an unsustainable rally and suggests that a trend may be close to reversal.

Breaking Trendline -
They are key technical signals in determining the market’s future direction. This indicates that will be reversal

High volume on a trendline penetration or the failure of consecutive support/resistance levels to exceed each other would be characteristic of the market’s determination to break out of or even reverse a trend.

After breaking the trendline, Support Turns into Resistance or Resistance Turns into Support

Channel Line

The channel line runs parallel to the basic trendline, joining the support levels in an upward trend and the resistance levels in a downward tren

Always use CandleStick Chart when you do the analysis.

CandleStick consits of four primary price points: the high, the low, the open and the close.

The body of the candlestick bar is comprised of the difference between the open and close price. If the opening price was lower then the closing price or the given commodity gained value, then the body of the bar is colored blue. To contrast, if the opening price was higher then the closing price or the given commodity lost value, then the body of the bar is red. If the high and low prices are located outside of the open-close range they are marked off by two lines known as the upper and lower shadows. The upper shadow protrudes from the top of the candlestick’s body and marks the high price for the given time period represented by the bar. Conversely, the lower shadow protrudes from the bottom and marks the low price.

8 Major Currency (Majors)

U.S. Dollar ($) - USD
European Currency Unit (€) - EUR
Japanese Yen (¥) - JPY
British Pound Sterling (£) - GBP
Swiss Franc (Sf) - CHF
Canadian Dollar (Can$) - CAD
Australian Dollar (A$) - AUD
New Zealand Dollars(NZ$) - NZD