Dow Theory Confirms Technical Analysis Trend
Dow Theory is a unorthodox theory on stock price movements that includes both technical analysis as well as sector rotation. The theory was created out of 255 Wall Street Journal editorials written by Charles H. Dow (1851–1902), the founder and first editor of the Wall Street Journal and co-founder of Dow Jones and Company. The [...]
The Head and Shoulders Patterns Signals the End of a Trend
The Head and Shoulder pattern is one of the most discussed patterns used by technical analysts to reflect the end of a trend and the reversal of a market movement. The pattern almost always comes at the end of a large up move, and signals a period were the market is consolidating. A head and [...]
Technical Triangles Reflect the Calm Before the Storm
Descending Triangle The descending triangle is also a variation of the symmetrical triangle. The pattern is a consolidation pattern which defines a period prior to a breakout. The descending triangle generally is a bearish as the consolidation leads to choppy trading which eventually breaks lower. In the descending triangle the bottom part of the triangle [...]
Trading Volatile Market Can be Risky, but the Reward can be Significant
When a financial instrument moves quickly in one direction, the markets are deemed to be volatile. Generally downward movements are associated with the word volatility, but upward movements can be just as unsettling and confusion. Volatile markets create trading opportunities, but they can also be very difficult to trade. Markets can also be volatile and [...]
Understanding Consolidating Markets Leads to Profitable Trading
An investor should be very cognizant of the many different types of market conditions that exist, prior to risking capital in the financial markets. There are numerous tools that can be used to identify different market condition, and quickly understanding the current market environment is a key to successful trading. Evaluating the particular market condition [...]
Understanding Market Conditions are a Key to Successful Trading
Market conditions generally prove to be a powerful determining factor when examining historical trading results. An investor should be aware of the many different types of market conditions that exist, prior to risking capital in the financial markets. Understanding how to identify the different types of market conditions, is an important lesson for any trader [...]
Technical Analysis – Using Mean Reversion to Trade Range Bound Markets
Technical indicators can be broken down into categories that alert a trader when the market is in different types of trading climates. Trend following indicators will alert a trader of a trend, while momentum indicators will show the strength of the trend. Mean reversion indicators are excellent at representing range bound markets, and periods of [...]
Technical Analysis – Momentum Keeps the Market Moving
Technical indicators give investors a tools that acts as a guide line and can be used in tandem with fundamental analysis to find trades where the risk/reward characteristics are in prudent and profitable. Momentum is an indicator that helps an investor target a market in which the velocity of the price action is increasing. Momentum: [...]
Trend Follow a Robust Technical Analysis Tool
Technical Analysis: Technical analysis is the study of price action and the view that all the availabe information in the marketplace is priced into the market. There are numerous types of technical tools which include trend following indicators, momentum indicators, oscillators and mean reverting indicators. Technical analysis also includes the ability to find support and [...]
The Importance of Volume In Technical Analysis For Forex Trading
Though we have said that technical analysis focuses on price and volume, we have said relatively little about the role of volume so far. Volume is simply the number of contracts traded over a given period of time usually one day. The higher the volume, the more active the forex trading. Analysts look at the [...]
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