For example, Robert Prechter predicted the dot-com bubble with a high degree of accuracy. Granted, it was 5 years too early. However, it still speaks about the potential advantages of this theory. And they lie at the heart of what has made Elliott Wave so divisive and useful at the same time.
Understanding Bollinger Bands and Pivot Points is one of the elements that make a reliable forex trading foundation. And comprehending them will allow any trader to do top-level forex trading.
So, there are different types of technical charts with different purposes, such as tic or tick charts, line charts, bar charts, and charts of points and figures.
On this occasion, we will discuss what is a Tick chart, what makes it different from the other types of charts, how they operate, and what their advantages and disadvantages are compared to other technical indicators.
When you want to start trading, you need to learn to identify when a trend is occurring.
Your ability to predict or recognize when an uptrend or downtrend is actually occurring will inevitably dictate how successful your trading career is going to be.
However, if you still don’t know how to do this, you needn’t fret, for I am here to illustrate just that!
What’s A Trendline?
A trendline is a simple line drawn through a point of the candlesticks, be it the top, bottom or middle of the candle. It’s as simple as that.
Trendlines are one of the most important tools of technical analysis as they the basis for many other technical trading concepts and patterns. In fact, nearly all technical traders use trendlines, even if they’re not visually representing it, and most do so subconsciously.
A trendline is drawn between two or more points on a chart. The direction of this line accurately illustrates the direction of the trend in the majority of cases across all the different markets whether it’s Forex, stocks, cryptocurrencies or other assets.
The concept has its own tools and steps for being successful at it, but you needn’t worry since that’s exactly why we’re here today, to teach you what you need to do just that
It’s more than a month the stock markets were overwhelmed by real panic. For example, when taking a look at the S&P500 index development, it could look that the best actual solution is the protection of capital so the sale of asset. However, in case of S&P500 history tells us that selling the asset does not have to be the best idea, in particular for the long-term investors.
From the chart below, it’s evident that those hot-headed traders (in the even of economic crisis in 2007), who were selling under the pressure of panic that time, often suffered significant losses. On the other hand, those who remained confident about “more optimistic days” got out of their losses by 2013.
Traders have to make use of indicators in order to use proper strategies and make successful trades in the market; these indicators are statistical tools that let them make critical decisions about the heading direction of a currency pair.
We all know about the MACD oscillator – one of the most widely used indicators in technical analysis.
Support and resistance are the foundation for nearly every technical trading strategy. Anyone who has experience in trading Forex or any other market has heard about support and resistance levels.
Support and resistance levels rarely work as precise points on the chart where the market reverses or not. Many new traders may overlook this important fact about support and resistance levels. The levels are not an exact science that can tell you where the market will reverse exactly. Rather, it’s more about probabilities and possible scenarios.
Frequently asked questions of traders are: "What kind of indicators should we use in trading?" Or often traders ask "without which indicators you can not trade?".
Of course, there is no unambiguous answer to these questions. Different indicators monitor and evaluate various factors and market trends.
There is, however, one that provides us with information about support / resistance, and trends at the same time. This indicator with the whole name is called Ichimoku Kinko Hyo, also known in short form as Ichimoku.
The average daily range is a nice tool (or maybe better said, just a useful statistic) that’s most practical for day-trading the Forex market, although it’s definitely also useful for other trading styles like scalping or swing trading.
You have probably noticed that we frequently talk about the 50, 100 and 200 period moving averages in our daily and weekly posts that are regularly published in the FxTradingRevolution news section.
Considering that one of the basic rules of technical analysis is essentially a self-fulfilling prophecy, it’s no wonder that these 3 moving averages work so well in the Forex market. Basically, the more people look at and trade by the same price level the more likely it is for that price to be important in some way (i.e. to be a point of reversal). Since a lot of traders are plotting the group of the 50, 100 and 200 moving averages on their charts, it only makes them a more reliable trading indicator.
A common question in the Forex community, especially asked around a lot by rookie traders, is whether fundamental analysis or technical analysis is better to trade the Fx market.
When trading using trend lines, you are waiting for a moment when the price of an instrument gets to a certain price level, off of which the market is very likely to bounce.
When using this strategy, every trader has to remember that the market can react two different ways:
We often hear that we should not plot too many lines and/or indicators on our charts when we trade Forex. This advice and the reasons cited behind it are certainly valid.
Stop-loss trading orders are one of the most important parts of every forex trader’s strategy. Naturally, there are traders who are brave enough to trade without stop-loss orders or other kinds of capital protection, but it can be very hard for them to achieve stable results long-term.
Whether we like it or not, trading is about estimating and probability that can lead us to our estimations.
That is why this article should not primarily be a guide to profitable trading strategies based on Pin Bar patterns, but an assistant to those who use these patterns so they can eliminate patterns that have a low chance of success.
Let’s go through some techniques that more experienced traders use to eliminate undesirable patterns and false signals.
This is why most traders prefer only one of those styles and usually stick to it throughout their trading careers.
However, that is not always the best way to go about trading. The Forex market is a 24-hour market that offers the opportunity to profit in both bull and bear markets – contrary to stocks or other markets.
If we wait for a trend to develop in order to take a trade we might have to wait for quite a while, and, in fact, also miss many other opportunities to make money in the periods when the market is not trending.
Let’s mention a couple of examples that make this statement considerably relevant. One great example is the changing of the seasons. Our lives happen in cycles as well, because we experience good and bad life periods that alternate.
And if we look at life outside of the context of our own existence on this planet, we’ll see that the cycle of life consists of microcycles and that those microcycles are our individual lives.
A range does not have to be a horizontal one, however, rather it can be in any form inside of which the price is contained for a certain period of time. Consolidation patterns, such as flags, triangles, and channels can also be considered ranges that can be traded if they appear on the larger timeframes. In general, the trading range will be defined on a larger-scale timeframe while traders will look for entry opportunities on lower timeframes.
However, in the real market things are not always so simple and the price doesn’t always bounce between two perfectly horizontal lines. That’s why different indicators were constructed to try and predict the most probable trading ranges in the market. One of the best indicators for this purpose are definitely Bollinger Bands.
The correlation indicator for MetaTrader 4 is a very valuable trading tool that can be downloaded for free from our website at the following link:
The popular MetaTrader 4 platform, by default, does not include any such indicator or tool that is able to display two different instruments or currency pairs on the same chart. Thus, our indicator comes in handy for conducting this very valuable analysis for Forex trading.
We know for a fact that some currency pairs, and also some completely different types of financial assets for that matter, are highly correlated. Examining these correlations in real time can give us additional information about a particular currency pair and enable us to pick the market turning points more accurately and also more profitably.
In this first article of the series on Pivot Points, we’ll discuss one of best ways to use them in your trading which is the 70-80% rule. In this introductory article here you can read about the basics of pivot points and how each of the Pivot Point levels is calculated, while in subsequent articles in this series, we’ll discuss some additional great ways in which Pivot Points can be used to gain an edge in the markets.
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