Technical Analysis (3) Trends and ranges

 

Trends and ranges

When you decide to Trade Forex I have to learn some of the terms used here. This is of important Maximum, you need to understand what you're doing before you start trading. It is useful to learn the terminology used here and their applications In helping you understand the Forex market. Know trading trends, as well as ranges, before you position Alley Strategy. 

This market requires technical knowledge, so beware of trading before understanding important terms. colt You choose the path of starting trading before you fully understand what is happening, you will end up bankrupt and frustrated. So the way the right thing to enter the market is a thorough understanding of what is happening. To achieve understanding, you must learn, so a shortcut In here.

Trend Trading

Trend trading occurs when prices move in one specific direction. The market is considered rebounding when prices move to the highest, and investor confidence is constantly increasing in the higher direction. The trend is bearish when price fluctuations oscillate Down. When you decide to determine the direction you should remember that the peak (high), and the lower point (low) are formed by the same method as the "step" method.

From this, you can draw support lines below the uptrend (uptrend), and resistance lines above the downtrend.

Once the price reaches those lines, the trend is supposed to be the most complete of its full cycle, and it will begin. Inverse. Remember that identifying trend lines is a subjective order that varies from one person. 

But it's a guide. Good at general price levels, to determine your entry area, or stop loss decisions. Below we address the example of A graph of the upward trend, the downtrend, and the lines of support and resistance.

Trend Reflection

A trend reversal simply means that the trajectory of market prices changes or a breakdown occurs in the direction of trading. So the direction fails. the bullish is reaching new highs, and the price is now breaching what was previously the support level. 

This failure is clearly shown that something has changed, and re-evaluation must occur without this process, it is common to form what is known as a "double peak" (or a double bottom), or even to form a "third peak" or tertiary bottom. Consider the double peak of the letter M, the double bottom of the letter W (see the two atoms and the two lower points in both? The third peak and bottom are either the addition of a new peak or a new lower point.

Domain Trading

A trading range refers to charts in which movement is balanced upwards and upwards or so-called price boosts. 

Prices move significantly above or below for an extended period of time. 

At the beginning of a new trend, what is happening is known as strengthening or building the base.

Understanding the current trend is an important asset to an investor. It depends on their analysis, but Allen Many traders are looking for the same configurations, and build their economic decisions on them. By saying this, we add some kind of herd mentality to trading. Everyone can see what's in the graphs, understand the configurations, and identify the models that are formed.

This is useful in the process of understanding prices, and what you may or may not do in the future.

Graph configurations and models

Graphs are useful in identifying the locations of a breach before it occurs, which only helps predict the future. and market trends, but it is also useful in setting price targets before you enter or exit the position.

Models addressed in this topic:

Equilateral triangle

Ascending Triangle

Descending triangle

Double Summit

Double bottom

Head and shoulders

Inverted head and shoulders

The triangles are equal to the ribs.

These triangles are formed on charts in case there is an italics line from the peak of the price, and another italics line from its point.

The lowest, these two lines connect at a point, and the shape in them appears as an equilateral triangle; as shown in the drawing. The chart below.

During the period of formation of this model, the price goes through lower highs and higher lows. This shows that the sellers and the Buyers are able to generate enough momentum to push prices toward a new trend. And the road is blocked on any of the sellers Or buyers are free of that battle, even now. This model is also known as the reinforcement model. Going back to the chart (GBP/US Dollars) we will find that the sellers and buyers, They push prices in any direction. While this happens, the market goes through lower highs and higher lows. And when did it get closer?

With those price slashes, the breakthrough is imminent. Although we don't know whether the price will go up or down, We know for sure that a breakthrough will happen, volatility increases and a strong move occurs in either direction.

To take advantage of this, we give the order to enter the position above the inclined line of low rises (point to buy and enter). The position, or below the italics line of high dips (point to sell and enter a position). Since a breach is imminent, you have to Take advantage of that information regardless of the direction of price movement.

Ascending triangles

This formation occurs when there is an italics line of high depressions, and a resistance level (of a horizontal nature).

This is because there is a price level that buyers are unable to break. But they are constantly paying the price as shown by higher declines.

Descending triangles

His name indicates it, these triangles are the opposite of ascending triangles. Here, the most declining heights follow the font problem.

The lowest line represents the support level which is difficult for the price to break.

In this scenario, the price managed to break through the support level and fell very quickly.

Double Summit

A reflexive pattern occurs after a higher movement that has been extended for a while. Peaks are the peak of the price and result from the price reaching the level of Specific, impenetrable As the price reaches that level, it bounces back from the level a little but rises again in an attempt to test this level again. If the price falls back from the level, then the double peak will be completed.

You will see a double peak formed after a climb. Strong. The second summit was also fortunate to be unable to reach the same level as the first summit. This is a strong indicator that Reflection, lower purchasing pressure. What we do in that case is issue purchase orders below the neckline, waiting for the downtrend.

Looking at the chart, you'll see the price breaching the neckline and then falling sharply. Without a moment that says that The formation of the neckline indicates a reflection in the direction. It is necessary to pay attention to the possibility of this model occurring, especially after A strong rise in prices.