Trends and tendencies

Trends and tendencies


The main provision of technical analysis supports the assertion that the market is evolving directionally: the prices either rising or falling, or are in the horizontal range. Therefore, identification of the trend (trend), or the prevailing price trends is the basis of technical analysis and the key to successful trading.
Species trends
There are three types of trends:Increasing (rising), or bullish trend (uptrend, upward, bullish trend) is characterized by the fact that the lower the price fluctuations of the market rise.

Trend and trend

Line at the bottom of this trend and going through a minimum value, called the trend line.With the increasing trend is important to have a border just below, in which case the bet on a price increase.The intersection of the trend line, which limits the rates below, may signal that the general trend of prices on the rise or waning, or even changes direction. The trend line that limits the prices lower, is called the support line (support line - sup.).
Descending (falling), or bearish, the trend (downtrend, downward, bearish trend) occurs when the maximum price fluctuations of the market down.

Trend and trend

In the descending trend line trend, which limits the price from the top, called the line of resistance (resistance line - res.).If there is a bear market we put on lowering prices, so it is important to limit prices from the top only because the lower the price falls, the better for the player. Intersection, or break through the lines of resistance, warns of weakening trend, or even change it.
Of special interest channels (channel), when the trend is clearly marked at the same time, there are support and resistance lines. Resistance and support lines often are not parallel lines. In this trend makes it possible to predict both the lower and upper levels of their.

Trend and trend

Upper points (peaks) of the graph lie on the price level at which the pressure from the sellers in the currency market exceeds the pressure from buyers of - what price can not grow, in other words, creates a resistance level of price increases. Similarly, the lower points of the graph represent the level at which the pressure from retailers to the pressure put buyers and the price can not fall, ie creates a level of support prices. The longer schedule price remains within the trade channel, referring to his boundaries, the more reliable are these lines. An important role is played by trade volume, especially when it comes to events that occur near the support and resistance lines. If the price "bounces" from these lines at high volume, reliability trend is increasing. Authenticity is verified by breaking a rule change in the price after the breakout of 3% from the previous closing price.The importance of support and resistance lines beyond their original functions. Strong support line, with its breakthrough in the background of a large volume is likely to become a strong resistance line.Conversely, a strong line of resistance, being torn to turn into a solid line of support.
The third type of trend - it is like no trend, ie horizontal (lateral) trend when prices fluctuate in the range of horizontal (sideways, flat market, trendless). For him, too, there are support and resistance lines, but there is no explicit price movement up or down.

Trend and trend
Trend line emerges as a natural result of observing the trend. It is a straight line connecting the lowest or the uppermost point of the price graph zigzags. To draw a trendline, it is enough to have two points through which it is conducted, and one more point for "confirmation" trend. Within a trend supported by the direction and speed (the slope of the graph) currency. A trend line is there until her breakthrough sharp price movement up or down. However, even after confirmation of a breakthrough for him, most likely, followed by a period of consolidation. The sharp change in direction of trend line there is a relatively rare. In the absence of consolidation, the longer it does not occur, the steeper is the subsequent reversal. The trend line and roughly parallel to it a line drawn from the opposite side of the graph form a trading channel. Both of these lines are called boundaries or lines of the channel. Since the market does not move in straight lines and zigzags, the relative positions of the upper and lower points of the zigzag trend creates the market. In addition to the trend lines are classified according to their duration, divided into primary (major) or long-term, secondary (secondary) or medium in length, and small (minor) or short-term. Within the primary trend may take place any number of secondary and small trends. The duration of each of them varies widely. According to Dow theory primary trend is established on the market for more than 1 year. The duration of the secondary trend can be calculated in months rather small - for weeks. Price of foreign exchange even when the most powerful trends do not always move up or down. Traders monitor the spread (direction) the price at certain points on its graph.
There are two typical points of a possible reversal, recorded on a chart as a percentage of the previous movement (percentage retracements):1. By Charles Dow reversal occurs after the price was down 1 / 3 (33%), two thirds (50%) or two thirds (66%) of the last lift up. Price reversal after 66% correction is considered a trend.2. In accordance with the coefficients of a Fibonacci reversal occurs at points corresponding to 0.382 (38%), 0.5 (50%) and 0.618 (62%) of the preceding boom.

trading systems

Mechanical trading systems


The system of "three screens" Al. Elder
The first screen defines the main trend. It does this based on the weekly chart of the MACD-Histogram. If the histogram is reduced, then only consider options for sale. A sell signal would be stronger if the histogram is below zero. When does the upward movement of the histogram, in comparison with the previous - buy. The purchase will be more reliable at a value of the histogram above zero. The tendency to "first screen" like a tide. A tidal wave against better not to swim.
The second screen defines the medium-term trend by using oscillators. Stochastic oscillators are, RSI and other indicators, built on the daily chart. If the first screen shows a bull market, and oscillators are oversold, it is a good signal to buy. By contrast, the weekly bearish trend in the overbought oscillators on the daily chart we see the possibility of selling. Signals a "second screen" - the wave. The system of "three screens" considers only those waves that do not conflict with the tide.
The third screen identifies short-term trend, fixing the price breaks for highs or lows of the previous day. If the price of a new high compared to the previous day, week-long trend of increases, and daily oscillators dipped into oversold territory, it enters a buy signal. If the price makes a new low when compared to the previous day, week-long trend of declining and daily oscillators have risen in the overbought zone, it's time to order the sale. "Third screen" defines the swell of the market.
If you made a deal with the trading system "three screens", but profits are not getting - perhaps the fundamental conditions have changed. Then quickly come up with a recommended market to clarify the situation.
Cautious traders encouraged to keep open lucrative position as long as a week-long tendency to not make the turn. For aggressive traders may also further open positions with each new signal buy / sell on the second screen to the moment of turning a weekly trend.
MTS is also a necessary condition for the "three screen" is a system of risk management. Rule of thumb - place protective stop orders, protecting against loss and to preserve the potential profits of a few pips below the minimal price of the day or the day preceding, if you bought, or a few pips above the very highest prices of the day or the previous day, if you sold it.
"Ray Elder" or "X-ray Market" (Elder-ray)
"Ray Elder" is a development of the "three screens" and uses the principles laid down in it. "Ray Elder" is a system that is designed to measure the strength of bulls and bears at one time.
Calculation of "Ray Elder" is based on the following principles:

    price is an agreement on the cost between the three groups of traders - the seller, buyer and free traders;
    moving average is the averaged value of the agreement;
    highest price is the maximum power of bulls during the analyzed period;
    lowest price is the maximum power of bears during the analyzed period
Elder-ray is composed of three horizontal panels, the first of which shows a graph of prices built on it an exponential average with a 13. When the average is increasing - a sign of the bull market. When decreasing the SS - the trend bearish.
In the second graph is constructed Bullish Force as a histogram. The formula for calculating the strength of bulls:
Bulls Strength = High - EMA, whereHigh - the maximum price for the period;EMA - exponential moving average.
When the maximum price is above average, then Bullish Force is above zero, which confirms the bullish trend. Otherwise, the bulls are weak.The third graph is determined by the strength of the bears (as well as a bar chart):
Force bears = Low - EMA, where Low - the lowest price for the period.
If the minimum price is below the SS, this is a signal of a strong bearish trend. Otherwise, the power of the bears is minimal.
Two types of solutions:
The period of purchase. CC needs to grow and bear power indicator is below zero. The best time to buy is the period when the bears first power indicator falls below zero, and then immediately got up. If the top of the price confirmed by new peaks Bullish Force, it is a good confirmation of the bullish trend. Strong signal will also be bearish convergence.
Period of sale. Sell ​​when the SS is reduced, and Bullish Force is above zero. Bearish trend is confirmed by a parallel decline in bottom prices and an indicator of strength of bears. Strong signal will also be a bullish divergence.
The direction of motion tells us the average of the strategy and approach to the median price - the time of transaction.

Analysis of Basic rules

Analysis of
Basic rules:

    Lowering the volume - reduction of interest in the dynamics of the course, or a change in trend or a temporary stabilization of prices
    Increased volume - increasing interest in the dynamics of the course, or reinforce existing dynamics or the emergence of a new trend of price changes
    Sometimes a gradual decrease in volume is accompanied by sharp changes in price
    The peaks of the volume signals a possible trend reversal
Analysis of indicators, using indicators of
Equilibrium volume indicator (On Balance Volume - OBV)The total value of the daily volume is assigned a positive sign, if the closing price higher than the previous, and negative if it is lower than the previous. Continuous cumulative changes by adding or subtracting the daily amount depending on the direction of the dynamics of the closing prices.In interpreting the indicator it is important to the very direction of the curve, rather than specific targets.If the curve of stops moving in the same direction as the price, there is a discrepancy, indicating a possible reversal.For the analysis of the curve as applicable OBV trend and oscillatory methods of analysis.
Indicator of accumulation (Volume Accumulation - VA)
VA = {[(C - L) - (H - C)] / (H - L)} x V + VA -1, whereC - closing priceL and H - min and max priceV - volume.
The total daily volume takes a positive value only if the closing price is equal to the maximum price of the day, and, conversely, when the closing price equal to the minimum, the entire daily volume gets a minus sign.
Signals:

    unidirectional changes of the indicator and the price of the bull market and bearish divergence in the trend - a trend confirmed
    Bullish divergence and a bearish convergence - the refutation of the trend
VA Index
IVA = (VA 0 + VA -1 +...+ VA-n +1 / (V 0 + ... V-n +1), is equal to the sum of indicator values ​​VA n days, divided by the sum volume for n days.
Signals:

    index greater than zero and is growing - the bull market (buying)
    index is less than zero and decreases - a bear market (sale)
Chaikin Oscillator.
CHO = MA (VA, m)-MA (VA, n), wherem - mean a greater order of magnitude;n - a smaller order of the mean.The analysis is similar to the analysis of MACD.
Indicator Accumulation / Distribution (Accumulation / Distribution - A / D)
A / D = [(C - O) / (H - L)] x V + A / D -1, whereC & O - the closing price and openingL and H - min and max priceV - volume.
Meaning and analysis of the indicator is similar to the previous one.
The trend of price-volume (Volume Price Trend - VPT)
VPT = VPT -1 + Volume x (P - P -1) / P -1, whereVPT -1 - previous value of the indicator,Volume - the volume, the amount of changeP - current priceP -1 - previous value for money.The indicator should not only consider the direction of price changes, but the magnitude of this change.
Signals:

    large positive value - the market is overbought
    large negative value - market pereprodannnost
The boundaries of overbought / oversold matched analyst independently.

Oscillators

Oscillators
Momentum IndicatorEach value is calculated as the difference between the values ​​of the price after a certain time interval:
M = P 1 - P 0, whereP 1 - the closing price of the day,P 0 - the closing price of a specified number of days ago.More sensitive to price movement line with a lower order.
Commodity Channel Index (Commodity Channel Index - CCI)Normalizes schedule Momentum, dividing its value by the greatest amplitude achieved:
CCI = [X - SMA (X, n)] / [0,015 x dX], whereX = [Close + High + Low] / 3,Close - closing priceHigh and Low - max and min price for the period analyzed,dX = Sum [X i - SMA (X, n)] / n,n - the length of the period,X i - value of the price at time i,SMA (X, n) - moving average for period n.N = 8 is recommended.
The rate of change (Rate of Change - ROC)In contrast to the Momentum values ​​are calculated as the difference is not as well as the quotient of the closing prices of the day on the closing price the previous period.
Relative Strength Index (RSI)Designed by J. Wheeler Jr.. In 1978, at the present time is one of the most popular oscillators.
RSI = 100 - [100 / (1 + RS)], whereRS = AU x / AD x,x - number of days in the period of analysis (the procedure RSI), it is recommended 8AU x - a sum of positive price changes for the periodAD x - amount of negative price changes during the period.The recommended order - 8 (in any time period). Although the author has used in his calculations, the order of 14, because the primary use of it seen on the daily charts.
Stochastic lineStochastic goal - identifying price trends and cornering by monitoring the placement of the closing prices in the last series of peaks and bottoms.The method of observation of the following fact: when prices rise, their daily closing levels tend to be closer to the value of the maximum. If prices continue to rise, and daily closing prices begin to fall, it signals the readiness of the tendency to turn.When prices fall, all the same thing only for the minima.There are three stochastic lines:% K,% D,% R. They reflect the location of the current closing price relative to the selected time period.
% K = 100 [(C1 - L5) / (H5 - L5)], whereC1 - current closing price,L5 and H5 - the lowest and the highest levels over the past 5 days.
% D = 100 CL3 / HL3, whereCL3 - a three-day sum of (C1 - L5),HL3 - a three-day sum of (H5 - L5).
% R - a modified formula for the% K.
Features analysis of Stochastics:

    the intersection of% K and% D may be a good sign for the transaction
    two in a row in different directions of their crossing they say that the first signal was premature, and possibly the resumption of the previous one, with a strong price movement
    signals from the zones of overbought (oversold) to% K and% D - 70-80 (30-20), for% R - 90 (10)
    fast line (% K) crosses the slow (% D) from the bottom up - buying
    Fast crosses the slow down - for sale
    the directions of both lines are the same - give direction to the dynamics of the trend
    lines in different directions - an incomprehensible situation

Average on RSITo analyze them using the same methods as in the analysis of average price chart. Advantage - the limited fluctuations RSI and opportunities arise timing signals from the average of RSI, compared with the signals from the middle of the schedule of prices.
RSI and Momentum on the averageThey are used for very short periods of time (no more than an hour). The reason for constructing such oscillators - the elimination of random fluctuations in the prices that most strongly affect the calculation of the oscillator for short periods of time.
Oscillator (Oscillator - OSC)
OSC = SMA (P, m) - SMA (P, n), whereSMA (P, m), SMA (P, n) - moving average, m> n.

    detects the movement of prices in a given period
    On the one hand, removes all short-term price fluctuations, and, on the other hand - remove long-term trends
Example.If we are willing to trade time price fluctuations, we choose a short period of one hour, and as long, for example, the time interval in one day. Subtracting the long-period average, we lose information about the average level, which is different from one day to another. Large positive values ​​of the indicator OSC mean high prices in relation to long-term trend, and give a buy signal. Conversely, large negative values ​​of the indicator gives a signal to sell.
Classical signal a bullish divergence (bearish convergence). At the same time to explicitly confirmed bullish trend intersection OSC bottom-up through zero is a signal to buy (more than an early signal to the indicator turns in the direction of the dynamics of the trend is below zero). And vice versa for a bearish market.Signals against the trend - a reversal indicator of overbought and oversold zones.
Index of force (Force Index Short Term - FI)
FI = VolumeToday x (CloseToday - CloseYesterday) / CloseYesterday, whereVolumeToday - the volume of prisoners today dealsCloseToday and CloseYesterday - the closing price of yesterday and today.
For the short game is better to use the average FI with the order of 2 for long - with a 13.
The main signals - the direction and the ratio of min and max values. The direction of movement indicates the direction of the transactions and the ratio of highs and lows - because the current trend.
Characteristic signals: convergence / divergence.

    signal to buy - the average of the indicator is below zero when the bull market
    sigpal for sale - the average of the indicator is above zero at the bearish trend

Index Cash Flow (Money Flow Index - MFI)
MFI = 100 - [100 / (1 + MF)], whereMF - the ratio of total turnover for the periods of rising prices to the total turnover for the days of falling prices.
Regulation analysis of oscillators
Signal

Actions trader

ConfirmationValues, the following
max for the oscillatormin for the oscillator to deal warningDownUp
at least twoIntersection with a given boundary valuestoplowerIt's time to dealSalesShopping
at least oneIntersection with the center may be too late
at least two

    in a bull market values ​​of the border should be lifted, and a bear - lower
    good results analysis oscillators gives fletovom market
    if in a strong uptrend oscillator will show down, and the price will not go in that direction, the stronger will continue to trend upward, with a strong trend down - on the contrary
    change of trend in the oscillator may greatly deceived, and the first to warn
The interaction of oscillators with the schedule of prices (here and below the top price in the figures, and an oscillator from the bottom)
Bearish convergence

средний сигнал	слабый сигнал	средний сигнал
Если конец осциллятора близок к верхней границе, то возможно понижение цены; если - к середине значений, то возможна стабилизация курса.	Ожидаем стабилизации цены с последующим изменением тренда.	Если конец осциллятора близок к верхней границе, то возможно усиление тренда; если - к нижней, то скорее произойдет повышение; если - к середине, то равновероятно и падение, и стабилизация цены.

Бычье расхождение

средний сигнал	сильный сигнал	средний сигнал
Если конец осциллятора близок к нижней границе, то возможно повышение цены; если - к середине значений, то скорее понижение курса.	Ожидаем стабилизации цены с последующим изменением тренда	Если конец осциллятора близок к нижней границе, то возможно усиление тренда; если - к верхней, то возможна стабилизация курса; если - к середине, то равновероятны и рост, и стабилизация цены.

Параллельность

средний сигнал	средний сигнал	средний сигнал
Сильный тренд вверх	Ожидаем изменения тренда	Сильный тренд вниз

concluding remarks
When working on a strong trend to treat the oscillator signals with the utmost care, while false signals of the oscillators tend to talk about strengthening trend.
If the trend is upward, then most of the time oscillators are overbought, if on the contrary, in the oversold territory.

Chart Patterns

Chart Patterns

Reversal.

"Head-shoulders" - confirms the trend reversal

хорошая позиция для открытия вниз	хорошая позиция для открытия вверх

Features of the figures:

     if the bearish trend appears the figure of "inverted T-P", the higher second arm enhances the signal fed to it
     if the bull trend in second arm, "Mr. P" below the first, it also amplifies the signal
     to recognize shapes, "Mr. P" to compare its performance with volumes


Triple and double top - bottom - confirms the trend reversal

хорошая позиция для открытия вниз	хорошая позиция для открытия вверх

хорошая позиция для открытия вверх после получения 1 подтверждения

Among the triple and double tops, especially the bottoms come across a lot of false signals, which are eliminated by the parallel analysis of convergence / divergence in the case of oscillators, as well as with indicators of volume.

V-shaped top and bottom ("thorn")

The model is formed, usually after rapid previous trend. On the chart a lot of gaps, are virtually absent levels of resistance / support. Reversal is formed as a key date, or the island of fracture. The only signal for the trader can be a breakthrough very steep trend line.

The figures confirm the continuation of the trend

triangle

Chart Patterns

General rules of analysis of triangles:

     in a classic triangle should be five lines from the entrance to the triangle (three down and two up, or vice versa)
     If the price is above, then the stronger position to continue the downward price
     If the price is lower, the stronger position to continue the upward price
     if the angle of the triangle is pointing up, the price will go up soon
     if the angle of the triangle is pointing down, the price will go down soon
     more lines in a triangle and closer to the top out of it, the stronger and more significant will be the price dynamics in output, but if the output happens in the last quarter, the subsequent movement will likely be sluggish and unstable
     breakthrough will occur, most likely, between half and three quarters
     apex of the triangle will appear in the future level of support - resistance
     volume decreases as the triangle formation, increasing sharply after the break
     after breaking in the direction of the price will break through at least a distance equal to the height of the triangle in the greatest part

"Flag"

"Flag" is formed, usually after rapid previous trend. It looks like a rectangle, directed against naprvleniya trends. "Flag" occurs usually in mid-motion. Volume, as the formation of a "flag" drops, increasing sharply after the break. The formation of leaves from 5 to 15 bars.

"Pendant"

"Pendant" is very similar to a small symmetrical triangle. Volume, as the formation of a "pennant", falls, increasing sharply after the break.

wedge

Wedge - a model of a small triangle, tilted against the direction of the trend. If the bias in the direction of the trend, it is most likely to break the trend. Breakthrough usually occurs between 2 / 3 to 1.

Прямоугольник

The rectangle is very similar to a triple top. To determine the type of oscillator is used produced figures and analysis, analysis of volumes pomoschbyu. After breaking in the direction of the price will break through a distance not less than the height of the rectangle. The boundaries of the rectangle in the future will be good levels of resistance - support.

Dow Jones Theory

Dow Jones Theory

The first mention of the possibility of forecasting future price movements based on the results of the previous trading emerged in the late XIX century in the Wall Street Journal. This article was already notorious Charles Dow - the creator of the popular current of the Dow - Jones. The theory, created by Dow, survives to this day and is called: "Doe". The method was developed and improved by up to 70 years of XX century. With the advent of computers has become easier not only considered, but calculations and display in graphical form.
Proistekaya directly and indirectly from the Dow theory, technical analysis has incorporated the principles and concepts of this theory as "directed nature of price movements", "prices into account all known information", "confirmation" and "difference", "The volume as a mirror of price changes 'and' support / resistance. "And a widely spread industrial index DouDzhonsa - is a direct descendant of the Dow Theory.
Price Forecasting in the technical analysis based on the previous auction. From these indicators of trading the greatest interest are the two.
The first - the price of assets. Prices are understood, their values ​​are easy to find the private trader. This makes the price of the most important indicator for the job.
The second - volume of trades, that is, the total number carried out during the time period of interest transactions, expressed in any currency. These values ​​are harder to find, but possible.
On these pillars - the price, trading volume - based theory of technical analysis. Like any theory, it has its postulates. The three basic read as follows:
1. Movement in asset prices into account all factors. This means that the price reacts to all external factors, whether the statement of the American president, about the level of inflation in Mexico or a hurricane in California. According to Dow theory, any factor that may affect the supply or demand, always will be reflected in the index (the price). Of course, earthquakes and tsunamis are unpredictable, but they are instantly recorded and reflected in market price movements.
2. Prices move directionally. This means that price movements are not chaotic, but follow a certain direction. The direction is called a trend. Trends come in three varieties: bull (up), bear (down) and lateral (or downward, or appreciation).
3. History repeats itself. "The key to understanding the future lies in the study of the past." The fact that a certain configuration on the graphs of prices tend to appear consistently and repeatedly, and in different markets and different time scales, is a consequence of certain behavior patterns characteristic of the human psyche. There are three different approaches to the analysis of graphs. The first - a superficial, subjective. It is based mainly on intuition. This is the usual "spear." It does not require any rigorous analysis, no justification, therefore, the majority of traders working on this very simple level. Unfortunately, for the sake of simplicity and convenience they sacrifice logic. The second approach involves the creation of market indicators that help identify oversold and overbought market. Although many traders, at least partially use this type of analysis, they are usually limited to the most well-known indicators and follow generally accepted ways of interpreting them. In such work is not creative. These traders do not try to create your own indicators or improve existing ones. In addition, they are often associated with fancy LEDs exaggerated expectations and do not notice their shortcomings. The most effective and valuable is the third approach - the development of trading systems, capable of generating signals for buying and selling. However, not all analysts have a sufficient level of education, experience and desire to constantly hone their skills.
Initially, the principles set out in Charles Dow, were used to analyze them created by the U.S. indices, industrial and railway. But with the same result, most analytical findings can be applied and the Dow in the financial markets.
The main provisions of the Dow Theory:
1. The indices take into account everything. According to Dow theory, any factor that could somehow affect the supply or demand, always will be reflected in the index. Of course, these events are not predictable, however, they are immediately taken into account by the market and affect the dynamics of the indices.
2. In the market there are three types of trends. With the rising trend each subsequent peak and decline in each successive higher than the previous. If the downward trend each subsequent peak and decline is lower than the previous one. With each successive horizontal trends peak and decline is located approximately at the same level as the previous ones.

     

Dow also pointed out three categories of trends: primary, secondary and minor. The greatest value he attached to it the primary or major trend that has lasted more than a year, sometimes for years. The secondary or intermediate trend correction is relative to the main trends and usually lasts from three weeks to three months. These interim amendments ranged from one to two-thirds (often half) of the distance traveled by the prices during the previous (major) trend. Small or short-term trends do not last more than three weeks and is a short-term fluctuations in the intermediate trend.
3. The main trend has three phases. Phase one, or the accumulation phase, when the most forward-thinking and informed investors start buying, because All adverse economic information has already been taken into account by the market. The second phase begins when the game includes those who use the techniques of following trends. Economic data is increasingly optimistic. The trend is in its third or final phase, when the action takes the general public and the market begins boom, fueled by the media. Economic forecasts are optimistic. Increases the amount of speculation. Here there are informed investors who are "built up" during the decline of the previous trend, when no one wanted to "accumulate," eventually "spread." Trends come to an end.
4. Indices must confirm each other. Here Dow was referring to industrial and railway indexes. He believed that any important signal to increase or decrease in rate in the market must pass in the values ​​of both indexes.
5. The volume of trade must confirm a trend. Volume should increase towards the main trend.
6. The trend is valid as long as not filed an explicit signal that it has changed.

Types of charts

Types of charts


The easiest way to analyze price changes - a look at a graphical representation of the changes. There are several different types of price charts. To display price fluctuations tend to use charts, other than a simple line. They are called charts (chart). Common to all the graphs is that the horizontal axis (abscissa) is measured time, while the vertical axis (ordinate) - changes in prices.
The time intervals for this are as follows:

• Weekly (Weekly)• Day (Daily)• 6 - All (6 Hourly)• 4 - Local (4 Hourly)• 2 - All (2 Hourly)• Time (Hourly)• 30 - - minutes (30 Minutely)• 15 - minute (15 Minutely)• 10 - minute (10 Minutely)• 5 - minute (5 Minutely)• Tick
Types CHARTS:
Tick ​​Chart (Tick)The most detailed information about price dynamics gives a tick chart showing each new value of the quotation. Unlike other chart technical analysis, it is not tied to a fixed time axis. It every price movement is accompanied by vertical displacement of a small standard step across. When an active market for a specified period of time is a lot of price movements, with active market quotations are updated infrequently and for the same period of time is rendered a bit "ticks."

Line Graph (Line chart)

If we construct the points corresponding to the closing price for each time period and to connect them by line segments, we obtain a broken line, which at an appropriate scale and is visually perceived as a smooth curve.
A simple line graph can not reflect all the data on changes in prices. But sometimes, he still needed. This happens when there is little data, or when they do not change over time. The main disadvantage of this chart is that you can see it on the price movement during the day.

The column chart (Bar chart)
The most widely used and relatively simple method of graphical analysis of prices - the column chart or bar chart (Bar chat). Column reflects the price changes over time.

The histogram mark the following four important points:
• the highest (high) and lowest (low) prices in a given period of time, which connect the vertical line;• the opening price (open), note that a short segment of a horizontal line directed to the left;• the closing price (close), which mark a short segment of a horizontal line directed to the right.

Sometimes this type of chart is also known as Rod. The opening price is not important for technical analysis, except when the discovery is made with "." Under the "window" means the price gap between the extreme values ​​of the price of the current and previous trading session, ie, when the opening price of the current session above the previous closing price in an uptrend, and vice versa: the opening price below the current session - in a downtrend.The obvious benefit is the ability to see the histogram on it all the prices within a given unit of time. The most popular of these is a one-day bar chart, followed by a week. You can choose any other time intervals. However, despite the fact that this graph represents all four rates, it is not without a drawback. During the interim period rates have changed within the column evenly. In what - the price gaps trading volumes were significantly greater than in others. Therefore, the thickness of the column should not be uniform. But the use of non-uniform thickness column chart will be very difficult for the visual analysis. In addition, the visual perception of column charts depends strongly on the density of the graph and the length of the visible period.
Candlesticks (Candle Stick)
Candlesticks are a close resemblance to the histograms. They also include four major prices: high, low, open and close. In addition to the usual information, candlestick chart yields a variety of specific interpretations. This is possible due to ease of visual observation of this schedule. Candlestick analysis is a form of technical analysis. It is believed that the price chart, ideally for visual analytics - it candlestick, and nothing but them. Candles, "" from the screen, which should go to the course. Their combination is unforgettable, and remain long in the memory. Over time, continually observing the living costs in the very form of candles, just a chart and a pair of trend indicators and oscillators under the graph, you see the future prices for a moment before it happens.What is the candlestick chart offers that do not exist on the west column one graph? With respect to display the actual data - nothing. However, for visual appeal and ability to more easily observe these relations, the candles are of crucial importance. They provide a quick overview of the last trading psychology.A thick line of candles called the body (dzhittay). It represents the difference between the opening and closing days. When the body is black, it means that the session closing price was below the opening price. Believe that the black color - it is "bearish" color. If the body is white, it means that the closing was above the opening level. It is believed that the white color - it is "bullish" colorThin lines above and below the body are called shadows. The shadows represent the extremes of the sessions. The shadow above the body is called the upper shadow (uvakage) and is the top price for a certain period, the shadow below the body known as the lower shadow (shitakage) and represents a bottom price for the period. Some Japanese call the upper shadow of hair, and the lower shadow - the tail. Japanese use red instead of white to show the 'hollow' candle. But since when copied, it merges with the black, the Western practice caught on the map of empty body candles - unpainted (white).

Technical Analysis

Technical Analysis


Forecasting foreign exchange market is not only on the basis of any or several of the fundamental factors, but also with the help of various tools of technical analysis.Technical analysis is the analysis of market movements over the previous periods. Recently, more and more traders to attach primary importance to the methods of technical analysis.
Basic tools:- The graph bars;- Graph <noughts and crosses>;- Candlesticks;- Oscillators;- Moving average (Moving Average - MA).
The controversy about the usefulness of technical analysis of markets as well dominates the minds and as inexhaustible as the dispute about the primacy of matter. One can understand the painful and uncertain in a society where to find the support it gets from the gloomy corners of memory beliefs, the failure of which, apparently, had long been in need of argument. Where are offensive, when the economic and journalism practice, the banner which should be rational, are beginning to pay attention to exceptional approaches, at least in academic circles considered to be a logical suspect. Of course, one could argue that the public needs to know about everything, including alternative methods. But when in the professional literature has not dried up the flow of publications, with a sincere reverence responding about technical analysis;Investment consultants presented with the investors as it is perhaps the only sound method of market research;Developers of software investment is proud to warn about the implementation of the new version has more years of proven techniques;Almost nowhere says that a reasonable application of technical analysis requires a considerable number of reservations, the most iron patience comes to an end.According to one of the most widely used definitions, technical analysis (TA) - a set of methods to determine the right moment to buy or sell any assets (usually securities or currencies) on the basis of analysis of price trends and trading volumes. The main objective - to identify the signals that would help predict the change "moods" of the market.

Typically, methods of TA based on the previously observed "patterns" of the dynamics of market parameters, as well as the psychological characteristics of the trading community. TA Followers believe that the changes in the market for only 10% are subject to logic, and by 90% due to psychological factors. Therefore, predicting, as in the mass market participants will act, or "mob" who mastered the TA, "the poet" can achieve brilliant investment results.TA is closely related to the construction and study of various charts and graphs, so it is often called the Chartists agents (from the English chart - chart, not to confuse the British proletarians, the followers of the revolutionary movement in the mid-XIX century). With many typical "picture", indicating, according to the Chartists, the imminent occurrence of a particular market situation, they try to play on a short-term price movements, neglecting, as a rule, long-term objectives, If we consider the method of the TA in its pure form, its followers do not care what industry or firm is under investigation action, as long as she gave those same signals.A new strong impetus to the development of the TA was in an era of global computerization. Plotting and complex calculations of indicators, indexes, and oscillators, which previously had to be done literally in the display. No wonder Arsenal (and aplomb) Chartists it has grown significantly in recent years, a new generation of technology added to them a lot of charm and a kind of mysticism.
Oddly enough, but even the most sophisticated methods of technical analysis is usually not in any way be justified, except truisms like "history repeats itself". By opening a phenomenon Chartists met him outside, not at all trying to find him an explanation. Moreover, among some representatives of this theory are of the opinion that the mechanism of action of the theory are of the opinion that the market mechanism of action is incomprehensible, in other words, we'll never know "why" we can only hope to understand the "how."
Nevertheless, we can not completely deny the technical analysis in the presence of certain basement (mainly this concerns the stability of trends). Firstly, it is quite natural idea to play on the prejudices and the herd instinct "of the crowd." If, for example, we know that non-professional investors in this situation, do so-and-so is possible in principle to predict the direction of the market, for example, any shares may stimulate its acquisition, which leads to further strengthen the trend. Economists call this effect self-fulfilling prophecy, ie, self-fulfilling expectations. Second, information is always distributed evenly and is first in some market players (insiders) and then the other. Often it is the process of diffusion of new information causes a further development of the emerging trends. Finally, if we talk about changing the direction of market movement, the Chartists argue that people tend to remember the price they paid (or would be willing to pay) per share. With this argument (and only!) Became the generally accepted notion of justified "resistance level" (support) and many classical forms of technical diagrams: implementation of the previous price high (or low) forces the investor to sell (buy), which should lead to a reversal. But against these (rather naive, by the way) a lot of explanations can be advanced no less compelling reasons. First, a purely psychological factor as the professionalization of markets means less and less. Second, the trend may change and often actually changing much faster than the analyst is able to read at least some signal. Third, even assuming that the effective methods of technical analysis, the more people enjoy it at the same time, the lower their chances to capitalize. Fourth, with the spread of such practices among traders have an incentive not to wait for the appearance of direct technical signal, and try to act in advance. This can not distort the relevant principle of technical analysis, signal integrity violation (of course, again, if you believe in its existence). Finally, if someone is confident that tomorrow the price should rise by 20%, the liquid market, where prices reflect information almost instantly, it will inevitably happen today. Realizing the weakness of their position, the moderate Chartists go back down and called technical refinements complement the elements of fundamental analysis (ie, studies of "internal" value of the asset). True, it is not clear how increasing the value of such a symbiosis through proper TA.
It's time to move on to implicitly postulated basic principle of Chartism, to which all of the above simply pales: the market has a memory, or, if you will, the inertia, ie knowledge of price dynamics in the past can help predict the future. In particular, it is believed that if the price rose yesterday, today it is more likely to rise than fall (it is the ideology of the so-called signal strength of the market). The position is exactly the opposite of economic theory: the prices are subject to the so-called random walk (random walk). Simplifying, we can model the price process as follows: at each time throws a coin and, depending on the result of throwing the price can move up or down with equal probability. Thus, each next step is totally unpredictable in terms of what happened earlier.Initially, as a popular illustration of the random walk route drinkers cited in the open field. This route is irrational and unpredictable.
By the way, if by means of experiments to construct a random price series, then they can make any favorite Chartists form. Of course, from this point of view, technical analysis is completely absurd. Note that unlike the other uncertainties present dispute is easily resolved with a simple statistical test, calculating the autocorrelation of prices with different time lags. If these autocorrelations for some time periods will be significantly different from zero, there will be only sprinkle ashes on his head and recognize the absolute truth of the Chartists. But alas, they, for the vast majority of markets it is not. (In fairness, we note that the random walk hypothesis is also often can not find direct evidence, but not denied. The question of a more complex non-linear dependence is still open).By the way, if the computers are armed to the teeth, the Chartists, they also become an invaluable tool for exposing the TA. Posteriori estimates have helped to expose dozens of so-called methods, which are showing remarkable results in some periods of time, completely denied to others.
Besides the logical and empirical arguments against the TA, there is the "life". Many can convince the following fact: although in principle at the expense of successful operations in the financial markets work and professional beliefs, among them very hard to find Chartist. It would seem, people familiar with the recipes win, must first enjoy them yourself, but do not share their invaluable knowledge with others: in short, if you are so smart, why are so poor?The sleep of reason produces costsThere certainly astute reader asks: "If the situation is really all so hopeless for the TA, what then caused his undying popularity?"First of all, no one argues that technical analysis is absolutely sterile and will never make a profit. No, in fact so often the case, but, unfortunately, no more than using a simple investment strategies (especially if you consider taxes and fees). This conclusion is also repeatedly confirmed empirically.
Secondly there are reasons to psychological effects.
1. TA is simple, is extremely varied (if not raznoshersten) and maximum algorithmized. This provides ease of application, persistence approach in general in the refusal of its individual components and removes the analyst responsible for any errors.
2. TA - is the straw, which is enough for investors, desperate to understand the mechanisms of functioning of financial markets. This factor is especially significant if you are unavailable adequate basic information and / or the inability to treat her.This is sufficient to effect the technical analysis in some sectors of the market is constantly growing. Thus, according to polls Euromoney, in 1979 90% of forecast agencies in investigations of exchange rates were based on fundamental analysis, and ten years later more than a third of respondents used only the TA! According to the Bank of England, 90% of the leading dealers of the foreign exchange market in London in one way or another use of TA.In general, the foreign exchange market is the least among economists 'rational'. One reason is that the major operators in this market are central banks that are in active foreign exchange intervention, often caused by non-economic (ie, irrational from the standpoint of fundamental analysis), considerations. There are other factors impeding the implementation of the price of "efficiency" of the currency market, resulting in the exchange rates at times deviate significantly from the values ​​dictated by fundamental factors.
In such circumstances, the use of techniques to forecast changes in exchange rates is desirable. The more investors believe in the technical signals, consistent with them, the better the work we have already noted the effect of self-expectations. And although in the long run exchange rates and quotes undoubtedly gravitate to the fundamental values, even the most rational investor can not ignore the presence in the market Chartists.In fact, it has two fundamental ways to profit: with the "crowd" to exploit short-term trends, using the methods of technical analysis, or play against the market, hoping to reverse roll back prices. Most chose the first option. But why rational investors that focus on long-term fundamental criteria, do not try to beat the big acting irrationally Chartists, just as the former George Soros 'punish' the BoE? Unfortunately, this requires a lot of money, the ability to bind to relatively long periods of time, and finally, every big game fraught with serious risks. Meanwhile, the majority of leading institutional investors and to the recent scandals (Barings, Daiwa) prohibit its traders to keep an open foreign exchange position more than a day, and more recently by simply vigilant monitoring of their actions. Limited funds, risk aversion and short-term orientation of the fundamental forced investors - that's where the invincibility of the reasons lie more Chartists.The most notorious cynics believe that the TA has survived mainly because it leads investors to work actively on the market. A further operation - it is unnecessary brokerage fees. Abuse also technical analysis is easy if only because all of voluptuousness pounce on naive chart, invented by old Dow hundred years ago. This is not surprising: they (and others like them) with the manic persistence reproduce all books and pamphlets. But it's like to blame medicine for what its medieval methods were powerless to halt the plague and cholera.
To understand the current state of technical analysis, not all turns out. First, the economic base for this (perhaps, and technical) education is not enough. Need to be a mathematician, preferably higher than average (surely understand the synergy, the theory of pattern recognition, neural nets, etc.). Second, the successful functioning analyst will never tell you about his methods: he earns them money, but because they are unknown to the general public. Widely published in the main losers (again compromising the technical analysis). Autocorrelation in the price series, there is usually no. But if we use the analogy of a drunkard, he, in spite of all their reels, at least in 90 cases out of 100 in the morning arrive at the home (that would be a prediction accuracy on the market!). White noise (the embodiment of a random signal), and chaos - is not identical concepts. In the second case there is no autocorrelation, and the process is quite predictable. However, even when the random walk is not lost, there are means to this case. Chances of success are greatly enhanced if you do not take on important task - to predict the quotation (for some reason, everyone is waiting for the analyst to precisely this), and restrict the elaboration of conduct (buy-sell).