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Technical Analysis OverviewThe investment decision is based out of two different ways: Fundamental Analysis: Analyzing a company's financial statement Technical Analysis: Understanding the market sentiment behind price trends Technical Analysis The study of statistical trends, collected from historical price and volume data, to identify opportunities for trade. Assumptions of technical analysis Market discounts everything History tends to repeat itself (psychological) Price moves in trend (reflexive) Trend A trend is the overall direction of a market or an asset's price identified by trendlines. Three possible trends: Uptrend: Asset going up, making higher highs or higher lows Downtrend: Asset going down, making lower highs or lower lows Sideways: Asset trades in horizontal channel Technical Analysis considers: (Basics of Technical Analysis) Price Chart Patterns Volume-Momentum Indicator Oscillators Moving Average Support Resistance levels Movements are not linear, the price will face resistance as it goes up or support as it goes down. -‍Resistance: Level where an uptrend can be expected to pause or rebound due to a concentration of sellers. -Support: Level where a downtrend can be expected to pause or rebound due to a concentration of buyers. Technical Indicators broadly serve three functions to alert, to confirm, and to predict. There are two types of indicators: Leading Indicator: Leads the pice, generates a signal for trading opportunities. Eg. Oscillators i.e. RSI, CCI, Stochastic, Williams %R, Momentum, etc. Lagging Indicator: Follows trends and patterns, reduces the risk in exchange for missing early opportunities. Eg. Moving Averages, Bollinger Band, and MACD. A few myths about Technical Analysis: TA is only for short trading or day trading- TA can be used in all time frames, from 1 minute monthly charts TA has a low success rate- Solely TA can give you profits if used effectively Technical Analysis is quick and easy- Continued success requires in-depth learning, practice, good money management, and discipline Ready-made technical analysis software can be helpful- Such software may provide insights about trends or patterns but cannot guarantee profits, use of backtesting is necessary TA can provide price predictions accurately- TA is about probability and likelihood, and not guaranteed thereby price ranges can be predicted The winning rate in TA should be higher- Profitability does not depend solely on win-rate, it also incorporates risk-reward ratio Limitations of Technical Anlaysis Tend to give mixed signals when used in isolation, confusing traders TA is all about probability and signal cannot guarantee a successful trade even after thorough analysis Often technical analysts use indicators in different methods and may form a biased view regarding the same stock Many a time the technical signal may lag, and by the time proper signal is generated it is possible that the trade might be over A single trading strategy may not work in all scenarios as markets tend to be extremely dynamic Few Trading Mistakes Beginners Make: Starting with real money The best way to get acquainted with trading rules is to have a demo with virtual money before investing in real money, you can perform paper trades on Mudrex Not examining situation by yourself Make your own strategy, test them on the Mudrex platform, and then follow the same plan to trade by understanding things on your own Inevitable Losses Set risk limits for yourself and trade accordingly and accept the losses you face Margin Trading in the beginning It is not recommended to margin trade until and unless you understand the risk completely as crypto trading is rewarding yet risky Following the herd Before making a start with real money, make a set of rules which needs to be followed and have stop losses to limit the loss incurred on your trade ---------------------------------------------------------------------------------------- If you find the post useful, please like and share our ideas with the community! - Mudrex
COINBASE:BTCUSDEducation
by Mudrex
19
My favorite indicatorsIndicators. They make us feel good, they comfort us, we love to expect too much from them then call them useless when they fail to predict the future. Or at least some people do. I myself find indicators comforting, or should I say they bring me relief. They can make every thing smoother, they throw numbers at us. The number is either above our threshold or below, the answer is binary. They give us certainty which is something we all crave in this seemingly random continuous dynamic flow of prices. I am going to start with the indicators I always use, and then present a few of my favorite ones and describe what they do and what I think of them. 1- Fibonacci Sometimes it gets called an indicator, sometimes it does not. Indicator or not there is not 1 buy or sell I do that does not involve a retracement, extension, or at least the measuring tool. I trust my eyes alot, but if I was to trust them to know if we are at 50%, more, or less, my judgements would be all over the place. The definition of a fib retracement that is given is a tool that allows analysts to find areas of support. It helps me see where we are and where to enter a trend. 23,6% and below is too early for me, 38,2% is often a nice one. Fib extensions let me see how far we really have gone, and helps with finding targets, or when to look for reversal. Depends on the context on various timeframes, this includes alot of things, depends my goals, and the pair or commodity. 2- Average True Range (ATR) I use this one all the time. This indicator measures how much the price has been moving in the past specified number of candles, including gaps. "It was created to allow traders to more accurately measure the daily volatility of an asset by using simple calculations." I want to know how volatile the market is to help find out how "active" the pair is and other things, and to help define stop loss, entry, target. If I am looking at a trend on the H4 and D1 timeframes and I want to ride it I will not want to buy a pullback of 1 H1 ATR. And target more than this too. It can also be used to note how expensive - in spreads - a pair is: if the spread is 20% of the daily ATR, it will be pretty hard to day trade it. Now, the ones I do not use often. a- Moving Averages Moving averages are indicators that go on the chart and show what the average price for a certain period & timeframe is over time. The smooth out noise, and provide indications to determine what the direction of the trend is. There are several types of moving averages: Simple, Exponential, Smoothed. I do not use them. First of all my eyes are trained to detect trends and find what I want to see in the price quickly. Second, I am interested in vertical moves, both for going with or against the trend, am I so picky that the price clearly is past MAS. Third, once I identified something I like I will do a full analysis of it, very detailled, precise, using MAS would be ridiculous. b- Relative Strength Index, MACD, and Stoch Ah one of scammy "vip educators laptop on the beach lifestyle" & novice investors favorite. Those momentum indicators show strength, with alot of lag, and poor precision, the MACD also has additional info I will not get into. Some bad unprofitable market participants use it for "oversold" readings, meaning they will consistently buy in downtrends. I look at them sometimes mainly because I think they look good. They look "professional", and they can be conforting, seeing divergence triggers the rewarding center. But I would not seriously incorporate them in my activities. c- The Commitment of Traders It is a report that shows the open interest of participants in the futures market. A simplified version such as in the example below can help make decisions to buy long or short contracts. While imperfect (a big hedger with a small speculative position has all counted as "commercial") and general, it can help with one's study of a commodity. For example, gold was over-shorted at the bottom in August 2018. d- Average Directional Movement (ADX) This indicator that was designed for commodity daily charts can be used for about everything, and it shows the strength of a trend. It does so by measuring the amount of price movement in a single direction. Wilder suggests that a strong trend is present when ADX is above 25 and no trend is present when below 20. I think it is better than the RSI or worse Stoch & MACD. In particular in the following example with the smoothed version (25 DI length), otherwise it can be all over the place. I see how it could be used with an alert (when value > 25) to warn an investor a trend might be happening. Also to help filter consolidations many want to avoid, if the eyes are not trained yet to a naked chart, or if the investor is not disciplined. e- STDEV & Implied Volatility Standard Deviation is a statistical calculation used to measure the variability. Implied volatility is a metric that captures the market's view of the likelihood of changes in a given security's price. The VIX is a market index that tries to project the expected volatility (downwards because that's all they care about) in the stock market. I do not care much about those values. ATR + Fib + Measuring tool etc are better. f- Bollinger Bands These bands envelop the price using a moving average (20SMA) and standard deviations away from it. "When the bands tighten during a period of low volatility, it raises the likelihood of a sharp price move in either direction." It is supposed to help visualise tight periods before a big move. And the price often stays between the bands (that's not very helpful). Sometimes when the price really gets tight with BB it really hits the eyes (Bitcoin), the small range and then the massively expanding one. I do not really see the use for it. Bollinger Band users blind much? I have no use for them but they sure look pretty. g- Volume for Stocks & Crypto Good luck using volume with Forex. Volume tells us how much activity has happened. Did the price go up with only a few buyers? Or were there a whole lot of them? Is a support strong: Many participants are watching it? Or only a few = not that strong. There is a whole lot you can deduce with volume, but it is not the holy grail either. I rarely use it because the Forex market is OTC and we do not have that data, and with futures, it is rarely that useful. h- On Balance Volume (OBV) OBV rises when volume on up down is bigger than volume on down days. Its creator thought that volume precedes price. It was designed to help detect bottoms with divergence, and spot smart money (big institutions) buying while dumb money (retail) was selling. I doubt it will make the dumb money (that all think they are this special wonderboy) outsmart the dumb money. Retail investors are likely to call bottoms every 2 weeks and chase bottoms and get giga rekt in the biggest bear market ever. Maybe a good idea to go short when there are bullish signals in the future? I can already picture greedy and overexcited "investors" chasing every single "signal" they see. There will be many pullbacks in the big downtrend.
Education
by MrRenev
1
Educational materials nr. 7This article is about Balance Sheet metrics. They are including metrics, which show proportions and structure of the company. Structure of the company include own capital, assets and loans. It can tell also about financial stability of the company too. Equity-to-Asset — relation equities to assets. Show using own resources in producing of the products. Cash-To-Debt — relation cash to debt. If more — that is better. If this indicator is higher then 1, that means, that company can pay her debts more then 1 time. Indicate financial strengh of the company. Debt-to-EBITDA — relation debt to operational income. Helping metric. Debt-to-Equity — relation debt to own capital. Critical meaning — 0,4. This meaning can depend from sector of the company and current expectations and situation of the company. Interest Coverage — relation operating income to interest payments. Indicates financial strengh. If higher — that is better. All of them are important in the complex analysis of the company and her financial stability. If company has good operational results, but not good financial stability and dangerous structure with high ammount of debts, she will not be good candidate for investing.
NYSE:FHIEducation
by ValueInvest_Pro
EURUSD: Long Term Perspective & Trend Analysis hey guys, I know that many of you are expecting a coming bearish movement on a daily on EURUSD. analyzing a weekly time frame though, I want to warn you that the pair has still much space for a bullish continuation. on a weekly, the price is clearly trading in a global bearish trend. spring's covid bullish rally made the market set a higher low and triggered a bullish rally, and it looks like a long term goal for buyers is 1.21 - 1.25 wide supply cluster. this zone is based on 2008'th, 2010'th, 2012'th lows and 2018'th high. in my view, a strong weekly bearish movement will most likely start from that area. however, what makes me extremely cautious is the recent higher low. usually, it is the first strong signal of a coming trend change. if the above-mentioned zone is broken buy buyers, It will signify a long term bearish trend violation and start of a new long term bullish trend. as always we can only speculate about the probabilities of both events. but clearly decision point is close.
Education
by VasilyTrader
10
Fundamental vs Tecnical Aanysis 8.22.20 In this video I am suggesting a free service that might be useful to some traders. My trading is technically based, however, I believe there is value to fundamentals... and I explained this in the video. I think the video is worth listening to... and I describe these relationships using the DXY, Gold, Bitcoin... as it pertains to the fundamental analysis offered by this free service. In your pursuit of a successful trading strategy, at some point part of you will try to eliminate any information that seems superfluous, confusing, or causing loss. It is understandable why many technical traders will eliminate the fundamental component. I am trying to argue the need for balance and the process to take in more information in a way that doesn't create more stress if it is done judiciously. Whether you like it or not successful trading isn't just technical... and not just that, having a broader understanding of markets, even if you choose to be a technical trader( which I am )... will more likely enhance your results with a realistic perspective on your part.
BITSTAMP:BTCUSDEducation
by ScottBogatin
Meet Percy - 'YOUR' new Trading E-Mentor - he's cool......Percy is a great guy... he can be a girl too and you can call him or her whatever you wish. I just chose the name Percy, I think its quirky. :-) BUT .... Percy can help you like he helps me - Let me introduce you to him. He tells me when to enter a trade, when to close a trade, what lot size to use - he helps me stay on track when I feel like closing early (Percy hasn't closed so I shouldn't) he helps me ignore them voices of increasing my risk. Percy works incredibly hard, he has back tested over 4200 trades to help me identify my edge in the market. Percy is simply a legend, I trust him, I have confidence in him and I follow his lead. Get a Percy. Regards Darren
Education
by pow_removetheguesswork
3
Educational Materials nr.5 Net Margin is bigger than Operating Hello dear investors, This article is about rare situation, when net margin is bigger then operating margin. Such situation need to be analyzed well to understanding potential of the company. This happen from external or internal reasons: 1. When company can’t pay taxes and/or have tax benefits. Company will not pay taxes untill she will get net profit as tax benefit. Profit from tax benefit can be holded or payed as dividends. It have good influence on stock growning. In some countries this situation can be because of low or zero taxation. 2. Net profit can be from non-operating activity. It is income from investing activity of the company, selling assets, currency course changing and so on. Company can make her status better in a financial statement. It will seems from big difference between P/E and P/E without NRI. That is mean, that company have most income not from operating activity and is bad signal for investors. Analysis on a BIO case. Net margine is bigger then operating in 8 times. Company has difference between P/E and Price-to-Free-Cash-Flow in 8 times. It means, that declared income does not supported by real result. P/E equality to the P/E without NRI means, that company have income just from operating activity. In this case reason of bigger meaning net margin from operating margin is in taxation. Company does not have cash to pay taxes, so she had tax benefits. She wrote this tax benefits in net income. Cases, when net margin is bigger then operating are rare and need serious research and analysis to understand profitability from investing in this company. Wish you have good investing and big profits, Financial analist and adviser, Valerii Selin
NYSE:BIOEducation
by ValueInvest_Pro
Educational materials nr. 4Hello, dear community. This article is about metrics, which show real finance situation of the company. They are based on Cash Flow Statement. Metrics, based on Income Statement can be unreal, but based on Cash Flow Statement are hard to forge. Describing of them: CFI – Cash Flow from Investing. Calculate with buying-selling securities, emission of bonds and dividend payments. CFF – Cash Flow from Financing. Calculate with buying-selling of company assets. CFO – Cash Flow from Operations. Is the most important in analyzing of financial situation. Calculate with sells, inventory costs, interest payments, taxes and cost of goods sold (COGS). FCF – Free Cash Flow. Is sum of CFI, CFF, CFO. P/FCF – relation price of the stock to FCF on stock. Is metric of overvaluation/undervaluation of the company. Is important near, close meanings of P/E to P/FCF. That is mean, that real activity of company has no difference or little difference from declared results. Price-to-Owner-Earnings – Relation price of the stock to owner earning on stock. Show real activity of the company, unlike P/E. Owner earnings – Profit of the owners of the company. Owner earnings = net profit + depreciation & amortization +/- another non-cash costs – average annual maintenance capital expenses. But even Cash Flow statement do not secure from manipulations. For understanding real situation needs: 1. Exclude tax benefits related to employee stock options. 2. Exclude anomaly big changes in currents assets. For example, it is big changing of accounts receivables, inventories, accounts payable. All this changes tell, that company try to manipulate data to make better presentation of financial results. 3. Minus costs, which needs to support operational activity (taken from CFI). Pros metrics, based on Cash Flow Statement: + Show real situation of the company business + Hard to forge – any changes are seen Cons metrics, based on Cash Flow Statement: - Needs checking and re-calculations This indexes give a possibility to check veracity of financial results. And they complement analysis from Income Statement and Balance Sheet metrics. Wish you have good investments, Financial advisor and analyst, Valerii Selin
AEducation
by ValueInvest_Pro
Educational materials nr. 3Hello everyone, who are interested in value investing. This article is about metrics, based on Income Statement data. They are used for first-look analysis to understanding is this company good for investing. This metrics show over/undervaluation of company. Undervalued companies are good to investing. Description of indicators: PE – relation of stock price to net profit on stock. Indicate over/undervaluation of the company. Her critical meaning depends from sector of economic, in which works company. PE without NRI – relation of stock price to net profit on stock, but do not include unusual profits from non-operational activity (selling part of assets, real estate and so on). If PE without NRI is equal PE – company have profits only from operational activity and is good signal. Forward PE – consolidated meaning future PE from analytics. PB – relation price of stock to the book value of stock. Measure of over/undervaluation of the company. If PB = 1, it is mean, that company have fair value. Usually PB is more than 1 and become 1 or lower only in crisis. PS – relation price of stock to sales/revenue. EV-to-EBIT, EV-to-EBITDA, EV-to-Revenue – another variant of metrics under/overvaluation of the company. Can be used instead PE or with PE. Revenue – Or sales. EBITDA – Income after paying COGS (Cost of goods saled), SG&A (selling, general and administrative expences) and before payment of D&A (depreciation and amortization), taxes and interest rates. EBIT = net profit – EBITDA after payment D&A, taxes and interest rates. Enterprise value (EV) – price of company at absorption by other company. EV = Market Capitalization + Debt + Preferred Shares – Total Cash Market capitalization = shares at market*price of share PEG – relation price of stock to earnings growth on share for 5 years. Indicates market waiting. If PEG > 1, it is mean, that company is overvalued by market and/or analysts. If PEG<1, that mean, that company is undervalued by market and/or analysts. Uses as auxiliary metric. Pros of this metrics: + They give “photography” of company on the stock market + Give a possibility to make comparative analysis with other companies. Cons of this metrics: - Don’t give a valuation of financial health of the company - Don’t give a valuation of structure of the company This negative sites decides by using other metrics. Indicators, based on the Income Statement, are important part of analysis of the company and give understanding of her status at analysis moment and needs of next analysis. But using this metrics needs to use that with other elements of quality and quantitative analysis. Wish You have good investing, Financial analyst and advisor, Valerii Selin
AEducation
by ValueInvest_Pro
Educational materials nr.2 Hello dear community, wish you have good day. As it was in educational materials number 1, for analysis of company actively use metrics. They include calculation financial data from financial statement. This calculation uses to compare with other companies in sector and to compare with history of company. Metrics are part of complex analysis. Sources of metrics can be taken from Morning Star, GuruFocus and other. Bad meanings of metrics do not mean, that company is bad. On metrics have influence external factors and all financial data are based on a last published statement. That is why this indexes are analyzed with financial statements of the company. For example, big debts can be general characteristic of sector. We can make classification metrics as: 1) Based on income statement. Used to understanding overvalue/undervalue of company at moment. 2) Based on Cash Flow statement. Indicator of financial health of the firm. 3) Based on Balance sheet. Useful when you need to understand structure of the equity, assets and debts – indicate money-management of the company. Exist many other metrics, but they are used in special methods of analysis of company. Pros: 1. Easy to use and interpretation; 2. Some objectivity in analyzing of company; 3. Easy-to-understand calculations; Cons: 1. Exist risk of manipulation of financial data in financial statement. Some guarantee exist, when company have an audit; 2. Need to check financial statement; 3. Do not give all-include analysis, needs research of environment and sector of the company; Metrics are good in analysis of the company: easy-to-use, objective, possibility to understand situation on market and comparing with competitors. But they must be complete with qualitative analysis. This is comparing with competitors, analysis of market and research of financial statement. Wish You have big profits and good investment, Financial analyst and advisor - Valerii Selin
NASDAQ:DOXEducation
by ValueInvest_Pro
Educational materials nr.1Good day, dear community. Today I will tell you about value investing. Value Investing is investing, based on economical indexes of the company and her real (fair) value. Real value is a guarantee of stable growing of the company. This kind of investing is not for speculations. It was created for long term investment. Decision about investing is after quantity and quality analysis. For quantity analysis use special indexes with own evaluation criteria (price to earnings , cash to debt and other). Quality analysis include fundamental analysis . It is analysis of economics, industry and sector. Often use comparative analysis with competitors and environment. Important part is analysis and checking financial statements of the company. The most famous value investors are Peter Lynch, Benjamin Graham, Warren Buffet. All of them had success using own variants of value investing. Pros: 1. Big profitable; 2. It needs less time on investing; 3. Long term; 4. Less influence of speculations. Cons: 1. Can be big losses in crisis (more than 50%); 2. Need more resources, than usual trading; 3. Influence of news and fundamental factors; 4. Need better investing preparations. Wish You profits and good investing, Financial advisor and analyst – Valerii Selin
NASDAQ:DOXEducation
by ValueInvest_Pro
Scalping opportunity on the 1m/3m/5m timeframes .....Those that like to scalp or want to learn can using our strategy. Its very clear to see how to follow price as shown - also our members can test using our strategy tester and hone in on the settings and parameters even further. However, this video is just showing standard settings. Either follow price or use the labels for SL and TP targets. Part close at TP2 and leave TP3 until the reverse signal or SL to entry, could work too. Lots of different ways to manage the position once you are in - even taking 15 pips a time would have worked a treat. Regards Darren Blue FX
Education
by pow_removetheguesswork
4
This is the only video you need to watch today! PROOF of successHi Guys and Girls I hope everyone is well. I am personally really excited about this video, our strategy and the community we are building. I genuinely don't think there are many services that can verify and validate the profitability of a strategy in a few minutes with data for nearly 320 trades across nearly 30 pairs for our May and June to date performance. We can. Risking 1% per trade - double account growth - crazy right? Even risking 0.25% is just under a 30% gain. Or just trade less pairs and still get great results - as we show in the video. In the video we talk about the changes and improvements to V3 - this can be a live trading journal you just need to follow. No need for myfxbook lot size calculations or the Stinu (which is great!) app - we have it all built in automatically - set your balance, your desired risk and as if by magic or some forces from the universe - the lot size you should trade appears directly with the trading signal. #gamechanger These statistics are also on 'one size fits all' settings which still prove to be great (apart from on 4 pairs) - we know we can improve these a lot more and that is what we are currently working on - this will look like a PRESET pull down menu that does it automatically. There is no need to leave trading to 'chance' and being 'lucky' or not - we have PROOF our strategy works, watch the video and take confidence, positivity and self belief into your own personal trading journey. Regards Darren PS - Thanks again to Connor and our secret weapon - we call him Uncle Wizard.
Education
by pow_removetheguesswork
2