📚 The Beauty of Combining Technical & Fundamental Analysis 📚 What is Fundamental Analysis?
Fundamental analysis is a way of looking at the forex market by analysing economic, social, and political forces that may affect currency prices. The idea behind this type of analysis is that if a country's current or future economic outlook is good, its currency should strengthen (Baby Pips - www.babypips.com)
What is Technical Analysis?
Technical analysis is the study of historical price action in order to identify patterns and determine probabilities of future movements in the market through the use of technical studies, indicators, and other analysis tools (Forex.com www.forex.com)
Technical analysts look for similar patterns that have formed in the past and will form trade ideas believing that price could possibly act the same way that it did before.
From the chart above, you can see how key fundamental news created incredible volatility in the market but the underlying technical analysis was still intact. From this, we can gather that although fundamental analysis is important, technical analysis is just as important.
See charts below to identify how we could have traded the key fundamental moments over the past few years.
See links below for more trade ideas and in-depth analysis!
Babypips
NASDAQSHORT TERM SELL DOUBLE TOP FORMED ON H1 , AND I EXPECT PRICE TO RETEST TO CONFIRM THE BIAS WITH CANDLE STICK FORMATION THEN DROP TO HIT THE TWO TARGET
GOLDa rejection from the channel wall now and with the NFP result been positive for dollar i expect dollar to move back to 1960-1970 zone before another push
XPTUSD UPDATE after our initial entry at the QML level , we have bearish engulfing price action on the daily time frame which confirm our sell bias , im expecting more sell to the LOW of the structure which will serve as our TARGET
AUDUSD A divergence was spotted on AUDUSD with the confirmation on awesome oscillator and DXY gaining strenght for the past few days , i expect AUDUSD to sell to the before any move up again
USOILPrice is indicating weakness as the bull candle fading away. then i expect a retracement back into 25-21 zone pricing and also a qausimodo at that level , so i expect price to drop from now on.
NZDUSD my view on this pair remain the same as we are in wave 4 , if this is expanding flat then we will have a push up to 0.6620 and price will go down more below 0.6384 to complete wave C of the structure but as for now im still in for the sell unless the previous high is broken to confirmed the expanding flat .
GBPJPYGBPJPY done with the ABC correction on H4 after a long minuscule wave 3 , i expect the pair to go long now after it reject 0.618 retracement level of extended wave 3 .
GBPJPY WE are going long on GBPJPY as the pair hit 0.382 fibo retracement level on wave 3 and so i expect 5 minuscule wave movement to complete minor wave C
USDCADwe are in minuscule wave 5 of zigzag WXY correction , after the correction at 1.3318 i expect price to reject this at which serve as 78.6 retracement level for the whole wave , then price to start going up base on the structure and the wave count
EURGBP EURGBP, finish a 5 wave sequence and on the run for the three wave corrective sequence of ABC which make it up as head and shoulder , price is expected to move to the 0.786 or 0.618 fibo level as per wave rules and law
Fibonacci Retracements- USDJPY sell limit I'm synchronizing this to my babypips lessons gotta start somewhere #gang trying to get this "hands on" training. So I learned about fibonacci retracements and I'm placing a sell limit order: assuming that the overall downtrend continues, as seen in the 4 hour chart for USDJPY, if the retracement rallies above the 23.6 % level my order (position=sell) initiates. I set a tight stop loss in case the downtrend does not continue. The take profit is very generous to accomodate for the potential downtrend. I am chasing the #trend #gang
EUR/USD Exchange RateEUR/USD Exchange Rate
Once you start getting used to the signs of breakouts, you’ll be able to spot good potential trades fairly quickly.
Breakouts are significant because they indicate a change in the supply and demand of the currency pair you are trading.
This change in sentiment can cause extensive moves that provide excellent opportunities for you to grab some pips.
This indicator will show Support & Resistance Levels for the trading strategies with the current level clearly highlighting possible price turning points or breakouts for price action trading.
EUR/USD's decline extends to as low as 1.0793 so far and broke 161.8% projection of 1.1172 to 1.0992 from 1.1095 at 1.0804.
Study Notes: Hidden DivergencesBased on the Babypips course:
www.babypips.com
Hidden bullish divergence example
Study Notes - The Bullish PennantStudy notes based on the Babypips course.
Based on this article:
www.babypips.com
Bullish pennants are formed in an uptrend and imply that the bulls are about to charge again!
- Uptrend
- Breather, consolidation into a tight range
- Breakout to the upside
Flagpole can be used to measure size of the breakout upside potential
Study Notes: Falling WedgeStudy notes on the Babypips course. Based on this article:
www.babypips.com
Chart example: USD/ Swiss Franc
The Falling Wedge is a reversal/continuation signal, much like the Rising Wedge.
In this case:
- During an uptrend, this means momentum is cooling off a bit, but the price will continue to rise later.
- Can be formed at the bottom of a downtrend, meaning that there will soon be upside.
- Placing a long just above the upper line of the wedge would be a good place to get into a trade.
Study Notes: Momentum IndicatorsStudy notes based on Babypips course:
www.babypips.com
Momentum Indicators aka Lagging Indicators
- More accurate in representing changes in trend
- However, lags behind the trend shift, reducing profit margins
- Less prone to false signals / fakeouts so less risky
Delayed entry but higher accuracy. They can still provide some fakeouts especially when price has lowered volatility, or is somewhat rangebound.
Examples: MA's, MACD
Study Notes: OscillatorsI am currently studying the brilliant Babypips.com materials on Technical Analysis.
I'm capturing my study notes on live chart examples.
These are notes from:
www.babypips.com
Takeaways:
- Oscillators are great at giving signal for trend changes
- But they often get ahead of the game and assume *every* fluctuation in momentum is a trend change
- Oscillators fluctuate between buy and sell signals, think of a desktop fan that goes from left-right
Examples:
- Parabolic SAR, Stoch, RSI
My own thoughts:
- Using all oscillators together and looking for 'agreement' might be a nice approach. Charts with decent price history allow you to see how reliable this has been in the past, as a gauge of probability.
- Ichi Clouds is the only indicator that successfully works as a full trading system. You can see these ones have a modest hitrate - only to be used to support a rationale rather than drive it.
BTC/USD OutlookBitcoin was recently in a descending right triangle and broke the 5025.0 level. Right now, it is still bearish. Will Bitcoin break or bounce from the 2984.7 support? Let's see when price gets there.
GBPJPY Forecast, Swing ExpertsGBPJPY is moving with the strong GBP in recent days and if we can break 149.366 then we see it testing 150.30
EURCHF Forecast, Swing ExpertsEURCHF looks set to go upside if it breaks 1.14541 and targets can be set near 1.1570
