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Why Daily Time Frame Analysis Will Make You a Better Trader Most beginner traders often think that money is made in the short-term timeframes, so they go the way of intraday trading, believing that it will enable them to quickly grow their small trading accounts. They have this belief that the lower timeframe provides more trading opportunities that can allow them to make more money in the long run. Given, the daily timeframe offers fewer trading opportunities and may seem slow and non-exciting to most traders, but there in lie the benefits — it forces you to have patience, trade less often, and make better trading decisions. While the intraday timeframes offer more trade setups, most of them fail, making you lose more money. The benefits of using the daily timeframe: A better view of the market structure The daily timeframe helps you to have a broader perspective of the market so you can have a better view of the price structure and the stage of the market cycle. It gives you a bigger picture of the market — you can see the price action over a longer period. More significant support and resistance levels The price swing points on the daily timeframe are more significant than those on the lower timeframes, and you know why — more traders are watching the daily timeframe than any other timeframe. More reliable price action patterns One price bar on the daily timeframe represents all the transactions that took place on that trading day, including during news releases. So, it captures the entire day’s volume of orders, which is more significant — the lower timeframes that may even be too small to absorb all the others from a high-volume trader. Always start your analysis from a daily time frame. It is very insightful, and it will bring your trading to the next level. Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
12
#BTCUSD What's next, rally or crash?Hi guys, This is CryptoMojo, One of the most active trading view authors and fastest-growing communities. Consider following me for the latest updates and Long /Short calls on almost every exchange. I post short mid and long-term trade setups too. Let’s get to the chart! I have tried my best to bring the best possible outcome to this chart, Do not consider financial advice. #BTC technical analysis As we can see in the chart BTC is forming this bearish flag pattern as same as it was made before in October and September 2022. last time after the breakout of the bearish flag pattern, BTC drops 20% what do you expect guys this time? Comment your view in the comment section and stay tuned, I will keep updating BTC in the different time frames. This chart is likely to help you make better trade decisions if it does consider upvoting it. I would also love to know your charts and views in the comment section. Thank you
Short
by CRYPTOMOJO_TA
13
Learn to Read The Candlesticks Like Pro Candlesticks give you an instant snapshot of whether a market’s price movement was positive or negative, and to what degree. The timeframe represented in a candlestick can vary widely. Green candles show prices going up, so the open is at the bottom of the body and the close is at the top. Red candles show prices declining, so the open is at the top of the body and close is at the bottom. Each candle consists of the body and the wicks. The body of the candle tells you what the open and close prices were during the candle’s time frame. The lines stretching from the top and bottom of the body are the wicks. These represent the highest and lowest prices the asset hit during the trading frame. What do candlesticks tell us? Candlesticks can reveal much more than just price movement over time. Experienced traders look for patterns in order to gauge market sentiment and to make predictions about where the market might be headed next. Here are some of the kinds of things they’re looking for: A long wick on the bottom of a candle, for instance, might mean that traders are buying into an asset as prices fall, which may be a good indicator that the asset is on its way up. A long wick at the top of a candle, however, could suggest that traders are looking to take profits — signaling a large potential sell-off in the near future. If the body occupies almost all of the candle, with very short wicks (or no visible wicks) on either side, that might indicate a strongly bullish sentiment (on a green candle) or strongly bearish sentiment (on a red candle). Understanding what candlesticks might mean in the context of a particular asset or within certain market conditions is one element of a trading strategy called technical analysis — by which investors attempt to use past price movements to identify trends and potential future opportunities. Please, like this post and subscribe to our tradingview page!👍
OANDA:BTCUSDEducation
by EliteTradingSignals
5
What is the U.S. Dollar Index? The U.S. Dollar Index is a measure of the value of the U.S. dollar against six other foreign currencies. Just as a stock index measures the value of a basket of securities relative to one another, the U.S. Dollar Index expresses the value of the dollar in relation to a “basket” of currencies. As the dollar gains strength, the index goes up and vice versa. The strength of the dollar can be considered a temperature read of U.S. economic performance, especially regarding exports. The greater the number of exports, the higher the demand for U.S. dollars to purchase American goods. The index is a geometric weighted average of six foreign currencies. Since the economy of each country (or group of countries) is of different size, each weighting is different. The countries included and their weights are as follows: Euro (EUR): 57.6 percent Japanese Yen (JPY): 13.6 percent British Pound (GBP): 11.9 percent Canadian Dollar (CAD): 9.1 percent Swedish Krona (SEK): 4.2 percent Swiss Franc (CHF): 3.6 percent The index is calculated using the following formula: USDX = 50.14348112 × EURUSD^-0.576 × USDJPY^0.136 × GBPUSD^-0.119 × USDCAD^0.091 × USDSEK^0.042 × USDCHF^0.036 When the U.S. dollar is used as the base currency, as in the example above, the value is positive. When the U.S. dollar is the quoted currency, the value will be negative. We constantly monitor the performance of DXY because very often it gives us great trading opportunities. What do you want to learn in the next post?
OANDA:XAUUSDEducation
by UnitedSignals
10
#BTC IS ON SUPPORT, WHAT'S NEXT?Hi guys, This is CryptoMojo, One of the most active trading view authors and fastest-growing communities. Consider following me for the latest updates and Long /Short calls on almost every exchange. I post short mid and long-term trade setups too. Let’s get to the chart! I have tried my best to bring the best possible outcome to this chart, Do not consider financial advice. #BTC UPDATE As per my last update, BTC is going down as we expected, it is currently trading around 16.5k local support. If BTC holds this support then we can expect some bounce but only in case, we get good some volume. let's see how the market reacts. In case of breakdown, we will continue the downwards really up to the 15.5k level. Stay tuned I will keep updating This chart is likely to help you make better trade decisions if it does consider upvoting it. I would also love to know your charts and views in the comment section. Thank you
Short
by CRYPTOMOJO_TA
25
ETHEREUM, Massive Formation With Huge Breakout Potential!Hi guys, This is CryptoMojo, One of the most active trading view authors and fastest-growing communities. Consider following me for the latest updates and Long /Short calls on almost every exchange. I post short mid and long-term trade setups too. Let’s get to the chart! I have tried my best to bring the best possible outcome to this chart, Do not consider financial advice. #ETH update ETH is trading inside this descending channel for over a year and now we are making this reversal pattern falling wedge pattern. We need a breakout of 1350k level then we can open a long Stay tuned I will keep updating This chart is likely to help you make better trade decisions if it does consider upvoting it. I would also love to know your charts and views in the comment section. Thank you
Long
by CRYPTOMOJO_TA
2
ENGULFING CANDLE - Powerful Price Reversal Engulfing candlestick pattern is the most popular candlestick pattern. Engulfing candlestick is formed when it completely engulfs the previous candle. There are two types of engulfing candlestick patterns. Bullish Engulfing Pattern Bearish Engulfing Pattern For a perfect engulfing candlestick, no part of the first candle can exceed the shadow (or wick) of the second candle. This entails that the low and high of the second candle entirely covers the first. But the major emphasis is on the body of the candle. The bullish candle gives the best signal when it appears below a downtrend and shows a rise in buying pressure. The pattern mostly causes a reversal of a current trend. It’s due to more buyers entering the market and driving prices further up. The pattern involves two candles, with the second green candle completely engulfing the previous red candle with no regard to the length of the tail shadows. The bullish candlestick tells traders that buyers are in total control of the market, following a previous bearish run. It is often seen as a signal to buy and take advantage of the market reversal. A bearish engulfing chart pattern is a technical pattern that indicates lower prices to come. It consists of a high (green) candle followed by a large down (red) candle that engulfs the smaller up candle. The pattern is necessary because it signals that sellers have overtaken the buyers. These sellers are aggressively driving the price downwards, more than buyers can push up. A bearish pattern indicates that the market will soon enter a downtrend, following a past increase in prices. The pattern signals that the market has been taken over by bears and could push the prices even further down. It is often seen as a sign to enter a short position in the market.
OANDA:XAUUSDEducation
by TopTradingSignals
12
THE FOREX SUCCESS PYRAMID What is your recipe for success in trading? Developing traders often don’t understand, when you are asking to be a successful (or professional) trader, you are asking not just to build a pyramid, but to sit on top of it. What most forget is the base is the biggest part of the pyramid and the foundation for building higher levels. As the pyramid continues to grow higher, it gets a little more complicated, but you have a base (foundation) and structures in place to carry the stones up to the higher levels. But just like a pyramid, there are more stones at the base and this takes more time to build. Also like a pyramid, there are more traders at the base (not making money or breaking even) then there are at the top. However, with structures and rhythm in place, the fruits of your labor will result in a steady conditioning of your muscles (discipline, diligence and psychology). This will allow you to take on greater and greater heights, challenges and climb the pyramid of trading. Having forex trading discipline, diligence and psychology will give you a sense of confidence and a feeling of mastery over the process. This is the pyramid of trading and the attributes needed to climb to higher levels. While most traders spend time trying to find profitable trades, or the next great system, make sure you take time out to build the attributes which develop your trading muscles (discipline, diligence and psychology). By yourself this can be a very difficult task so it helps to create mechanisms in your life to build these habits. Please, like this post and subscribe to our tradingview page!👍
OANDA:BTCUSDEducation
by EliteTradingSignals
4
📊HOW TO CREATE A TRADING PLAN📊 📖What is a trading plan? A trading plan is a comprehensive decision-making tool for your trading activity. It helps you decide what, when and how much to trade. A trading plan should be your own, personal plan – you could use someone else’s plan as an outline but remember that someone else’s attitude towards risk and available capital could be vastly different to yours. 📚Why do you need a trading plan? You need a trading plan because it can help you make logical trading decisions and define the parameters of your ideal trade. A good trading plan will help you to avoid making emotional decisions in the heat of the moment. ✳️TRADING PLAN CREATION STEPS: 1️⃣Outline your motivation Figuring out your motivation for trading and the time you’re willing to commit is an important step in creating your trading plan. Ask yourself why you want to become a trader and then write down what you want to achieve from trading. 2️⃣Decide how much time you can commit to trading Work out how much time you can commit to your trading activities. Can you trade while you’re at work, or do you have to manage your trades early in the mornings or late at night? If you want to make a lot of trades a day, you’ll need more time. If you’re going long on assets that will mature over a significant period of time – and plan to use stops, limits and alerts to manage your risk – you may not need many hours a day. It's also important to spend enough time preparing yourself for trading, which includes education, practising your strategies and analysing the markets. 3️⃣Define your goals Any trading goal shouldn’t just be a simple statement, it should be specific, measurable, attainable, relevant and time-bound (SMART). For example, ‘I want to increase the value of my entire portfolio by 15% in the next 12 months’. This goal is SMART because the figures are specific, you can measure your success, it’s attainable, it’s about trading, and there’s a time-frame attached to it.You should also decide what type of trader you are. Your trading style should be based on your personality, your attitude to risk, as well as the amount of time you’re willing to commit to trading. 4️⃣Choose a risk-reward ratio Before you start trading, work out how much risk you're prepared to take on – both for individual trades and your trading strategy as a whole. Deciding your risk limit is very important. Market prices are always changing and even the safest financial instruments carry some degree of risk. Some new traders prefer to take on a lower risk to test the waters, while some take on more risk in the hopes of making larger profits – this is completely up to you. It is possible to lose more times than you win and still be consistently profitable. It's all down to risk vs reward. 5️⃣Decide how much capital you have for trading Look at how much money you can afford to dedicate to trading. You should never risk more than you can afford to lose. Trading involves plenty of risk, and you could end up losing all your trading capital (or more, if you are a professional trader). Do the maths before you start and make sure you can afford the maximum potential loss on every trade. If you don't have enough trading capital to start right now, practise trading on a demo account until you do. 6️⃣Start a trading diary For a trading plan to work it needs to be backed up by a trading diary. You should use your trading diary to document your trades as this can help you find out what’s working and what isn’t.You don’t only have to include the technical details, such as the entry and exit points of the trade, but also the rationale behind your trading decisions and emotions. If you deviate from your plan, write down why you did it and what the outcome was. The more detail in your diary, the better. I Hope you guys learned something new today✅ Wish you all Best Of Luck👍 😇And may the odds be always in your favor😇 Do you like this post? Do you want more articles like that?
Education
by ProSignalsFx
4
STOP LOSS TRADING STRATEGY!Hi guys, This is @CRYPTOMOJO_TA One of the most active trading view authors and fastest-growing communities. Consider following me for the latest updates and Long /Short calls on almost every exchange. I post short mid and long-term trade setups too. Hey traders, In this post, we will discuss 3 classic trading strategies and stop placement rules. 1) The first trading strategy is a trend line strategy. The technique implies buying/selling the touch of strong trend lines, expecting a strong bullish/bearish reaction from that. If you are buying a trend line, you should identify the previous low. Your stop loss should lie strictly below that. If you are selling a trend line, you should identify the previous high. Your stop loss should lie strictly above that. 2) The second trading strategy is a breakout trading strategy. The technique implies buying/selling the breakout of a structure, expecting a further bullish/bearish continuation. If you are buying a breakout of resistance, you should identify the previous low. Your stop loss should lie strictly below that. If you are selling a breakout of support, you should identify the previous high. Your stop loss should lie strictly above that. 3) The third trading strategy is a range trading strategy. The technique implies buying/selling the boundaries of horizontal ranges, expecting a bullish/bearish reaction from them. If you are buying the support of the range, your stop loss should strictly lie below the lowest point of support. If you are selling the resistance of the range, your stop loss should strictly lie above the highest point of resistance. As you can see, these stop-placement techniques are very simple. Following them, you will avoid a lot of stop hunts and manipulations. What Is a Stop-Loss Order? A stop-loss order is an order placed with a broker to buy or sell a specific stock once the stock reaches a certain price. A stop-loss is designed to limit an investor's loss on a security position. For example, setting a stop-loss order for 10% below the price at which you bought the stock will limit your loss to 10%. Suppose you just purchased Microsoft (MSFT) at $20 per share. Right after buying the stock, you enter a stop-loss order for $18. If the stock falls below $18, your shares will then be sold at the prevailing market price. Stop-limit orders are similar to stop-loss orders. However, as their name states, there is a limit on the price at which they will execute. There are then two prices specified in a stop-limit order: the stop price, which will convert the order to a sell order, and the limit price. Instead of the order becoming a market order to sell, the sell order becomes a limit order that will only execute at the limit price (or better). Advantages of the Stop-Loss Order The most important benefit of a stop-loss order is that it costs nothing to implement. Your regular commission is charged only once the stop-loss price has been reached and the stock must be sold. 3 One way to think of a stop-loss order is as a free insurance policy. Additionally, when it comes to stop-loss orders, you don't have to monitor how a stock is performing daily. This convenience is especially handy when you are on vacation or in a situation that prevents you from watching your stocks for an extended period. 4 Stop-loss orders also help insulate your decision-making from emotional influences. People tend to "fall in love" with stocks. For example, they may maintain the false belief that if they give a stock another chance, it will come around. In actuality, this delay may only cause losses to mount. 5 No matter what type of investor you are, you should be able to easily identify why you own a stock. A value investor's criteria will be different from the criteria of a growth investor, which will be different from the criteria of an active trader. No matter what the strategy is, the strategy will only work if you stick to it. So, if you are a hardcore buy-and-hold investor, your stop-loss orders are next to useless. At the end of the day, if you are going to be a successful investor, you have to be confident in your strategy. This means carrying through with your plan. The advantage of stop-loss orders is that they can help you stay on track and prevent your judgment from getting clouded with emotion. 2 Finally, it's important to realize that stop-loss orders do not guarantee you'll make money in the stock market; you still have to make intelligent investment decisions. If you don't, you'll lose just as much money as you would without a stop-loss (only at a much slower rate.) Types of Stop-Loss orders Fixed Stop Loss The fixed stop is a stop loss order triggered when a particular pre-determined price is hit. Fixed stops can also be timed-based and are most commonly used as soon as the trade is placed. Time-bound fixed stops are useful for investors who want to provide the position with a pre-set amount of time to profit prior to moving on to the next trade. Only utilize time-based stops when positioned sized properly to permit major adverse swings in share price. Trailing Stop-Loss Order Trailing order caters to the capital gains protection of an investor, while simultaneously providing a hedge against any unexpected price downturns. It is set as a percentage of the total asset price, and the order to sell is triggered in case market prices fall below the stipulated level. However, in the case of a price rise, the trailing order adjusts automatically in tune with an overall increase in market valuation. Suppose, in a trailing stop-loss market, an order for execution is set if the price of a security falls below 10% of the market value. Assuming the purchase price is 100 an order to sell the security is executed automatically by an authorised broker if the price falls below 90. In case the share prices rise to 120, the trailing order stands at 10% of the current market price, which is 108. Hence, if prices consequently start falling after peaking at. 120, a stop-loss order will be executed at 108. It allows an individual to enjoy a capital gain of 8 (108 – 100) on his/her investment corpus. Stop-Loss Order Vs Market Order While a stop-loss order performs a sale of underlying securities provided the price falls below a prescribed limit, a market order is issued to a broker to conduct trade (both buying and selling) at the prevailing market price. Stop-loss orders are designed to reduce the risk factor, while market orders aim to increase liquidity in the stock market by eradicating the bid-ask spread difference. A market order is the most basic form of trade order placed in a stock market. Stop-Loss Order and Limit Order Limit orders execute a trade of stipulated securities if the price reaches a pre-set value. While a buy limit order facilitates the purchase of any securities if the price falls below the given limit, a sell limit order is executed if the price rises above the value. Limit orders are designed to maximise the profitability of an investment venture by maximising the bid-ask spread. It is in contrast to stop-loss orders, which are implemented only if the price is equal to the limit stated by investors, as a method of minimising losses in a bear market. If you like our content, please feel free to support our page with a like, comment & follow for future educational ideas and trading setups.
Education
by CRYPTOMOJO_TA
5
What is US dollar index (DXY)? Dollar Index History DXY began in March 1973, shortly after the Bretton Woods system collapsed. Initially, the value of the US Dollar Index was set at 100,000. Since then, the index has peaked at 164.7200 in February 1985 and hit a low of 70,698 on March 16, 2008, and is currently trading at 103.715. The arrangement of the "basket" took place only once, at the beginning of 1999, when the euro included several currencies. The arrangement of the "basket" does not yet include countries with high trade volumes, such as China, Mexico, South Korea and Brazil. On the other hand, although Sweden and Switzerland do not have large trade volumes, they continue to be included in the index. What is the Dollar Index? The US Dollar Index (USDX, DXY) is an indicator of the value of the US Dollar against foreign currencies. It is also referred to as a money basket by US trading partners. The index is designed, maintained, and published by ICE Futures and. It is also registered with the name "U.S Dollar Index". How Is The Dollar Index Calculated? The dollar index is calculated by the weighted geometric average of the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc. ✅Euro (EUR)= 57.6% by weight ✅Japanese Yen (JPY) = 13.6 weight ✅British Pound (GBP) = 11.9% by weight ✅Canadian Dollar (CAD) = 9.1% by weight ✅Swedish Krona (SEK) = 4.2% by weight ✅Swiss Franc (CHF) = 3.6% by weight Its formula is: DXY = 50.14348112 × EURUSD -0.576 × USDJPY 0.136 × GBPUSD -0.119 × USDCAD 0.091 × USDSEK 0.042 × USDCHF 0.036 Why Dollar Index Increases? 👉🏻Every move that will strengthen the dollar in the United States, decrease in unemployment, positive employment data, high growth figures 👉🏻The depreciation of the local currencies of the six main countries included in the DXY Why Is The Dollar Index Declining? 👉🏻Data that will cause the dollar to depreciate in the United States, growth figures below expectations, unemployment rates higher than expected 👉🏻Strengthening of the economies of the six main countries in DXY, appreciation of their local currencies DXY is updated as long as the USD market is open. DXY can be traded as a futures contract on the ICE exchange. It is also available in exchange-traded funds (ETFs), options, and mutual funds.
ICEUS:DX1!
by Forexcues
Learn to Read Candlestick Strength | Trading Basics Hey traders, In this educational article, we will discuss how to objectively measure the market momentum with candlesticks. Please, note that the concepts that will be covered in this article can be applied on any time frame, however, higher is the time frame, more trustworthy are the candles. Also, remember, that each individual candle is assessed in relation to other candles on the chart. There are three types of candles depending on its direction: 🟢Bullish candle Such a candle has a closing price higher than the opening price. 🔴Bearish candle Such a candle has a closing price lower than the opening price. 🟡Neutral candle Such a candle has equal or close to equal opening and closing price. There are three categories of the strength of the candle. Please, note, the measurement of the strength of the candle is applicable only to bullish/bearish candles. Neutral candle has no strength by definition. It signifies the absolute equilibrium between buyers and sellers. 1️⃣Strong candle Strong bullish candle signifies strong buying volumes and dominance of buyers without sellers resistance. Strong bearish candle means significant selling volumes and high bearish pressure without buyers resistance. Usually, a strong bullish/bearish candle has a relatively big body and tiny wicks. 2️⃣Medium candle Medium bullish candle signifies a dominance of buyers with a rising resistance of sellers. Medium bearish candle means a prevailing strength of sellers with a growing pressure of bulls. Usually, a medium bullish/bearish candle has its range (based on a wick) 2 times bigger than the body of the candle. 3️⃣Weak candle Weak bullish candle signifies the exhaustion of buyers and a substantial resistance of sellers. Weak bearish candle signifies the exhaustion of sellers and a considerable bullish pressure. Usually, such a candle has a relatively small body and a big wick. Knowing how to read the strength of the candlestick, one can quite accurately spot the initiate of new waves, market reversals and consolidations. Watch how the price acts, follow the candlesticks and try to spot the change of momentum by yourself. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Education
by VasilyTrader
7
According to the scenario maybe this will be the last dip!Hi guys, This is CryptoMojo, One of the most active trading view authors and fastest-growing communities. Consider following me for the latest updates and Long /Short calls on almost every exchange. I post short mid and long-term trade setups too. Let’s get to the chart! I have tried my best to bring the best possible outcome to this chart, Do not consider financial advice. In the daily time frame, BTC is forming this falling wedge pattern. Falling Wedge When a security's price has been falling over time, a wedge pattern can occur just as the trend makes its final downward move. The trend lines drawn above the highs and below the lows on the price chart pattern can converge as the price slide loses momentum and buyers step in to slow the rate of decline. Before the lines converge, the price may breakout above the upper trend line. BTC drops after the FOMC meeting as expected, according to the pattern we are expecting some more drops up to 15k and then we can expect a bounce. But as we all know to confirm this pattern, we need a breakout. Stay tuned I will keep updating BTC in every timeframe below the chat. So read the full chart carefully This chart is likely to help you make better trade decisions if it does consider upvoting it. I would also love to know your charts and views in the comment section. Thank you
Long
by CRYPTOMOJO_TA
2
4 Signs that Say You’re Ready for Full-Time Trading For forex traders, nothing embodies freedom more than those who trade full-time. After all, full-time traders enjoy freedom from their box-type offices, freedom of time, and freedom to choose which trading opportunities to take. Unfortunately, this brand of independence isn’t for everyone. Just like too much freedom can do more harm than good for some economies, not all traders are ready to trade full-time. So how do you know when you’re ready for full-time trading? From what we’ve seen from online forex communities, we can narrow it down to four signs: 1. You have enough capital Trading full time means that you’ll be quitting your job, your primary source of income. And, because you’re realistic, you know that you probably won’t be making any serious trading money in your first few months. 2. You have tried and tested other methods and strategies Not only do you need to have a strategy that has proven to be profitable for you, but you also have to have other equally qualified methods that would work for other trading conditions. After all, you never know when and for how long the market trends will shift! 3. You have spent a considerable amount of time trading LIVE Trading a live account brings forth trading psychology hurdles that you wouldn’t get from trading demo accounts. In addition, you have to have a fairly good grasp of your trading strengths and weaknesses, and, more importantly, you should know how to stick to a trading plan before you make trading your full-time job. 4. Trading is your passion Trading currencies is what motivates you to get up and get busy every morning. Remember that while full-time trading would provide you more opportunities to catch market movements, you don’t need to be a full-time trader to be consistently profitable. What do you want to learn in the next post?
OANDA:XAUUSDEducation
by UnitedSignals
8
5 IMPORTANT INDICATORS FOR BEGINNERSHi guys, This is @CRYPTOMOJO_TA One of the most active trading view authors and fastest-growing communities. Consider following me for the latest updates and Long /Short calls on almost every exchange. I post short mid and long-term trade setups too. Moving Average A moving average is a technical indicator that combines price points of an instrument over a specified time frame, and divides by the number of data points, to give you a single trend line. It is popular amongst traders because it can help to determine the direction of the current trend, while lessening the impact of random price spikes. A moving average will enable you to examine the levels of support and resistance, by analysing the previous movement of an asset’s price. It is a measure of change that trails the previous price action of an asset, assessing the history of market movements to determine possible future patterns. A moving average is primarily a lagging indicator, which makes it one of the most popular tools for technical analysis. Calculating an MA requires a certain amount of data, which can be a large quantity depending on the length of the moving average. For instance, a ten-day MA will require ten days of data, while a one-year MA will require 365 days’ worth. A 200-day period is a very commonly used timeframe for MA. The indicator is described as ‘moving’ because the introduction of new figures will replace old data points and ‘move’ the line on the chart. Bollinger Bands Bollinger Bands are typically plotted as three lines: An upper band A middle line A lower band The middle line of the indicator is a simple moving average (SMA). Most charting programs default to a 20-period, which is fine for most traders, but you can experiment with different moving average lengths after you get a little experience applying Bollinger Bands. The upper and lower bands, by default, represent two standard deviations above and below the middle line (moving average). If you’re freaking out because you’re not familiar with standard deviations. Have no fear. The concept of standard deviation (SD) is just a measure of how spread out numbers are. If the upper and lower bands are 1 standard deviation, this means that about 68% of price moves that have occurred recently are CONTAINED within these bands. If the upper and lower bands are 2 standard deviations, this means that about 95% of price moves that have occurred recently are CONTAINED within these bands. Relative Strength Index ( RSI ) RSI is considered overbought when above 70 and oversold when below 30. These traditional levels can also be adjusted if necessary to better fit the security. For example, if a security is repeatedly reaching the overbought level of 70 you may want to adjust this level to 80. Note: During strong trends, the RSI may remain in overbought or oversold for extended periods. RSI also often forms chart patterns that may not show on the underlying price chart, such as double tops and bottoms and trend lines. Also, look for support or resistance on the RSI. In an uptrend or bull market, the RSI tends to remain in the 40 to 90 range with the 40-50 zone acting as support. During a downtrend or bear market the RSI tends to stay between the 10 to 60 range with the 50-60 zone acting as resistance. These ranges will vary depending on the RSI settings and the strength of the security’s or market’s underlying trend. If underlying prices make a new high or low that isn't confirmed by the RSI, this divergence can signal a price reversal. If the RSI makes a lower high and then follows with a downside move below a previous low, a Top Swing Failure has occurred. If the RSI makes a higher low and then follows with an upside move above a previous high, a Bottom Swing Failure has occurred. MACD(Moving Average Convergence Divergence) Moving average convergence divergence, or MACD, is one of the most popular tools or momentum indicators used in technical analysis. This was developed by Gerald Appel towards the end of 1970s. This indicator is used to understand the momentum and its directional strength by calculating the difference between two time period intervals, which are a collection of historical time series. In MACD, ‘moving averages’ of two separate time intervals are used (most often done on historical closing prices of a security), and a momentum oscillator line is arrived at by taking the difference of the two moving averages, which is also denoted as ‘divergence’. The simple rule for taking the two moving average is that one should be of shorter time period and the other longer time period. Generally, exponential moving averages (EMA) are considered for this purpose. Description: The main points for an MACD indicator are: a) Time period or interval – which the user can define. Commonly used time periods are: Short-term intervals – 3, 5, 7, 9, 11, 12, 14, 15-day intervals, but 9-day and 12-day durations are more popular Long-term intervals – 21, 26, 30, 45, 50, 90, 200-day intervals; 26-day & 50-day intervals are more popular b) Momentum oscillator line or divergence or MACD line – which can be simple plotting of ‘divergence’ or difference between two interval moving averages c) Signal Line – which is exponential moving average of divergence data e.g. 9-day EMA d) Normally a combination of 12-day and 26-day EMA of prices and 9-day EMA of divergence data is used, but these values can be changed depending on the trading goal and factors e) The above data is then plotted on a chart, where the X- axis is for time and Y-axis is price, to get MACD line, signal line and histogram for the difference between the MACD and signal line, which is shown below the X-axis Volume Volume, or trading volume, is the number of units traded in a market during a given time. It is a measurement of the number of individual units of an asset that changed hands during that period. Each transaction involves a buyer and a seller. When they reach an agreement at a specific price, the transaction is recorded by the facilitating exchange. This data is then used to calculate the trading volume. Trading volume can be denominated in any trading asset, such as stocks, bonds, fiat currencies or cryptocurrencies. For example, if Alice sells Bob 5 BNB for 20 USD each, the volume of that transaction can be either 100 USD, or 5 BNB, depending on what the trading volume is denominated in. This also means that for a stock, for example, the trading volume refers to the number of individual stocks that were traded during the measured period. So if 100 shares are traded in one trading day, the daily volume of the stock is 100 shares. Traders tend to use the volume indicator as an attempt to gain a better understanding of the strength of a given trend. If volatility in price is accompanied by high trading volume, it may be said that the price move has more validity. Conversely, if a price move is accompanied by low trading volume, it may indicate weakness of the underlying trend. Price levels with historically high volume can also give traders an indication regarding where the best entry and exit points could be located for a specific trade setup. Typically, a rising market should see increasing volume, indicating continuous buyer interest to keep pushing prices higher. Increasing volume in a downtrend may indicate increasing sell pressure. Reversals, exhaustion moves, and sharp changes in price direction are often accompanied by a high volume spike, as these tend to be the times when the highest amount of buyers and sellers are active in the market. Volume indicators often also incorporate a moving average, measuring the volume of the candles in a given period and producing an average. This gives traders an additional tool to gauge the strength of the current market trend. If you like our content, please feel free to support our page with a like, comment & follow for future educational ideas and trading setups.
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