All technical analysis of the online currency market begins to plot prices. There are traders who never look at forex charts to obtain information about their Forex forex strategy, only to technical indicators-essentially, derivatives of price charts, but they have initially graphs of price movements is needed.
All hail the Personal Computer
How often would a book / article that the development of a subject trying to describe really should start with "Since the introduction of the personal computer ......."
The PC has many, many changes in the world of those who can afford it. Computing power for all, knowledge for everyone, entertainment for everyone, communication for everyone, with everyone. Regarding the financial markets, the impact is enormous, and the aftershocks are still felt, for example in the ever increasing popularity of online forex trading among young people.
Technical analysis of Forex over the past 3 decades has made enormous strides. Thanks to the computer are much more complicated calculations become possible, which is also much faster, more accurate and longer can be done. With 2 pressing the button, anyone can call a chart of the EUR / USD over the past 10 years, with various technical indicators to explain the fading moments of break-outs, line bouncing and many more goodies.
Technical analysis of financial markets (stock, options, currency etc) used to be reserved for people who are more able than a little mental arithmetic, they plot their graphs themselves and developed formulas to those graphs to interpret-the an otherwise more successful than the other ......
But the only thing we need today is a PC, internet connection and sound knowledge of what all those graphs and 'technical indicators' actually do (for us to) mean. After a little study graphs below not nearly as complicated as they might seem.
Prices plotting
There are three basic ways to price movements display on an xy axis card:
1) Line chart
2) Bar chart
3) Candlestick chart
If you have a bit of action are beaten, you probably already know by now that the candlestick chart is by far the most common way. Yet it is also useful to take a closer look at the first 2 because it provides insight into the primary source of technical analysis.
Line Chart
This is the simplest way to price promotions to display. For each period, use 1 price, this may be the highest price in that period, the lowest or average. Then you plot the price on a map where the x-axis displays the time unit and the y-axis is the price. Something like this:
50 euro free markets
Self-appointed heroes like forex often (wrongly) their noses up to the line chart, but even this does display some simple method to compare for example the candlestick chart, it is very easy to prepare themselves and also gives quite a bit information. Thus graph above clearly shows the uptrend again of the Euro vs. the Dollar in the period medio2008-medio2008.
The disadvantage of the Line chart is that you get to see little about the structure of the price in a given period. The above map shows every day for a price again, but what happened that day? How opening the market, the price is developed, and how closed the market? Such information is especially strong interest in daytrading because it tells a lot about market sentiment. Over the longer term, however, makes it less of you or a line, bar or candlestick chart is used.
Bar chart
This way of viewing let all see a lot more about the development of the price in a given period. Each period is represented by a vertical bar with the bottom indicates the low and top the high for that period. The horizontal bar on the left shows the opening price again, and the horizontal bar on the right closing price. Opening and closing are located close to each other, while the bar is of considerable length, then there is thus much activity have been without it being finally was silver-plated. Such is something of a single line chart never emerges.
Candlestick chart
This is by far the most common method of plotting price today. The method was invented by Japanese rice traders in the seventeenth century, so so young, this method is not at all. Smile In the next article, we pay more attention to the candlestick, but below for just one example. The beauty of the candlestick is that it perfectly reflects what happens within a certain period with the price happened. Moreover, there are all sorts of candles - doji candle, long-legged doji candle, gravestone doji etc and patterns, harami, hammer, dark cloud cover, three black crows, three white soldiersetc-that much value in predicting future market sentiment. One thing is certain: If you want to be a successful trader you must learn to recognize these patterns .. Can you bring a lot ..... oh eh, blue / green be good, be bad red!
related posts
- fx
- forex
- buy and sell
- ttm
- adx
