Archive for July, 2007
Technical Indicators – Momentum
Posted on31. Jul, 2007 by admin.
Momentum measures the rate of change of the currency pair.
Momentum = V – Vn
Where
V = latest closing price
Vn = closing price n periods ago
If there is no change of closing price, momentum equals to 0, which is the central line of the indicator. When there is a rise of price, momentum is greater than 0. [...]
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Technical Indicators – Relative Strength Index (RSI)
Posted on31. Jul, 2007 by admin.
Relative Strength Index (RSI) measures the strength of all upward movement against the strength of all downward movement in a specified time frame.
For mathematical formula of RSI is as follow:
RSI = 100 – [100/(1+RS)]
RS = average of n day’s up closes / average of n day’s down closes
The most common parameter for RSI is period [...]
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Technical Indicators – Moving Average Convergence Divergence (MACD)
Posted on31. Jul, 2007 by admin.
Moving Average Convergence Divergence (MACD) shows the difference of two moving averages – EMA12 and EMA26, and a 9-day EMA of the difference is plotted against it to trigger buy or sell signal.
There are three parameters in MACD:
MACD line – the difference between the 12 and 26 period EMA
Signal line – the 9 day EMA [...]
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Technical Indicators – Moving Average Envelopes
Posted on31. Jul, 2007 by admin.
The moving average envelope is a variant application to the moving average. It is a trading band composed of two moving averages, which attempts to determine the range of market should be trading in. Traders can choose their period of MA, then form the upper line of the envelope by shifting the MA upwards and [...]
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Technical Indicators – Bollinger Bands
Posted on31. Jul, 2007 by admin.
Bollinger bands were created by John Bollinger in the early 1980s. The bands have similar theory and application with the Moving Average Envelopes. It has a set of three curves, the typical parameters are:
Middle Bollinger Band = 20-period simple moving average
Upper Bollinger Band = Middle Bollinger Band + 2 * 20-period standard deviation
Lower Bollinger Band [...]
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Technical Indicators – Moving Averages
Posted on31. Jul, 2007 by admin.
What is moving average?
Moving average is the average rate of a currency pair over a set period. For example, if you conduct a 20-day moving average (20 day MA), you simply add the close price of the past 20 days and divide it by 20. This is called a simple moving average (SMA).
The most common [...]
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Technical Indicators – Introduction
Posted on31. Jul, 2007 by admin.
Technical indicators are statistics of past market data base on different mathematical calculations. Traders use technical indicators extensively in technical analysis to predict the continuance and the reversals in currency trends.
There are two major types of technical indicators: trend following indicators and oscillators.
Trend following indicators reflect the direction and the strength of the current trend. [...]
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Fibonacci – Fibonacci Retracements
Posted on26. Jul, 2007 by admin.
The price movement of any financial market is in wave format. Suppose a currency pair is on an up-trend, going from 1.0000 to 1.1000. After reaches certain top “boundary”, 1.1000 for instance, it will retrace – meaning pull back down – before resuming its initial up-trend. Fibonacci Retracements are levels at which the market is [...]
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Forex Chart Patterns – Rectangles Chart Patterns
Posted on26. Jul, 2007 by admin.
The rectangle formation is often a very simple one to recognize. It is essentially a market that is trading in a range between two horizontal lines. The rectangle formation represents consolidation of the move that preceded it, creating a foundation for a continuation of a further move in the same direction.
The rectangle formation can be [...]
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Forex Chart Patterns – Wedges Chart Patterns
Posted on26. Jul, 2007 by admin.
The formation of wedges can signal breakouts in upward or downward trending markets. They are similar to triangles in terms of their application. The Wedge formation is a variation on the ascending or descending triangle in which both the angled sides of the triangle are sloping against the dominant trend in the market. The wedge [...]
