Use long term charts with the blade to decide between trends or market fluctuations. Start your analysis with daily charts, weekly, monthly, and even given several previous years. A scale shows essentially the life market and provides a much clearer perception on the long term.
Once you have traced the long term sets, you can trace the short term charts. Remember that the element of chance in Forex is much lower president from a table. It is better to negotiate in the same direction as the medium and long term trends, even if only musical shows the very short term. If there is a strong trend and determined, it is necessary to pass another strategy.
2. Follow the trend
Once determined, you need only open positions in the direction of the trend. Market trends can be long, short or medium term. First, you must decide what strategy you want to follow: a long-term or less time. This decision will determine the type of graphics you need to use. But the strategy will always follow the trend.
Should be an upward trend, regressions expect the purchase price of the standard, to ensure a good entry price. In the case of a downtrend, we will expect a recovery in the coin selling price paris.
Market trends can be long, short or medium term
3. Locate levels of support and resistance
Find support and resistance. It is best to buy near support levels and selling near resistance levels. The resistance level is usually a peak earlier. Among president used graphics, more importantly also the level.
When the resistance is finally broken, it automatically becomes a stand. Similarly, when a support is finally conquered, it in turn becomes a resistor.
4. margins or corrections
Generally market correction, up or down, covers an important part of the front trend. Corrections can be measured in a trend in simple percentages. A trace of fifty percent a trend most is the most common. Fibonacci retracements of 38% and 62% child also two levels of the most followed by investors in forex, including major players such as banks or financial institutions.
5. Trend lines
One of the simplest graphical tools and effective Trendlines child. Draw a straight line connecting two points on the graph. If the trend is on the rise, below the line connecting two points or lower is taken.
If the trend is down, a line is drawn on the chart is also joining two points or higher. Prices often meet these trendlines when approaching. When a trend line is broken, it is often a sign of a change in the overall trend.
6. Moving Averages
Moving averages often provide buy and sell signals, why it is important to keep in mind. With the help of moving averages, it is possible to determine the status of a real trend.
One of the most common ways to use moving averages is the use of two different averages a graph, and wait for the passage of averages. If we have an uptrend for example, and the prices were in a correction, when a faster moving average (10 days for example) passes over a slower average (20 days for example) this is probably a good buy.
7. oscillators
These help us identify a market in a state of overbought or oversold. While moving averages provide a confirmation of the market trend, oscillators can often tell the right time to open a business.
Two index the most common oscillators children relative strength (RSI) and the Stochastic. Both oscillators operate on a scale of 0 to 100. When the RSI is above 70, the feed effect during the purchase, and when it is less than 30, which indicates power overbooking. The values of overbought / oversold Stochastic for children of 80 and 20.
One of the most useful signals providing oscillators famous children differences. A divergence occurs when the direction of the oscillator signal differs depending on the direction of the price itself. Such situations usually strong child indicative of a change in the market trend.
8. The MACD
The indicator of convergence / divergence of the moving average (MACD) combines a system of averages crossing with mobile elements overbought oscillator / oversold moving. A buy signal occurs when the faster line passes over the slower line, both being below zero.
Conversely, a sell signal occurs when the faster line crosses below the slower line, both above zero.
The MACD histogram determines the difference between the two lines and gives an early warning of changes in the trend. A This is called a histogram because it uses vertical bars to show the difference between the two lines.
9. ADX
The Average Directional Movement Index helps determine whether a market is in a trend phase or oscillates between beaches. This tool measures the strength of a trend or direction of the market, but does not specify the meaning of it. For this you need to use other indicators or tools. Usually a reading above 25 is an indication that the market is in a strong trend, rather than fluctuating between tracks.
10. Additional training
Training in technical analysis is essential that every investor should do. Only you can improve and refine through practice and experience in this market. Continue reading and in training is very important to find strategies best suited to work for every person.
Remember to follow strategies based on technical analysis also helps keep the goals and prevents open based only on emotions and impulses operations. Discipline is essential to achieve this.
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