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Posts Tagged ‘technical analysis’

You are determined you want to get in control of your future financially. And you’ve studied the stock and commodities market and have some well founded opinions . You’re up to speed on the latest economic indicators and the strength of the dollar . You already know what you really want to do, and in which markets .

Of course, you’ve heard what some of the Wall Street wise say “Figure out what to trade based on the fundamentals but technical analysis should determine decisions on entrance and exits .”

No doubt you know you will need technical analysis training. But to learn technical analysis , you must get a good course under your belt in the topic. How should you go about finding a good one ?

Here are some “street-smart” guidelines for picking a good technical analysis course .

What are the author’s credentials?

Look for an author who has been in the field for many years , who isn’t going to be swept away by a new fad. Wall Street has lots of fads but surprisingly few enduring ideas .

Find out if they are a trader or if they’re an academic?

If the material you need to learn is established, basic, and not far beyond what is available to the public, then reading after an academic is fine for your technical analysis training. However, if you want more advanced techniques , try to find an author that is a successful trader, since they’ll probably focus on the strategies that are most useful .

Will your training in technical analysis apply to all tradable securities?

If you are going to take time to learn all the chart patterns for technical analysis , then you definitely want to make sure they will apply to commodities, futures, Forex trading, and stocks . You’ll waste your time if you decide only to learn about technical analysis that only was applicable to the Dow Jones.

Are techniques complex or straightforward and simple ?

There are certain courses that require you have a background in heavy math, like calculus on a college level . The best options out there are easy to understand by those who have a good education and high school degree

Find out about the course’s cost

Cost is a factor for everyone but watch out for courses that are low cost or even for free. This does not mean they’re not worth anything, because free courses often have great information that is basic, particularly if that information is in the public domain and it can be found in regular books . However, in the financial and trading world , you will only get information according to what you pay and really useful information generated by successful traders probably will cost you. Research the course and if you can talk to someone who has taken the course in the past to determine of there is true value to the technical analyses software, course, or indicators.

Do your homework and look around , and you’ll be able to find the best technical analysis training!

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What are Bollinger bands? It is a technical analysis indicator used in the financial markets, which are used to determine market volatility and relative prices in a period of time determined by the trader.

This technique was developed by John Bollinger in the early 80’s. Bollinger was based on mathematical formulas commonly used by statisticians to determine the standard deviations of the data series and adapted for use in the Forex Market. Bollinger bands are used to determine over-bought and over-sold levels.

The use of Bollinger bands is more effective in markets without trend (ranging markets) and it is suggested that it should be applied in periods of 20 days but it may also be used even in periods of 50 days.

Bollinger bands consist of three lines drawn in relation to price action. These three lines are:

• The middle or central band: it is as a rule; a simple moving average and provides information on market trends. From the middle band it is calculated upper and lower bands by one standard deviation.
• The upper band: is equal to a moving average of 20 periods and 2 standard deviations above the moving average.
• The bottom band: is equal to a moving average of 20 periods and 2 standard deviations below the moving average.

How to use Bollinger bands to invest in Forex?

You can use this indicator to determine market volatility and relative prices for trading in Forex. You must start tracing the 3 lines in the graphs, which provide you with the indications of when you should buy and sell.

In Markets without trends the strategy is to sell in higher bands and compared in the lower bands. The interval between the upper and lower band will provide you with information on the volatility or market activity to trade. This means that the higher the volatility in the market is, the higher the standard deviation and because of that the bands are a little broader. If on the contrary, it happens that there is less volatility in the Forex market, the lower the standard deviation and therefore the bands will be narrower.

On the other hand, if you notice that prices will break through the upper band, in the band that is contrary, we must expect a continuation of current trends.

Calculate the moving average (MA) using the following formula:

MA = (P1+ … + Pn)/n

Pn = Price at an interval n
n = Number of periods

• Subtract the moving average (MA) of each data point (p) used in calculating the moving average. This will give you a list of deviations (d) to help you trade in Forex:
• Finally, calculate the three Bollinger Bands using the following formulas:

Superior Band = MA + 2σ
Media Band = MA
Lower Band = MA-2σ

It is not recommend using this indicator in volatile markets. But if you do use the indicator, you should buy right on the break above the upper band and sell right on the break below the lower band. This is important if you notice that the bands shrink too fast (consolidation), it is likely to occur a violent break, a moment you can use trade.

Bollinger Bands provide you with 3 types of signals:

• Contractions (squeeze) means that there is less volatility in the market.
• Expansion (expansion) means that there is greater market volatility.
• 2.0 STDV close : Breakouts

What you should NEVER do?

• Never buy or sell without observing the candlestick patterns.
• Do not buy or sell if it has not detected a clear breakout of the market.
• Do not use this indicator in periods longer than 100 days.
• If prices touch the band alone, it does not mean that you should buy or sell. Never trade without a preliminary analysis.

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Remember that no investment is risk free and the Bollinger Band indicator in Forex will help you most effectively when it is used in conjunction with other tools.

If you would like to have information about Technical Analysis, Please Click Here: Forex Trading

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Free 5 Day Video Trading Course

The current economic environment is leaving many people uneasy about Share Trading, one only has to watch the daily movements and keep abreast of floundering organisations, to realise how fraught with risk the Share market is. Yes there is still profits in it, and with many shares available at relative bargain prices, there are opportunities to make some serious long term dollars.

With the deregulation of the Foreign Currency Markets or Forex in the 1990s, increasing numbers of people are exploring this as an alternative source or income. There are a variety ways to trade Forex, Long term or Scalping, the list goes on, but there is one thing they all offer the unwary, a high level of risk if you go in with your eyes closed.

So it does not really matter how you decide to approach your foray into Forex trading, if you would like to hang on to your money instead of rip it up at an alarming rate, you are going to have to learn Forex trading before you start committing any hard earned cash.

A good starting point is offered by Babypips.com, at no cost, but they do not teach into how to formulate Forex trading strategies.

What is a Forex trading strategy? Simply put, it is a system for setting money management rules, analysing the progression of a chart, establishing a possible trade entry point (Setup), confirming the entry point, opening a trade, establishing an exist strategy to both minimise losses and to take profits.

A trading strategy is the backbone to Forex trading, without it there is no way of working out why you entered a loosing trade and how to correct it, or why the trade worked and how you could improve it.

When you begin trading, a trading strategy provides the system for trading on a Demo account. These are provided by most brokers and allow you to try your hand, without putting cash at risk. You set an account balance and trade it real time using your trading strategy and watch your balance either grow or vanish. You’ll soon see if the strategy you are testing stacks up!

To get you started with a specific trading strategy for profiting from market rebounds, there is a free video course which will teach you a trade called the “Rubber Band Trade” and shows you what is involved in developing a trading strategy.

It’s a very profitable trading strategy developed by a Professional Trader and teaches all the steps for this specific trade. Once you have trialled this strategy on a Demo account and made it grab pips on a regular basis, you can use it on a real account and start pulling some profitable trades whilst you develop and test other trading strategies that will make your Forex trading a success. 

I regularly use this trading strategy and still trade it when the charts set up correctly. A quick 20-30 pips? Why would you miss the chance?

To start grabbing rebound pip profits get the Free 5 Day Video Trading Course.

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FREE 5 Day Video Trading Course

When I started trading Forex markets, I was aware that fundamental analysis was not an system I could use, but analysing charts and their patterns was something I was much more comfortable with. Search ‘Technical Analysis’ on the web and you will be lost for choice with options, but after much investigation I found Top Dog Trading.

What made me decide to take this course to learn Forex trading?…. A number of things besides the absolute necessity to trade better and to halt my run of losing trades; was that I had a good feel for what Dr Barry Burns was saying on his website and a significant amount of the teaching is supported by plenty of videos which makes it much easier to understand and see what he is saying. The other essential criteria for me is the experience of the trainer and author of the training materials. Barry’s CV is superb, a business man who trades professionally, he is also a accomplished speaker and writer.

So I signed up for his free 5 video course to see if I felt good about his analysis systems.

Prior to this, I had completed several other courses on technical analysis relating to Forex trading but cannot say that I really gained the understanding of trading that would minimise my trading losses, all that has change having met Dr Barry Burns, I now feel confident that I can make the business of trading a success.

With Barry’s courses I have not only learnt how to execute his methods but also embraced a far deeper comprehension of the Forex market & the charts and probably more importantly the money management and personal attitudes that are essential to becoming a professional Forex trader.

You will find Barry details the principals simply and clearly, then gives upto date chart examples with all their confounding moves showing how to make the rules work profitably. This is all done via a huge selection of videos.

Provided you follow the principals Barry explores, you will end up with a very profitable ratio of winning trades with tight control on the losses, so when one does a trade that goes against you (which even the best traders do) the financial pain is not too severe.

Barry’s teachings are the best Forex trading courses that I have come across and I would highly recommend that you give his FREE course a try. This tutorial has 5 videos that introduce you to some of the most powerful trading material I’ve ever seen.

I personally took the course, loved it, and gained a vast amount from it and have progressed to Barry’s more in-depth courses. My wish to learn Forex trading will never again produce the losses of the past.

Try the Free 5 Day Video Trading Course for yourself:

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Technical analysis of the stock market, or any other market such as Forex, Bonds, Futures, is how most traders and investors make their trading decisions. This is as opposed to fundamental analysis which most people more agree is pretty much done as a way of making trading decisions, unless of course you are Warren Buffet!.

You only have to think back to major stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quarterly reports they release gives you a very limited insight into the real health of the company. Whereas the technical charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what is the secret to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to become VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

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