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The Basic of Technical Analysis |
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Support Resistance
Trend Channel Double
top Double bottom Triangle
Head and Shoulders Fibonacci
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EDUCACIÓN FOREX |
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Support A term used
in technical analysis indicating a specific price level at which a currency
will have the inability to cross below. Recurring failure for the price
to move below that point produces a pattern that can usually be shaped by
a straight line. A support level penetrated becomes resistance. |
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Resistance A term
used in technical analysis indicating a specific price level at which a
currency will have the inability to cross above. Recurring failure for the
price to move above that point produces a pattern that can usually be shaped
by a straight line. |
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Trend Trend is simply, the overall
direction prices are moving, UP, DOWN, OR FLAT. |
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Channel - When prices trend
between two parallel trendlines they form a Channel. - When prices
hit the bottom trendline this may be used as a buying area and when prices
hit the upper trendline this may be used as a selling. |
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Double top (reversal formation)
For obvious reasons this is often called an "M-top". The market is failing
twice at a resistance and is reversing then sharply. A break of the support
would indicate further losses towards the target that can be evaluated through
the following procedure. The vertical width of the "M" (price difference)
is projected downwards from the breakpoint of the support. |
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Double bottom (reversal formation)
The opposite of Double top. (often called an "W-top"). When the market is
failing twice at a support and is reversing then sharply. A break of the
resistance would indicate further rising towards the target that can be
evaluated through the following procedure. The vertical width of the "W"
(price difference) is projected downwards from the breakpoint of the resistance. |
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Triangle The triangle formation
can be quite difficult to analyse and the fact that a few different types
of triangles exist doesn´t make this task any easier. |
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Head and Shoulders Formation of
left shoulder forms a new high with a corrective dip, next rally forms higher
high = head, correction from head goes below high of left shoulder and near
as low of the left shoulder correction, breaching up trendline, rally of
right shoulder does not breach head high, retracing half to three quarters
of head correction. |
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Fibonacci PIVOT POINTS. For reasons
that remain unknown, major ratios drawn from Fibonacci numbers describe
a predictable interaction between trend and countertrend movement in markets.
The most important ones to remember are 38,2%, 50% and 61,8%. |
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