The Forex market changes, and changes cyclically. What benefit does this offer us? The most direct: this means that situations regularly arise in Forex when price behavior becomes as predictable as possible. And if we can predict the price, then we can make money on the market. One question remains: on what basis can we judge the predictability of the market?

Technical analysis is what helps traders predict market behavior and increase their deposits.

If you want to make money on Forex using technical analysis, click “learn”!

The Forex market, for both insiders and beginners, is a mystery. The trading “dinosaurs” could not reveal the exact pattern of price movement on Forex, and the gurus of the modern financial market cannot comprehend its essence. Everyone who once discovered Forex tried to unravel it, becoming more sophisticated in the ways, methods and tools of trading.

We should pay tribute to the traders who stood at the origins of the financial market. They were the “pioneers” of Forex and the “collectors” of the primary knowledge base on which all trading tools and Forex trading strategies are based today.

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What do we mean by “Technical Analysis”?

Their result practical experience and all the knowledge they accumulated once formed the basis of the harmonious logical system of Charles Dow, a legendary trader and professional journalist. His system, later expanded and refined, is known to us under the name “Fundamentals of Forex Technical Analysis”. In this article we will talk about what it is, for what purposes, where and how it is used.

To begin with, we should remember that another powerful method of market research is fundamental analysis (FA). Without going into details, the difference between them can be briefly described as follows:

Fundamental Analysis takes into account macroeconomic parameters, political events, various rumors and news, and the behavior of the market crowd that influence price movements. FA gives good forecasts regarding its movement in the future, but within the framework of long-term investment. This trading operations, which take at least 3 months. Using FA, it is impossible, for example, to determine the strength and direction of a trend, to find patterns of reversal or continuation of a trend, or to determine probable entry points into the market.

Technical analysis– this is, in a way, the antipode of FA, based on mathematical algorithms for processing price data over a historical time period. Short-term operations fit into a period of time from several minutes to 1 month. Longer time periods reduce the effectiveness of using TA in analyzing market situations.

Traders use a technical analysis system to determine behavior foreign exchange market. Technical indicators are used to predict price movement - determine the direction of its movement, probable entry points into the market and the size of possible profit.

Forecasting future price movements is based on analyzing its past behavior over a certain period of time. Using the technical analysis method you can:

1. determine the current ratio of buyers and sellers in the market;
2. track fluctuations market value ;
3. determine the price trend– find patterns of trend reversal or continuation;
4. predict the probability of growth/decrease in market value;
5. monitor pricing on the foreign exchange and stock markets.

It is clear that a trader analyzes the foreign exchange market using the method that best suits the investment plans of his trading deposit.

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Charles Dow and the Basic Principles of TA

TA is a universal method in the study of any financial assets – shares, options or futures, currency pairs. In a series of articles by Charles Dow in the WallStreet Jornal (1900-1902), he highlighted three main principles, on which his theory of technical analysis is built:

The market is “omnivorous”

The pricing process is influenced by many factors - everything that happens in the world, one way or another, has an impact on the formation market price. The current quote includes, for example, economic and political news, natural disasters, projected market trends and even, market players' expectations.

Cyclicity of events

The price is moving chaotic, but at the same time, in this movement there is also some pattern. The method of technical analysis allows us to trace this pattern over a long historical period. At one time, Charles Dow drew attention to the stability of market formations, which explains the tendency for prices to return to their previous positions. This happens because market participants tend to react to some events in the same way, regardless of the time and nature of their origin.

By studying the reason for the occurrence of these events, their development and the market’s reaction to them, it is possible to make forecasts for a similar situation in the present. It is this factor that underlies the development of standard TA graphic figures - these are, for example, models of price reversal or models of continuation of its movement. With their help, traders analyze price behavior over a historical period of time and predict its movement in the future. This feature of the market is also used by technical analysis to construct mathematical algorithms and determine the logic of the operation of technical indicators.

Mr. Trend

The price movement is not accidental. If at one time period its movement seems chaotic, then at another time period one can see that it is moving in one specific direction. This price movement is called a “trend” and there are three types of it:

1. Downtrend(“downtrend” or “bearish” trend – falling price);
2. Uptrend(“uptrend” or “bullish” trend – rising price);
3. Flat (“sideways” or “sideways” - the price moves in a sideways direction).

Figure 1. Types of trend

Despite the sharp amplitude price movements, it can be determined that they are part of another trend.

Each of the above types of trend is characterized by the following time periods of price movement:

Main (primary)– affects long-term trading operations that take into account price movements over one year. Hedge funds and large market players operate during this period.

Secondary– here, in the interval of 1–6 months, a price correction and its rollbacks (of the main period) are observed. It is during this time period that, for the most part, the market crowd works.

Small– this period, lasting from a couple of minutes to several hours, is characterized by the formation of short-term multidirectional price impulses. To a greater extent, their appearance is associated with events studied by fundamental analysis, and to a lesser extent - with events studied by technical analysis. This period is used for intraday trading and scalping.

According to Charles Dow theory, directional price movement is determined at any point in time. Practice shows that almost 70% of the time the price is in a flat and only 30% of the time it moves in a direction. In lateral movement it can move almost linearly or with a wide amplitude between max/min points.

In both cases, the trader can easily conduct medium- or long-term chart analysis.

The technical analysis system also has others important rules, which read as follows:

1. When determining a trend, its change, development and movement must be confirmed by volumes.

   There is some debate among analysts about the extent to which market volumes can influence the accuracy of forecasts. This is especially true for Forex, since there is no information on volumes for open transactions. The basic rule must always be observed - volumes must grow, both when the market falls and when the market rises. Therefore, for example, if technical analysis does not confirm a new trend in volume, it can be considered short-term.

2. The lifespan of any trend is determined by the formation of a reversal signal.

   This rule in Forex is considered important: closing the current position and opening a new deal in the opposite direction is possible only after confirmation of a trend reversal.

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How is the price displayed on the chart?

For price analysis and forecasting it is important to understand the visualization of its movement on the chart. You should also know what a “time frame” is, since all methods of technical analysis take into account quote data for a certain period of time. Let's first look at the timeframes themselves, and then we'll look at how the price movement is displayed on the chart.

Timeframe

This is a term denoting a certain period of time in which price changes and movements occurred. The names of timeframes are the same for all trading terminals - this is an alphanumeric designation of nine time periods. Letter is an abbreviation for the name of the time interval itself (Minute, Hour, Day, etc.), and number next to it shows its “temporary” value:

Figure 2. List of timeframes

As you can see, working with timeframes is not particularly difficult. There is no need to try to “mindlessly” memorize their names, you just need to understand the logic of their designation. You can select a period in the toolbar of the trading terminal through the built-in panel “ Selecting a TF"or using the icon " Periods» with a drop-down list of TFs.

Figure 3. Selecting a time frame (TF) in the trading terminal

On the graph, the intervals are separated by vertical dotted lines. It is clear that for each currency instrument, for example, in one working day on H1 there will be 24 (24 hours in a day: 1 hour = 24) such periods. On M15 there will be more such separators:

(24 hours => 24 x 60 minutes = 1440 minutes => 1440 minutes: 15 minutes = 96)

If you are interested, calculate yourself how many hourly periods there will be in 1 day or 1 month.

In the settings of the terminal properties window, you can allow/disable the display of period separators on the chart:

Figure 4. Displaying period separators on the chart

You can call this contextual window by right-clicking on the background of the working chart of the selected currency pair.

Types of price chart

To conduct a qualitative analysis of the foreign exchange market and study its trends, you should choose the most convenient option for displaying prices on the chart. In addition to the trader’s personal preferences, this issue also takes into account the features of the trading strategy he is using. Let's look at what types of charts are “built into” the trading terminal and placed on the toolbar as a separate block:

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Technical analysis methods

All methods of market analysis and forecasting can be divided into two types - graphic And mathematical.

Graphical methods

These include methods that study the price chart according to certain formations - graphic figures, candle models or patterns. These are visually distinguishable formations; their appearance on the chart is associated with the patterned response of market players to certain similar conditions. All graphic formations have two basic functions:

• Forecasting the direction of price movement.
• Calculation of potential profit(determining the magnitude of price movement).

Types of graphic figures

Classic technical analysis graphic figures are universal tools for all types of markets. They also work well on all timeframes and do not prohibit traders from additionally using technical indicators.

Mathematical methods

These research methods are based on mathematical analysis of historical price movement data. Technical indicators are special technical analysis tools that can be used to track the dynamics of price changes. These, for example, include:

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Let's sum it up

Using TA methods, a trader can carry out in-depth analysis of the market situation. He has many different tools in his arsenal. All of them, both graphical and mathematical, are designed to solve specific problems. They can be easily combined with each other, expanding the trader’s capabilities, reducing the risk of loss and increasing his chance of profit.

The main tenet of technical analysis is that You can’t make a decision using only one tool. Data from one instrument should be supported by data from one or two other instruments belonging to different groups.

Almost any participant in trading in the foreign exchange market knows that technical analysis of the international Forex currency market is a widespread way of predicting changes in the price of foreign exchange quotes. Technical analysis of events Forex market, including daily, is formed by traders on charts of currency quotes for a certain period of time. In other words, technical analysis of the Forex market means a detailed study of changes in currency quotes, with the help of which a trader can determine possible changes in the trend in the future.

The most important elements of Forex technical analysis

The technical analysis of the Forex market provided to the trader is divided into several categories and subtypes. One of the most popular types of analytics is candlestick analysis, the essence of which is to find in the history of currency quotes typical patterns of a trend reversal or continuation (Double Top, Triangle, Head and Shoulders, Wedge, etc.) . The appearance of any of the above figures on the chart means that the trader can predict future price movements, as well as the possible moment of its breakout.

Regarding additional, auxiliary tools in the technical analysis of the foreign exchange market, it is necessary to mention such an important component as technical indicators integrated in each trading platform. There are many types of such indicators, so any trading participant can develop his own trading strategy for any financial instrument, based on the performance of one or another indicator.

In general, technical analysis of the Forex market is recommended for novice traders, since various automated programs, indicators and advisors associated with it are a significant help in carrying out trading operations.

The main way to study the Forex market is technical analysis, which is forecasting future price movements based on their past behavior. With its help, you can track fluctuations in market value and determine its possible rise or fall. Most often, technical analysis is used to track pricing on stock and currency exchanges. Partially the basics are described in the article -

Forex technical analysis concept

When evaluating the information obtained as a result of technical analysis, the trader receives all kinds of forecasting tools. Most often, when analyzing the foreign exchange market, they rely on:

Forecast from the site

Examples of technical analysis

But the most effective assessment tool is a combination of all methods for forecasting price movements.

Articles about technical analysis

Axioms of technical analysis

Price changes reflect all information

This axiom states that all the information needed to analyze value is already included in the price and trading volume. And based on the dynamics of their relationship, it is possible to predict the development of the market. Technical analysis is convenient because it does not require studying all external factors influencing the foreign exchange market, and makes it possible to quickly and accurately obtain a forecast.

Price movements are subject to trends.

The meaning of this statement is that price movements are not random, but have certain trends. Consequently, it is possible to divide the time series of prices into intervals during which the change occurs in one direction. Therefore, price change graphs have a smooth wave-like shape, consisting of peaks of rising prices and troughs. Hence the identification of three main trends in the development of the Forex market - an upward trend (when the price rises), a downward trend (the price falls) and a sideways trend (the price remains unchanged).

History repeats itself.

The essence of the axiom is that every event, be it the history of mankind or the situation on the Forex currency market, is repeated because the reaction of the participants remains the same. And knowing the past, you can easily predict situations in the future. By studying market events, you can find similar ones in the past, view their development and draw conclusions about how they may continue. Based on this axiom, a number of traditional standard drawings (“figures”) have been developed to predict price behavior. The very first method for market analysis is considered to be a diagram created by Japanese rice traders.

Technical analysis methods

To correctly and most accurately predict price movements in the foreign exchange market, many technical analysis methods are used.

The main and oldest method is graphical analysis, based on plotting. They clearly demonstrate the behavior of prices on Forex, forming standard patterns by which you can easily determine the direction of movement. There are different types of patterns: continuation patterns, which indicate that the price will move in the same direction, reversal patterns, which indicate a change in trend in the near future, etc. This method does not have sufficient accuracy, but is effective, convenient and easy to use.

FOREX Technical Analysis Figures

A more complex and time-consuming method of technical analysis is the mathematical method of forecasting. This method is based on the use of various mathematical formulas and calculations. With its help, so-called market indicators are constructed, which indicate whether the market is “oversold” or “overbought.” The mathematical method itself is divided into two directions – “trend” and “flat”.

The essence of the “trend” direction is the construction, according to a certain formula, of a middle line that crosses the entire chart. Depending on what level relative to this line the time series of prices is at, assumptions are made about the long-term development of the foreign exchange market. The most difficult thing in this method of technical analysis is to find a formula for building a trend. The direction of trading in a “flat” or sideways trend is based on the construction of lines that refractly show the proximity to price extremes. Each method is scaled and at different scales, trend trading may seem flat, and vice versa, this is the cornerstone of technical analysis, it is difficult to find a point of relativity from which to start reasoning.

And the last method of technical analysis is cyclical, which is based on the theory of cycles, according to which all changes occur cyclically, like night and day. As a result of this method, entire trading systems(Forex trading robots), which are able to answer the eternal question of a trader: buy or sell during .

Thus, using Forex technical analysis, you can predict price movements with high probability, thereby receiving a stable income when working in the foreign exchange market.

Online testing of indicator readings

What is technical analysis? Something without which it is impossible to predict price movements. For several hundred years now, it is thanks to him that millions of traders pretend to be smart and try to understand where the price will go.

How else? If you're a rice trader on an ancient stock exchange, you need a way to predict when you can profit and when you should avoid the market. And it doesn’t matter that it’s the 18th century, the toilet is on the street, and there are still 200 years before the invention of the telephone.

The first obstacle – the word “technical” – often scares away. The name is very unfortunate. Because when you dig under the hood of a car, isn’t this less of a “technical analysis” of a certain mechanism? He is the one.

But with technical analysis in binary options, forex or the stock market, everything is different. Here the analyst works with the price movement according to the chart and learns to find all the necessary patterns of this process.

In the West they are also called chartists, from the word “chart” - graph. In general, replace the word “technical” with “graphical” and it will be less scary.

Technical analysis is when you poke a pen into the screen (just kidding).

Why does technical analysis work at all? How can lines on a chart determine price movement? All that is on the chart is just the balance of supply and demand. When demand greatly exceeds supply, or vice versa, trend.

In other words, in technical analysis we do nothing more than study the life of the market, its emotional state, optimism and pessimism of traders.

So technical can be safely replaced with “behavioural”, “graphic” or even “emotional”. And whoever came up with the idea of ​​using “technical stuff” to scare newcomers should be spanked.

History of technical analysis

This is a much older thing than you might imagine. For example, some provisions of technical analysis were developed by Joseph de la Vega in the 17th century for trading in the Dutch markets.

In the 18th century, Homma Munehisa, a Japanese rice trader, developed what would become modern Japanese candles. Just imagine - these candles have been working for over 200 years.

In the 1920s, Richard Schabacker published several books on technical analysis, which developed the work of Charles Dow and Peter Hamilton in their books “Theory stock market” and “Technical analysis of markets”.

Finally, in 1948, Robert Edwards and John Magee published the legendary book “Technical Analysis of Stock Trends,” which is still being republished by Amacom and has taken pride of place in my electronic library.

Early technical analysis was based exclusively on graphical methods, since computers and statistics were, to put it mildly, strained. And Charles Dow – he actually started with point-tac-toe charts.

At the end of the 19th century, Charles Dow developed what was then called "" and which became the basis for modern technical analysis. The Dow Theory still works today, just as it did on day one. , William Gunn, Richard Wyckoff - all these guys at the beginning of the 20th century created something that is still used today. Over the past decades, many new technical tools and theories have emerged as computer technology has made incredible leaps forward.

Industry

The main industry organization is the International Federation of Technical Analysts (IFTA), of which, by the way, he was chairman for several years. In the USA there is the Association of Technical Analysts (Market Technicians Association, MTA) and the American Association of Professional Technical Analysts, AAPTA.

There are similar organizations in the UK, Canada, Australia, etc. The MTA also offers a 3-level Chartered Market Technician (CMT) exam.

Basics of Technical Analysis

Technical analysis is very multifaceted. These are charts and models, technical indicators and oscillators, a combination of various techniques and methods. This is volume data. But in all its diversity, there are only three key postulates:

• all factors influencing the price are already included in the schedule;
• the price always moves in trends;
• history repeats itself.

Let's go over them.

Everything is included in the price

The price and its movement, which we see on the chart, already contain all the factors that influenced it.

This is why you can predict the price movement of FB (Facebook shares) without having the slightest idea what economic condition company, its balance sheet, what kind of financial indicators.

In fact, the price includes the ratio of supply and demand for a certain asset, be it a stock or a currency pair - and this, it would seem, is enough for a technical analyst.

However, we must strive for universality. It is important to combine methods. It is not necessary to delve into the depths of fundamental analysis, but you need to know what important news is coming out today.

This is what different ones are used for. One of them is located under my . News with “three heads” usually gives the market an impulse that is very difficult to predict with “bare” technical analysis.

The price is trending

Second important aspect. The price, one way or another, always moves in a certain, obvious direction - a trend. It is on trends that money is made. That is why all these proverbs in books like “trend is your friend”, etc.

The vast majority of strategies are based on trends. Moreover, each trend consists of small microtrends. But we'll talk about this in more detail a little later.

History repeats itself

What happened before will happen again. This is why candlestick patterns and reversal patterns work. Price has a cyclical nature because market participants have a similar psychology and repeat their actions over and over again.

This is why many models that were developed in ancient times work. Let’s say this trend reversal pattern “ W” is more than 100 years old - and the screenshot was taken a few days ago. This is such a time machine.

Assets

Technical analysis works for any asset (example):

• currency pairs (EUR/USD);
• shares (AAPL);
• indices (S&P 500);
• futures (CL);
• raw materials (UKOIL).

Technical or fundamental analysis

There are 2 schools of market analysis - technical and fundamental. Although there are some oddities like, mom help, “ ” (trading according to the phases of the moon; no, no, I’m not even joking). Adherents of these methods like to argue, but, in reality, for a successful forecast you need to be friends with both.

In technical analysis, only price movement matters. How it moves, with what speed and amplitude, what is the impulse of its growth or fall, what candles are formed and so on.

Fundamentalists love it economic forces. In the case of shares, this is the company's balance sheet, balance sheet working capital(the movement of money into and out of the company, also known as cash flow), profit and loss statements and the like.

In fundamental analysis, they prefer large time frames, sometimes even for a year. In technical analysis, you can successfully work even on a 5-minute chart.

For us, in binary options, technical analysis with the addition of fundamentals is just what the doctor ordered. We work according to the canons of technical analysis, look at important news and this will be quite enough.

Trends

The basis of technical analysis is trend. This is a price movement in a certain direction.

Uptrend:

Downtrend:

Between trends, the price likes to rest in a sideways movement when there is no trend as such:

Wave-like trends

Unfortunately, if trends were straight as an arrow, your cat could make money too. However, trends rarely follow a straight line. Usually this is a combination of the highest and lower levels, of which the trend consists.

For example, an upward trend can often be decomposed into the following micro-waves:

At the same time, in reality the waves, of course, are not as beautiful as in the diagram, and in a smooth, beautiful trend the price rarely moves (although sometimes it does happen).

Trend duration

All trends can be divided into:

• short-term;
• mid-term;
• long-term.

To determine the duration of a trend, you need to use higher timeframes. In classical theory, trends are divided into annual, monthly and daily. But this is relevant, in general, for stock trading.

In binary options, as a rule, we only need:

• determine the long-term trend on a 1-day chart;
• medium-term ones will be at 1-4 hours;
• short-term at 5 and 15 minutes.

Thus, we see an oil painting when one long-term trend consists of several medium- and short-term ones.

This is often a mistake newbies make. They set one frame, like 5 minutes, identify trends, but forget to identify medium- and long-term trends. And then they wonder why the price suddenly reversed within 5 minutes. Yes, because on another frame the picture looks different.

Let's say what do you see in these 5 minutes? Is the price abnormally falling down after a sideways movement? Undoubtedly.

However, let's look at the same pair at 4 o'clock.

It turns out that our “sustained downtrend” at 5 minutes is just one red candle. And the medium- and long-term trend has been going up for several weeks. Therefore, our 5-minute “trend” is temporary and short-lived.

Trend lines

This is a simple and effective technique for identifying trends. It is enough to draw a line along the maximum candles to determine the further price behavior. Trend lines help determine not only the trend, but also its reversal.

For a downward trend, the line is drawn at the top:

For an upward trend, accordingly, the line is drawn below:

Price behavior immediately becomes more orderly. It will either rebound from the next contact with the line, or it will break through it, after which the trend can be considered complete.

Channels

The channel is a development of the trend line idea, which is very popular. Prices often follow these channels and give us a lot of trading opportunities.

The channel can go up, down or horizontal flat(most delicious). Trading in the channel continues until the price breaks through it.

There are a lot of advantages - the direction of the trend is immediately visible, the channel walls act as points of “rebound” for the price, in general, everyone is happy.

Pay attention to the shadows of the candles - they tell you where in the channel it is best to enter.

You can and should use the channel according to the trend.

Two main thoughts about trends that you will find in books:

• trend is your friend;
• don't work against the trend.

Support and resistance

After the trend and channels, the next important question is the lines (levels) of support and resistance, abbreviated as “p/s”. These are conditional lines from which the price previously “bounced”.

• Resistance is the line that is drawn at the top. She “resists” and does not allow the price to rise.
• Support, on the contrary, does not allow the price to fall lower and “supports” it.

Why? This is a matter of psychology, as well as the balance of supply and demand. There are no people willing to buy at such a high price? This means that the price does not rise above a certain level. For the time being, for the time being. Until a buyer comes who has seen enough positive news and begins to buy and buy again. Result? The price is going up.

If the price confidently “breaks” the line, it means the market psychology has changed, this is a breakout. And soon the market will find new support and new resistance.

The magic of round numbers

The psychology behind these lines can also be judged by how often these lines form on round numbers such as 10, 20, 35, 50 and especially 100. These psychological levels force traders to buy and sell again and again.

Let's say the stock price is $120, it falls and approaches $100. Many traders begin to buy, despite the fall, being confident that the price will not be able to break through such an important psychological barrier with the number 100. This often happens.

As a result, the price reaches a flat number and “bounces” from it, being unable to cope with it. The support line works in such a way that it seems to “support” the price from below.

The opposite picture is also true, when the price rises, reaches 100 and bounces down. The resistance line has worked in such a way that it “resists” and does not allow the price to move further.

Role reversal

Sooner or later, the support or resistance level will be broken. Price will inevitably have enough strength for this. Then their roles change. What was resistance will become support and vice versa.

Any price always has its own level of support and resistance. Sometimes a so-called “false breakout” occurs when the price tried to break through the p/s, but failed.

Many traders trade only along support and resistance lines. This is the most important concept in technical analysis, perhaps even the most important. The more often the price bounces from a certain price level, the more reliable it is, especially on higher frames.

However, a breakout of the line will happen sooner or later - so don’t expect the price to always bounce off the lines like a ball.

In addition, important news gives the market such an impulse that it breaks even the most reliable p/s. Therefore, you must stay up to date with major economic news. Even in order not to trade at the time of the announcement of, say, economic indicators (those “3-headed” news).

Channel of support and resistance

It would be a mistake to always wait for an exact rebound. Usually the price hangs around the support and resistance lines in a small channel. That is why, instead of lines, they often draw a channel that covers the shadows of the candles that “felt” the line, but were unable to break through it.

Focusing on such a channel, it is easier to understand where it is better to enter on a rebound in binary options and with what expiration.

Volumes

Price movement is displayed various types graphs, the main ones are only 3:

• candle;
• linear;
• bars.

Candlestick chart

The candlestick chart was invented by the gloomy Japanese man from the picture at the beginning of this article. A candlestick is a very effective indicator that shows the selected period of time over which the price moved.

The structure of a candle looks like this:

Candlestick analysis

Since a candle is an indicator, it means it must show something more than just price movement over a time frame. This is true. That is why there is such a discipline as candlestick analysis.

It has been studying the types of candlesticks and their combinations for decades, which allows us to judge changes in the nature of price movement.

Both candles of a certain shape and their combinations are used.

Candlestick combination “bearish engulfing”:

There are hundreds of candlestick combinations. There is no need to cram them. In practice, when contemplating a chart, you need to select several combinations that attracted your attention and learn to find them in different conditions and on any time frames.

The classic of candlestick analysis, the book “” by Steve Nison can be downloaded from the forum.

Price action

There are a colossal number of candlestick combinations. There are several hundred of them in Neeson's books alone. However, here's the thing. All these books, being classics of technical analysis, were sometimes written several decades ago.

But the markets have changed a lot since then. Now 70% of trades that we see on the charts are carried out by high-frequency robots. Millions of traders trade from home, without leaving their chairs.

That is why price action is becoming more and more relevant ( price action). This is cutting-edge candlestick analysis for the fast markets of the 21st century.

Well-known Western traders, such as , and many others, have developed their own price action systems, which should be studied only after you have learned the basics of technical/fundamental analysis.

An example of price action translation from Neil Fuller with his comments:

Line graph

Linear is the simplest chart, just a line, which allows you to quickly determine the direction of price movement. The line is formed by combining closing prices for the selected timeframe.

As a result, on a linear one you cannot see the highest price for the selected time period (timeframe) or the opening price. However, the closing price is considered more important indicator.

A line chart is only suitable for quickly determining a trend.

Bars

Western traders love bars, and many strategies are focused specifically on their use. The principle is the same as candles, but the visualization method is different. We see the opening and closing prices, the maximum and minimum prices for the selected timeframe.

In general, it doesn’t matter what you use – the main thing is that it helps in your forecasts.

The most popular is, naturally, candlestick chart. As for exotic charts, such as Renko, Kagi or tic-tac-toe, they are very rare and are used by experienced stock traders.

Technical analysis figures

History repeats itself - this is how we started this article, remember? It is on this concept that the theme of price figures is built. These figures are repeated constantly, and many of them signal the same thing.

Of course, there is no figure that will always, 100% indicate the correct price movement. However, they are extremely useful in analysis. If you find them patiently, they will show excellent results.

All figures are divided into:

• trend figures;
• reversal figures.

There are many figures and we will consider only the important ones.

Remember, this is important. Reversal patterns work mainly from the 15-minute time frame and after a fairly strong trend.

In the sideways low-volatility movement of the figure, it is almost useless.

Head and shoulders

This is the most popular figure in technical analysis. It is very old, it is described in thousands of textbooks. First of all, you should learn to find it.

The figure consists of a head – the maximum price value – and two “shoulders”, also known as intermediate peaks. Scheme:

In reality, the price will not be as beautiful as in the diagram, so it is enough to simply focus on the peak values ​​to determine the shoulders and head.

Shoulders can be different sizes, that's okay. The main thing is that the head should be higher than the shoulders.

For the figure you need to draw the so-called “neck line”. As soon as the price goes beyond this line, a trend reversal begins.

By the way, on the live chart for drawing the head and shoulders there is a special Head & Shoulders tool (like the famous shampoo). This is exactly how they were depicted in the examples:

Head and shoulders is a basic reversal pattern that has been around for many years. You definitely need to know it.

Figure “Cup”

A coffee cup with a handle is quite common. Super precision in drawing it is not required, we are not artists here. The main thing is to catch the shape of the price movement by drawing a line according to the rules of trend lines.

Double top: regular and inverted

A very popular figure indicating a trend reversal. Like “head and shoulders”, it is considered one of the most reliable.

It is formed when the price tries to break through the support or resistance line twice, after which optimism runs out and the price reverses.

Inverted double top

Triangle

It is also one of the main figures of technical analysis, which has been bringing money to traders for over 100 years. Triangles come in three types:

• symmetrical;
• ascending;
• descending.

In fact, the triangle consists of trend lines. In a symmetrical triangle, both trend lines converge equally at one point.

In the other two cases, one of the lines will be horizontal and act as a support or resistance line.

Symmetrical triangle

Descending triangle

Breakout up, along the trend:

Ascending Triangle

The upper side of the triangle acts as resistance:

Figure “Flag”

Fairly common figures. The flag consists of an inclined channel with a “handle”:

Figure “Pennant”

A pennant can be imagined as a triangle with a “handle”. Breakout of the pennant along the trend:

Figure “Wedge”

As you know, we knock out a wedge with a wedge. The figure resembles a symmetrical elongated triangle, directed in a certain direction up or down. A wedge can either confirm a trend or refute it.

As a rule, if the price goes beyond its upper line, then we are talking about confirmation of the trend, if it goes beyond the lower line, it means a trend reversal. Do not forget, of course, to evaluate the situation on higher frames.

Triple top or bottom

Another example of a reversal pattern. There are no obvious heads and shoulders here, but there are clear three lower zones where the price bounced off the support line.

As a rule, after such a triple rebound, you should expect a trend reversal.

Saucer figure

It resembles a cup, just without a handle or the handle will be of a different shape. Typically, such figures indicate a long-term price reversal and perform well on higher timeframes - from 1 hour.

We've looked at some of the most popular figures. There are much more of them - but the article is not rubber.

Gap

A gap is an empty space between candles. It appears between trading periods, including between Friday and Monday. Another option is due to an excessive difference in price between two trading periods (relevant for stocks). Gaps also appear when there is a very strong “jump” in the price.

There are three types of gaps:

• to rupture (accompanied by increased volumes);
• to break away (in a very strong trend);
• at the end (shortly before the price reversal).

Gap trading is another subsection of technical analysis, so I will describe it in more detail in a separate article (this one is already horse-sized).

In any case, gaps are needed, first of all, for the Forex and stock markets; they are rarely used in binary options.

Moving averages

Price rarely moves evenly. Usually this is a wave-like, and sometimes even chaotic movement, in which it is sometimes difficult to find a trend. To deal with this problem, moving averages are used.

This, in fact, is simply the average price level for a certain period of time, such as the “average temperature in the hospital.” Thanks to the sliding ones, chaos turns into smoothed, orderly movement, and the trend is there, right in the palm of your hand.

Types of moving averages

There are several types of moving averages, the main ones are:

• MA (Moving Average) – moving average;
• SMA (Simple Moving Average) – simple moving average;
• WMA (Weighted Moving Average) – weighted moving average;
• EMA (Exponential Moving Average) – exponential moving average.

However, you don't have to stress. The differences between them are not so pronounced. Here are three moving ones from the live chart. As we can see, the sky did not fall to earth:

In fact, some moving averages are simply a little faster than others, say the EMA is faster than the SMA, simply less smoothed. So, on short expirations, you can choose faster moving averages, and on long ones, slow ones.

For the more sophisticated, TradingView has an indicator CM_Ultimate_MA_MTF_V2, which uses 8 moving averages at once:

• SMA (Simple Moving Average).
• EMA (Exponential Moving Average).
• WMA (Weighted Moving Average).
• HullMA (Hull Moving Average).
• VWMA (Volume Weighted Moving Average).
• RMA (Moving Average in RSI).
• TEMA (Triple Exponential Moving Average).
• Tilson T3 (Tilson T3 Moving Average).

But it’s better not to get too carried away by sorting through their varieties.

Using Moving Averages

Moving averages are used to identify three key situations:

• trend;
• trend reversal;
• support and resistance levels.

It is the moving average that allows you to quickly understand what is happening with an asset, whether it is growing or falling. Let's say we set MA 42 and the 4-hour chart takes on completely different shapes.

IN in this case moving average MA 42 worked as a reliable resistance line for EUR/USD for several months. Well, when the candles cross the line, the trend is complete.

Another method of determining the trend is paired moving averages, one short-term and the other long-term. For example, if MA 5 is located above MA 25, the trend is going up. And vice versa:

Moving price reversals are determined in two ways:

• when candles/bars pass through the moving average;
• when the moving averages intersect.

Let's say, after the candles crossed the MA 50 on the 1-hour time frame, it began to fall:

And of course, the most popular application, which you should already know about, is the intersection of moving averages. It is used in a wide variety of strategies.

For example, the intersection of MA 15 and 50, plus the already familiar marubozu reversals.

At the same time, the intersection of moving averages with fairly small values, such as 15 and 35, may indicate a short trend reversal. But when powerful MAs like 50 and 200 intersect, things start to get serious.

Of course, in a flat – when volatility is low – there is no need to focus on intersections.

What moving averages should I use?

There are a huge number of strategies with them. Some of them are already described on the site:

Often they are selected by hand. Change the values ​​until the moving average becomes support or resistance, or shows the picture you want. You can also take a universal “long-playing” option, like MA 100 or 200.

Moving averages are a very popular technical tool that can be found on any professional chart. Therefore, its use is, in fact, mandatory.

Indicators

As you can see, I describe the indicators at the very end. Why? Because this is where they belong. Beginners do the opposite: instead of studying support/resistance lines and the basics of technical analysis, they wildly throw a bunch of indicators onto the chart and get this “beauty”:

Indicators are actually a useful auxiliary tool, nothing more. They help you see price movement and volatility from a variety of angles. Any indicator has two tasks:

• confirm the trend;
• confirm the reversal pattern/pattern.

All indicators presented on a live chart or in any terminal are lagging. This means that the indicator does not predict anything, always follows the price and simply displays the past.

Some of the most popular indicators are oscillators.

Oscillatory indicators

These are one of the most popular types of indicators. They are displayed on a conventional scale, usually from 0 to 100.

• the closer the value is to 100, the more the asset is overbought (a fall is expected);
• the closer to 0 – oversold (a rise is expected).

Intersections and divergences

These are another signals that indicators often give. We have previously talked about moving average crossovers. The same is true for other indicators, like ADX.

ADX crossover confirms trend reversal:

Divergence is another popular condition for many oscillators, when the direction of the indicator and the price diverge, indicating an imminent trend change.

Indicators provide a lot of useful information. They help calculate the strength of price movement, trend direction, volatility and many other indicators.

As a rule, professional traders use, at most, 1-2 indicators, but honed to perfection.

It’s easy to trade based on the indicator, however, it is forbidden, since this is just a mathematical abstraction carried out with living matter - price. Therefore, any indicators are used in conjunction with technical analysis, candlestick patterns, and sometimes with other indicators.

Popular indicators

Let's look at several popular indicators that are often used by professionals in technical analysis.

Accumulation/Distribution (A/D)

One of the most popular volume indicators, which compares price movement with trading volume for the same period.

This joy is only available for stocks and indices, so do not try to use it with currency pairs. Alas, there is no reliable data on volumes for currencies, what you want is an unregulated interbank market.

But for stocks, A/D is often used and is found in a wide variety of strategies.

A/D is used to identify trends. If the A/D line is trending upward, this is an indication that the buying power is becoming greater. At the very peak of A/D, we should expect a price reversal after a period of consolidation.

Average Directional Index (ADX)

An indicator for determining the strength of a trend. It does not indicate its direction, but how strong the current trend is.

On a live chart, ADX is called Directional Movement. It consists of several lines:

• positive direction indicator +DI;
• negative direction indicator –DI.

A plus sign shows the strength of an uptrend, a minus sign – a downtrend. The data is displayed next to the ADX line on a scale between 0 and 100.

You can understand the essence, naturally, by looking at the trend. That's how it is here. Steady downward trend, -DI after crossing above 40, +DI below 20, the ADX line tends to rise, indicating that the downward trend is strengthening.

Aroon

This is a relatively new indicator, created in 1995 (most were developed back in the 70s). The indicator is a trend indicator, its task is to show the presence of an outgoing or upward trend, as well as its strength.

Aroon is also used to identify a new trend. The indicator consists of two lines, red and blue.

The blue line displays the period of time that has passed since the price reached its maximum value during the specified period of time. Red, accordingly, is the opposite. In this case, the time period changes depending on the selected timeframe.

A classic example of using Aroon is a trend reversal. After a long period when blue was at the top and red was at the bottom, they cross and the trend begins to change. For example:

MACD

One of the most famous indicators in technical analysis, which I described in detail here:

Using the power of moving averages, MACD is usually used at intersections:

RSI

Also a very popular trend strength indicator, described here:

Used when overbought and oversold:

On Balance Volume (OBV)

Another famous one technical indicator for stocks and indices, it can be considered trending. Very simple and visual.

It works simply, the total volume for the trading period is taken and a positive or negative value is assigned depending on the price movement during this period.

When the price is up, the volume is assigned a positive value; when the price is down, a negative value is assigned. The total positive or negative value is then added to the total from the start of the measurement.

The main thing in OBV is not its value, but the trend of its line itself. If it shows steady growth, the same should be expected from the price. If the indicator line is sadly boring without a clear direction, the same thing happens with the price.

Stochastic

This is probably the most popular oscillator in the world. And it just so happens that he is very close and understandable to me, which is why he is often visible on my screenshots. Described here:

In general, this is an indicator of momentum - the strength of price movement. In a strong trend, the price approaches its trading “ceiling”, which hints at a subsequent reversal.

Therefore, the main thing they look at in stochastics is the overbought and oversold zones. This is my favorite indicator that complements the foundation of technical analysis.

He is also quite good at divergence, for example:

Technical analysis: summary

Pink ponies poop butterflies. Joke. This was a check to see if you had read the article to the end (probably just skipped it). Let's briefly summarize what technical analysis is.

• All factors are included in the price, it moves with trends, and history repeats itself.
• The price has everything you need to know.
• Technical analysis must be combined with fundamental analysis.
• The price moves in trends: upward and downward, or is in sideways movement (consolidation).
• The trend line is the simplest technical analysis tool.
• A channel is two trend lines that act as support and resistance.
• Support keeps the price from falling, resistance keeps the price from rising.
• Volume is the number of shares or contracts traded. The greater the volume, the stronger the trend.
• There is no normal volume in Forex (currency pairs).
• There are three main types of charts: candlestick, line and bars.
• For binary options They use timeframes up to 1 day, for Forex and stocks – up to a year.
• Technical analysis figures help you find price reversals.
• Head and shoulders are the main price reversal pattern.
• Cup, double/triple top, triangles, flags and pennants are examples of other patterns.
• A gap is a gap between trading periods or during a sharp price movement.
• The moving average helps identify trends and smooth out market noise.
• The indicators are based on a formula that takes into account price movement and volume.
• Popular indicators are A/D, Aroon, ADX, MACD, OBV, Stochastic, RSI.

As you can see, technical analysis is a very voluminous topic. It has been studied for months and years. But this should not be a theoretical discipline for you. Yes, in scientific circles technical analysis is tormented scientifically, and in magazines like Stock and Commodities you will see such examples of technical analysis that you will not sleep after them, but for you and me it is the most real, most practical thing in the world.

Little secret

The main thing I want to advise you is to avoid the mistake of a beginner who throws 10 indicators on the chart and tries to predict something like that. The market is a living mechanism; it is nothing more than the reaction of its participants. On the graphs we see the market balance of supply and demand. Indicators are ordinary mathematical formulas, very simple. Predict global market They can not. Therefore, to achieve success, you need to competently use the entire arsenal of tools: from news, candles, trend lines and p/s to reversal figures, price action and certain indicators.

And a little secret from the future. You will go through a long, difficult path. You will try dozens of indicators and candlestick combinations until it dawns on you that they are all, in essence, equivalent. And it’s not they who are important – but you yourself and your trading psychology. This is why two traders can put the same moving average on the same chart, and then one will give the correct forecast, but the second will not.

After some time, when your head is bursting with knowledge, you will inevitably do the main thing - throw everything out of your head and begin to perceive the chart with fresh eyes. And then a small miracle will happen - you will see the good old tools with completely new eyes. Trend lines, reversal patterns, moving averages, and candlestick patterns will suddenly appear before you in a completely different light. Months of experience and thousands of deals will turn them into something amazing that you never saw when you started.

Trading is magic. In all aspects. The ability to work anywhere in the world with a laptop on your lap, the ability to earn more in an hour than you earned in a month while sitting on your last job. So become a wizard - and wave your magic wand of technical analysis so that this limitless reservoir financial opportunities shared with you a drop of life-giving moisture. In this artistic finale, I walk off into the sunset *upbeat music plays*.

FOREX ANALYSIS: TECHNICAL AND FUNDAMENTAL

Forex analysis is based on monitoring all indicators that affect changes in exchange rates. First of all, these are macroeconomic indicators. These include Country's GDP, inflation, interest rates, etc. Typically, these data are presented in countries' macroeconomic reports. After their release, the exchange rate may change dramatically. The frequency of providing this information can be found in the economic calendar.

Forex technical analysis uses information about changes in exchange rates over different time periods. Based on past or actual data on changes in exchange rates, predictions are made about the value of exchange rates in the future. In this analysis of the foreign exchange market, various mathematical forecasting methods are used to help traders quickly draw conclusions about the situation occurring in the market and quickly make a decision to buy or sell currency.

ANALYSIS IS NOT AN EASY BUSINESS AND OUTSIDE THE CONTROL OF A BEGINNER

It is not easy for a novice trader to understand the variety of information coming from Forex and other financial markets. Therefore, forex analysis, which is provided by large brokers, in particular TeleTrade, comes to the rescue. On the company website you will always find Forex technical analysis and stock market analysis, fundamental research and recommendations on forex. Market analysis is a difficult task and beyond the control of a beginner. Therefore, you need to rely only on professional research. Through prompt and high-quality analytics of the Forex market, you can minimize your risks and make your investments as profitable as possible. And you won’t miss the trend. By the way, it is from professional analysts that you can learn to accurately determine the Forex trend, do technical analysis of the market and navigate the sea of ​​current and significant events in the Forex currency market and other markets. To ensure that you have a complete picture of events, the market analysis section is updated daily.

This page regularly posts information from TeleTrade experts throughout the day based on a graphical analysis of the dynamics of popular currency pairs and gold.

The image combines several types of data - support and resistance lines, trading history and candlestick analysis chart. Each certificate is accompanied by comments about possible price movements.

Analytics on various currency pairs are published every 15 minutes. For each instrument, morning and afternoon certificates are issued, as well as additional certificates at night.

BASIC AXIOMS ​​OF FOREX TECHNICAL ANALYSIS

Forex technical analysis is based on three main axioms:

• Prices take everything into account

This assumes that all information that can affect the exchange rate is already taken into account in this course and in Forex technical analysis there is no need to further study the dependence of the exchange rate on political and macroeconomic factors.

• The price follows the trend

This axiom says that the exchange rate does not change randomly, but follows a certain trend or Forex trend. Therefore, time series of changes in exchange rates can be divided into certain intervals in which the exchange rate moved in one direction and was subject to one of three trends: downward, upward or sideways.

• History repeats itself

From this axiom it follows that movements in exchange rates are usually cyclical in nature - upswings are followed by downturns, sideways market movements and new upswings, and if certain methods of technical analysis worked in the past, then they will work in the future, since it is based on sustainable human psychology. That is, it is said that Forex trends tend to repeat themselves.

The process of technical analysis of the foreign exchange market is based on identifying individual trends and (or) so-called patterns - typical patterns or shapes that form on charts. The most famous figures in technical analysis are “Flag”, “Double Top”, “Triple Top”. A variation of the triple top is the Head and Shoulders pattern, in which the first and third tops are lower than the second. Also, when analyzing Forex, there are patterns in the form of triangles. Based on the identified trends and using various methods of technical analysis, conclusions are drawn about where the currency rate will go next and a decision is made on the best option for entering and exiting a transaction.

Despite the fact that many currency traders They consider it more rational to use technical analysis; in our opinion, it is not worth using only it when trading. Likewise, you should not limit yourself to using exclusively fundamental Forex analysis. In reality, their competent combination is the basis successful trading currencies. Therefore, if you want your trading to generate high income, you should pay equal attention to both fundamental and technical analysis of Forex.