Trading and Investing in the Forex Markets Using Chart Techniques

Trading and Investing in the Forex Markets Using Chart Techniques

The financial markets are made up of people from very diverse backgrounds but whether by long or short term investment these market participants all have a desire to win by varying degrees. Many market participants, especially short term traders are often too interested in the release of some fundamental statement or some rumor or the latest bank recommendations than in the trading price of the asset which leads them to trade and fail because of emotions based trading. The daily price movements, the patterns, the volatility that appear on charts, are for whatever reason, the results of the actions of the crowd. To avoid making decisions based on heightened emotions, it is necessary to create your own plan based on your own analysis.

This book has been developed to demonstrate how a few relatively straight forward techniques can create a plan that does not rely on outside investment recommendations and therefore takes the emotions out of trading. The book demonstrates how to interpret the market price action in the shape of forms or patterns and Japanese candlesticks to help you:
- Find markets that are changing from bullish to bearish and from bearish to bullish
- Locate entry and exit points
- Monitor the position for signs of change.

The book provides a series of charting techniques involving the use of candlesticks as graphical representations of market price actions in the Foreign Exchange markets. It presents methods of chart technical analysis for medium to long-term investing, in a market where despite strong returns when compared with other asset types, it is difficult to realize a profitable return.

The title does not dwell on already-known 'signals' represented by candlestick formations, but concentrates instead on how to confirm these signals by applying a variety of confirmation techniques which form a step-by-step process through the chapters of the book to finish by 'Putting It All Together'.

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Gareth A Burgess has over 10 years experience applying chart techniques to investment analysis creating technical views and strategies and is a dedicated private investor himself. He is founder of the chart workshop (www.chart-workshop.de), a provider of technical views for investors. His current research interests are on moving average based signals from which many trading systems are based today. Burgess studied at the University of Liverpool and the University of Konstanz, Germany, and graduated with honours. Burgess also went on to complete a Masters research degree, M.Phil.

Inhaltsangabe

Contents

Preface

Chapter 1 Candlesticks = Signals

Introduction

Japanese Candlestick Signals

The Single Signals

The Double Candlestick Signals

Chart Analysis Exercise 1

Chart Analysis Exercise - Answers

Summary

Chapter 2 Chart Patterns = Opportunity

Bull Flags

Bear Flags

Bull Pennant

Bear Pennant

Bull Symmetrical Triangle

Bear Symmetrical Triangle

Ascending Triangle

Descending Triangle

Bull Falling Wedge

Bear Rising Wedge

Inverted Head and Shoulders Continuation Pattern

Reversal Patterns

Bullish Head and Shoulders Reversal Pattern

Bearish Head and Shoulders Reversal Pattern

Triple Top Pattern

Triple Bottom Pattern

Double Top

Double Bottom

The Bullish and Bearish "V" Pattern

Bullish "V" Top

Bearish "V" Bottom

Bullish Broadening pattern

Bearish Broadening Pattern

Chart Pattern Examples

Chart Analysis Exercise 2

Chart Analysis Exercise - Answers

Summary

Chapter 3 Buying and Selling = Support and Resistance

Support and Resistance

Trend Lines

Trend Line Channels

Intermediate Trend Lines

Internal Trend Lines

Pivot Lines

Predetermined Pivot Highs and Pivot Lows

Calculated Pivot Lines

Fibonacci Levels

Chart Analysis Exercise 3

Chart Analysis Answers

Chart Analysis Exercise 4

Chart Analysis Answers

Summary

Chapter 4 Applying Confirmation = Confidence Building

Simple Moving Averages

Simple Moving Average Channel

Chart Analysis Exercise 5

Chart Analysis Answers

Momentum Oscillators

The RSI Oscillator

The Stochastic Oscillator

The MACD - Histogram

Chart Analysis Exercise 6

Chart Analysis Answers

Chart Analysis Exercise 7

Chart Analysis Answers

Summary

Chapter 5 Entry and Exit = Right or Wrong

Climax Volume

Pivot Lines for entry and exit

High/Low/Close + High/Low calculated pivot lines

Candlesticks on short term charts

Patterns on short term charts

Summary

Chapter 6 Putting it all together = Practice and Patience

Find the technical picture

Creating a Watch List

Money Management

Summary

A Word on Filters

A Word on Recommendations

Final Word

Appendix 1

Further Reading

Index