Technical analysis figures

Technical analysis figures

technical figures
analysis helps traders see the graphic patterns of price movements and
persuade preponderance of probability in their favor. Graphic shapes characterize
the direction of movement of currency exchange rate, showing consolidation, continuation of the movement
and turning.

As the graphical
Analysis is part of the technical analysis, the knowledge of their qualifications increases
trader, and in some moments even increases of profitable trading system.

why figures
technical analysis exist?

One of the main
technical analysis postulates is the idea that the market is moving in
a certain direction, tends.

So, figure
technical analysis arise in the process of price movement, as a natural phenomenon,
which describes the slowing, stopping and continuing the movement. Because the
graphic shapes are repeated property, then we have to study them for
more accurately predict the currency market.

Graphic shapes on
chart model graphic form. These models help the trader
to determine the current state of the market: a trend or reversal.

In technical analysis,
divide the groups of graphic figures:

1.
Graphic figures to continue the movement.

2.
Graphic reversal patterns.

3.
Graphic shapes of uncertainty.

the trader
graphic shapes give signals about closing their positions and prepare for the
reversal of the main trend of the currency pair, or the opening of new orders. True,
not so simple in the Forex market and there are graphic shapes of technical
analysis that can show and spread, and the continuation of the movement, for example,
triangles and rectangles.

first consider
image reversal patterns.

reversal patterns in
technical analysis are the result of changing the current direction of motion
prices. The first signal is a reversal of the trend line break key.
However, as you know from the practice in the Forex market there are also false breakout
trend lines.

In technical analysis,
there is a rule: the larger the graphic model, the stronger the movement.
In addition, major chart patterns in technical analysis are those
figures that are of sufficient height and width. It is clear that we have a height
We will not measure line, and here we mean the volatility of price movement.
And, referring to the width of the figure, we mean the period of time that is required
for its construction.

By graphic shapes
reversal include:

·
Head and shoulders (Head and shoulders).

·
an inverted head and shoulders (Reverse head and shoulders).

·
double top (Double top).

·
double bottom (Double bottom).

·
triple top (Trople top).

·
triple bottom (Triple bottom).

By graphic shapes
continuation of the trend include:

·
triangle (Triangle).

·
flag (Flag).

·
pennant (Penant).

·
wedge (Wedge).

The figure of “head and shoulders”
One of the most common graphic technical analysis figures.
Figure formed “head and shoulders” at the expense of three successive vertices
(Nisin).

See Figure 1 in the appendix

As seen from the figure,
point A is formed first maximum price. This is followed by a rollback to point B and
continue the trend at point C. After two successive vertices A and C, we
can observe a sharp back to their base point in D. We already all know that
the trend is weakening, and may soon be reversed.

The points A, B and C we
have seen a rising channel that has been broken point D. Then, we wait for the rollback to the point E.
Once formed the point E, we can hold the line of resistance
point B
and
D.
If the price breaks the neckline, built on point B and
D,
it will be our signal to sell and move down.

Also, we can already
two tips of C and E, and one valley – D, to hold the drop-down passage.

However, to more
sure to enter the market, we need to confirm the breakout of the neckline. To do this, we
forward to be broken neckline at point F, and will roll back to the neckline in
point G.
Otherwise, we can breed a false break of the neckline and continue
upward movement. This often happens.

Therefore, once again
We remind you that without your breaking and fixing prices below the line of the neck, in
enter the market is dangerous.

potential figures
“Head and shoulders” can be measured by the projection of the segment C –
D
(Dashed line in the figure) at the beginning of the neckline is broken with the end
the result at the point H
(See. Figure).

Important remarks to
building a “head and shoulders” are observations that the figure itself is not
always so beautiful and logical, as shown in the figure. Distance
between vertices may be different. Also, peaks may consist of several
waves, which sometimes confuses the trader. And, most importantly, the neckline can
be at a different angle of inclination.

Therefore, in order to successfully
finding “head and shoulders” must study its construction, in principle, not
measure all the distance between ruler.

inverted figure
“Head and shoulders”, as you may have guessed, this is the same figure, only when
the downward movement of the currency pair, and so it is called inverted.

The figure of “double
top “- a truncated version of the” head and shoulders “.

See Figure 2 in Appendix

There are times when
price does not make the right shoulder, then it turns out the figure “double top”. Line
neck with the figure “double top” is formed on a local minimum price.

Twin brother our
figure “double top” figure is a “double bottom”

See Figure 3 in the appendix

The figure of “double
base “is formed on a downward motion and shows a reversal trend
at a penetration local maximum.

The potential deal with
figures “double bottom” and “double bottom” is measured similarly as in the figure
“Head and shoulders”: we project the distance of the segment A – In the next segment
Turning on the neckline.

The figure “triple
top “is an extended version
figure “double top”. It is not always the market goes beautifully, sometimes
protracted flat, which is especially confusing trader.

See Figure 4 in the annex

As seen from the figure,
rather than to give the trader to make money, the currency price went third
just do the top. Therefore, the shape and named “triple top”. Analysis
action is the same as in previous figures technical analysis: monitoring
peaks and lowlands, search the neckline and at the entrance to the market penetration of the neck.

The figure of the “triple
base “is the brother – twin figure” triple top “.

See Figure 5 in Appendix

The figure of the “triple
base “forms a trend reversal in the downward movement of the exchange rate.

Next figure
“Triangle” – one of the most common technical analysis figures
continuation of the price movement.

In technical analysis,
There are four types of triangles: ascending, descending, and expanding
symmetric. By the way, a symmetrical triangle can be a reversal pattern,
and not just a continuation of the price movement.

See Figure 6 in Annex

As seen from the figure,
topmost descending triangle is also expanding
triangle. Expanding triangle shows the flat zone where it is better not
to enter the market.

detect
expanding triangle is not difficult: the penetration of the previous level are not
followed by fixing prices above / below this level, hence there
the likelihood of expansion of the flat.

Figure “Vympel” and
“Flag” is very similar to the “triangle.”

See Figure 7 in Appendix

The difference between the figures
“Triangle” and “pennant”, “Flag” is the time of their construction. Figure
“Triangle” formed by the time more than the “Vympel” and “Flag”.

The figure “Vympel”
determined by the two trend lines that converge in a predominantly
horizontal position.

Figure “Flag” is formed
due to two parallel support and resistance lines, and this reminds
flag.

The figure of “Wedge” very
similar to the figure of “Triangle” with the only difference that the wedge is different
sharp slope against the current trend.

See Figure 8 in Annex

Breakthrough “wedge” shape
It takes place on the opposite side of his inclination.

By graphic shapes
indeterminate direction of price movement include all of the above figures,
which did not take place. For example, we can see the beginning of the formation of figures
“Head and shoulders”, but then the conditions are not satisfied, and we think that this figure
“Double Top”, but these conditions are not met, because the price goes in
flat and then continues its upward movement.

Thus, we
reviewed in the article the basic figures of technical analysis to help you
to better understand the structure of the direction of price movement and feel the market
Forex inside.

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