Tag: Analysis

Chart Patterns: Ascending Triangles

Post author By Arthur Simmons
Post date 3 December, 2020
No Comments on Chart Patterns: Ascending Triangles

[caption id="attachment_57083" align="aligncenter" width="3338"] Ascending Triangle[/caption]

Ascending Triangle

[caption id="attachment_57083" align="aligncenter" width="3338"] Ascending Triangle[/caption]

Of all the bullish continuation patterns that exist, few are as sought after as the ascending triangle. Like all triangle patterns, their development and construction are dependent on two trendlines that intersect and form an apex. The two primary identifying conditions of an ascending triangle I a flat, horizontal top and an upward sloping trendline.

In addition to the two trendlines, there is a specific kind of behavior that the candlesticks must perform. The upper trendline and the lower trendline must be touched at least twice. Ideally, and according to Bulkowski, there should not be much open space inside the triangle. The same volume behavior that occurs in other triangles occurs here in the ascending triangle: price often breaks out in the final 2/3rds of the triangle, and volume decreases before the breakout. The psychology behind the formation of the ascending triangle is essential to understand. The pattern represents an apparent battle between longs and shorts. Short traders are under the impression that because the resistance level has been tested and has held, it will remain stronger. Long traders are under the impression that prices will move higher because of the formation of higher lows and an upward sloping trendline. Ultimately, shorts cover very quickly, just before or immediately after the breakout of the upper resistance.

Bulkowski recorded that, in equity markets, the breakout direction of an ascending triangle is upwards 64% of the time. Dahlquist and Kirkpatrick recorded that upwards breakouts occur 77% of the time. Interestingly, the performance of this pattern is roughly average across all patterns – this is contrary to the belief of many traders who self-report a high positive expectancy of upwards breakouts. Dahlquist and Kirkpatrick did warn that there are many false breakouts and that failure rates are between 11% and 13%.

As with any pattern, it is essential to pay attention to price action first and then find tools to help you filter whether an entry at the breakout is appropriate. Additionally, be wary of throwbacks as they are frequent over 50% of the time – many conservative traders wait for a retest of the breakout to confirm a valid break from the ascending triangle.

Sources:

Kirkpatrick, C. D., & Dahlquist, J. R. (2016). Technical analysis: the complete resource for financial market technicians. Upper Saddle River: Financial Times/Prentice Hall.

Bulkowski, T. N. (2013). Visual guide to chart patterns. New York, NY: Bloomberg Press.

Bulkowski, T. N. (2008). Encyclopedia of candlestick charts. Hoboken, NJ: J. Wiley & Sons.

Bulkowski, T. N. (2002). Trading classic chart patterns. New York: Wiley.

Tags Analysis, Chart, Chart patterns, charts, Education, Forex, patterns, triangle

Chart Patterns

Chart Patterns: Broadening Patterns

Post author By Arthur Simmons
Post date 28 January, 2020
No Comments on Chart Patterns: Broadening Patterns

Chart Patterns – Broadening Pattern & The Diamond Pattern

This pattern is also called a funnel or a megaphone pattern. It’s an inverse symmetrical triangle. This pattern is definitely not that common, and it’s a tricky pattern to trade. The behavior of price in a broadening pattern is to increase swing ranges where new higher highs and new lower lows are made. In my opinion, it is best to ignore this pattern. The breakout and retest of the upper or lower trendlines are the prevailing trade strategies utilized for this pattern. Of all the patterns, to trade, this is one of the least profitable. However, I’ve learned that the breakouts are often false, due to the nature of the final swing in the pattern being mostly overbought or oversold. It is not uncommon to see megaphone patterns turn into a triangle pattern – which results in a rare but profitable pattern known as a Diamond.

Chart Patterns – Diamond Pattern

The diamond pattern is rare. It is also difficult to even notice if it exists. In fact, Thomas Bulkowsi writes on his site, ‘Let me clear about this. I don’t like diamonds. They are as tough to spot as nightcrawlers in the grass on a summer night.’ I believe that is a pretty accurate description. But, while diamond patterns are challenging to spot, they are a very powerful pattern that often results in fast and violent moves in the opposite direction – higher for diamond bottoms and lower for diamond tops. It is ok for the patterns to have one side that seems more slanted than the other and, in fact, they often do not appear as symmetrical as the example above. We trade a diamond pattern the same way we would any other triangle pattern.

Sources:

Kirkpatrick, C. D., & Dahlquist, J. R. (2016). Technical analysis: the complete resource for financial market technicians. Upper Saddle River: Financial Times/Prentice Hall.

Bulkowski, T. N. (2013). Visual guide to chart patterns. New York, NY: Bloomberg Press.

Bulkowski, T. N. (2008). Encyclopedia of candlestick charts. Hoboken, NJ: J. Wiley & Sons.

Bulkowski, T. N. (2002). Trading classic chart patterns. New York: Wiley.

Tags Analysis, broadening, Chart, diamond, Education, Forex, Pattern, patterns, Technical

Chart Patterns

Chart Patterns: The Head And Shoulders Pattern

Post author By Arthur Simmons
Post date 16 January, 2020
No Comments on Chart Patterns: The Head And Shoulders Pattern

The Head And Shoulders Pattern

Regular and Inverse Head & Shoulder Pattern

The Head And Shoulders Pattern

Of all the patterns that exist in any market, the most well known is the Head And Shoulder Pattern. Kirkpatrick and Dahlquist’s book, Technical Analysis, detailed many studies on the performance of this pattern. The result of all the data is that the Head And Shoulder Pattern is the most profitable of all standard patterns. Interestingly, Dalquist and Kirkpatrick made no distinction between the performance of the head and shoulder pattern and the inverse head and shoulder pattern (sometimes called the bottom forming head and shoulder pattern). While this pattern is successful across many markets, it is also the pattern that causes the most losses to new traders. We’ll get into the specifics of why this pattern destroys a good number of traders. First, we need to understand what the pattern is.

Regular and Inverse Head & Shoulder Pattern

The image above shows two head and shoulder patterns, the regular pattern and the inverse pattern. It just so happened that the daily chart of the AUDUSD conveniently had both of the patterns right next to each other – not a common occurrence. Now, you can and will read a lot of rules and theories behind the head and shoulder pattern. I could go into the behavior of this pattern, the psychology behind the three triangles that make up the broader pattern, the symmetrical nature of the left and right shoulders, etc., etc., etc., but we don’t need to complicate a pattern that can be very easily understood.

There’s a great book by Larry Pesavento titled Trade What You See. While the book Trade What You See is focused primarily on Harmonic Patterns, the title always stuck with me. If you were to stand in front of a mirror, you would more than likely notice the symmetrical nature of your left and right shoulders (unless you’ve had some significant injury or disease. There’s a good number of people who believe that both the right and left shoulders need to be as exact as possible – but this isn’t necessary.

Here’s a simple rule to follow:

If it doesn’t look like a human head and shoulder, then it probably isn’t a head and shoulder pattern.

Are you familiar with the poker game Texas Hold’em or any other form of poker? There are several maxims that poker players follow, one of them is ‘Don’t chase the straight or the flush.’ Why? Because when you get dealt a hand that is missing just one card for your straight or one more suite to complete your flush, the odds are overwhelmingly against you getting that final card to complete the straight/flush. Head and shoulder patterns are the same way. The head and shoulder pattern is only complete when the neckline has been broken. Let me repeat that three times for you:

A head and shoulders pattern is not complete until the neckline is broken.

A head and shoulders pattern is not complete until the neckline is broken.

A head and shoulders pattern is not complete until the neckline is broken.

Many a trading account has been the victim of trying to anticipate the completion of a head and shoulder pattern, only to have it be broken. In addition to being the most profitable basic pattern, the head and shoulder pattern is also one of the most rejected patterns. We don’t chase straights or flushes in poker, and we don’t chase patterns in trading. In addition to the information above, here are some other factors that can help you interpret the head and shoulder pattern:

If the volume in the left shoulder is greater than the right shoulder, there is an increased likelihood of the head and shoulder pattern completing.
If the volume in the right shoulder is greater than the left shoulder, failure rates are higher.
Horizontal necklines increase the probability of a head and shoulder pattern completing.
The more dramatic the slop of the neckline, the more likely the pattern will fail to develop.
Aggressive entries can be taken immediately when the price breaks the neckline.
Conservative entries can be taken after the neckline has been re-tested post-breakout.
If price breaks the neckline, retracements occur almost 70% of the time.

Sources:

Kirkpatrick, C. D., & Dahlquist, J. R. (2016). Technical analysis: the complete resource for financial market technicians. Upper Saddle River: Financial Times/Prentice Hall.

Bulkowski, T. N. (2013). Visual guide to chart patterns. New York, NY: Bloomberg Press.

Bulkowski, T. N. (2008). Encyclopedia of candlestick charts. Hoboken, NJ: J. Wiley & Sons.

Bulkowski, T. N. (2002). Trading classic chart patterns. New York: Wiley.

Tags Analysis, and, Chart, Charting, Education, Forex, hands, head, headandshoulders, patterns, shoulders, Technical, Technical Analysis, trading

Chart Patterns

Chart Patterns: Symmetrical Triangles

Post author By Arthur Simmons
Post date 15 January, 2020
No Comments on Chart Patterns: Symmetrical Triangles

Symmetrical Triangles

Symmetrical Triangle

Symmetrical Triangles

Out of all the triangle patterns, symmetrical triangles are perhaps the most common and the most common and the most subjective. Symmetrical triangles have a standard neutral bias; however, symmetrical triangles most often form after a prior trend, because they most commonly form after a prior move. The preference of their trading direction is determined by the direction from the previous move. If the preceding move was bullish, then the symmetrical triangle is viewed as a bullish continuation pattern. Like all triangle patterns that form after a trending move, they are known as pennants.

The construction of a symmetrical triangle is like any other triangle: it requires to trendlines that intersect: one upward sloping angle and one downwards sloping angle. Price action should touch both the upper and lower trendlines at least twice – but ideally three times. A lack of open space within the triangle is ideal. Breakouts often occur in the final 1/3^rd of the triangle. Volume typically falls before the breakout.

I believe that understanding the psychology of how this pattern forms is essential. The symmetrical triangle is the result of a condition that is very common in any traded market: consolidation. It’s not just common; it’s normal. Consolidation is representative of two things: equilibrium on the part of buyers and sellers and indecision by active speculators. The psychology of price action inside a symmetrical triangle is different than what occurs in an ascending or descending triangle, which both have a marked bias during the construction. Symmetrical triangles are the epitome of indecision, and traders can very quickly fall victim to whipsaws.

Symmetrical triangles, while the most common, are also the most confusing. Take the image below:

The symmetrical triangle on the daily chart for the AUDJPY is a bearish pennant – a bearish continuation pattern. While any triangle that forms after an established trending move has a high probability of pushing the price in the direction of the trend, it doesn’t always happen that way. As I wrote above, symmetrical patterns are inherently neutral – so it is important to watch them. We can see that this symmetrical triangle did not cause a continuation move south – it reversed. Regardless of the direction of the breakout, some rules should be applied when entering a trade based on a breakout of a symmetrical triangle.

Symmetrical Triangle - Long Entry — Symmetrical Triangle – Long Entry

First, unlike the ascending and descending triangles, we don’t enter on the break. We want to enter when price breaks the prior high (or low). For the chart above, we would enter long above the previous swing high that touched the downtrend line.

Symmetrical Triangle - Short Entry — Symmetrical Triangle – Short Entry

The short entry from a breakout below a symmetrical triangle is the inverse of the bullish entry. On the chart above, the short entry is when price moves below the prior swing low that tagged the uptrend line – not on the initial breakout.

Pullbacks and throwbacks occur 59% of the time. Symmetrical triangles are notorious for many false breakouts, so look for frequent wicks/shadows to pierce the trendlines. Dahlquist and Kirkpatrick wrote that volume that increases on the breakout increases the performance of the pattern, but it is otherwise below average in its performance.

Sources:

Kirkpatrick, C. D., & Dahlquist, J. R. (2016). Technical analysis: the complete resource for financial market technicians. Upper Saddle River: Financial Times/Prentice Hall.

Bulkowski, T. N. (2013). Visual guide to chart patterns. New York, NY: Bloomberg Press.

Bulkowski, T. N. (2008). Encyclopedia of candlestick charts. Hoboken, NJ: J. Wiley & Sons.

Bulkowski, T. N. (2002). Trading classic chart patterns. New York: Wiley.

Tags Analysis, Breakout, buy, Forex, long, Pattern, patterns, sell, Short, smmymetrical, Technical, triangle

Chart Patterns

Chart Patterns: Pullback and Throwbacks

Post author By Arthur Simmons
Post date 14 January, 2020
No Comments on Chart Patterns: Pullback and Throwbacks

The most common term people associate with retracements in price that retest prior areas of support or resistance is a pullback. There is another term that goes with pullback, and that is a throwback. Let’s review the differences between these two definitions. Pullback Pullbacks occur after the price has moved lower. Think of any pattern […]

Throwback

Pullback

Pullbacks occur after the price has moved lower. Think of any pattern or support line that has price breaking out to the downside. When price pulls back up to the price level of the initial break, that is known as a pullback. Pullbacks occur during breakouts lower.

Throwback

Throwbacks occur after the price has moved higher. Think of any pattern or level of resistance that has price breaking out to the upside. When the price is thrown back down to the first level of the break, that is known as a throwback. Throwbacks occur during breakouts higher.

While there are different definitions for retests of breakout zones, know that people will often call throwbacks, pullbacks. In practice, the description itself does not matter as much as you see the behavior that price exhibits after breaking out of support or resistance. The table below identifies the average occurrence rate for a pullback or throwback from the following patterns.

Pattern	Pullback Rate (%)	Throwback Rate (%)
Ascending Triangle	56	60
Descending Triangle	55	50
Double bottom	—-	56
Inverse Head-And-Shoulder	—-	57
Head-And-Shoulder	59	—-
Symmetrical Triangle	58	58
Triple Bottom	—-	58
Triple Top	63	—

The table above comes from Thomas Bulkowski’s book, ‘Visual Guide to Chart Patterns.’ His book is part of the Bloomberg Financial Series. Bulkowski is, by far, the authority on the frequency of patterns experiencing pullback and throwbacks. His work focuses extensively on chart patterns. However, there is one problem, and it has nothing to do with his phenomenal work. This is a problem for anyone who focuses primarily on the Forex markets. Why? Because Bulkowski’s work and the broader technical analysis writer/education community focuses primarily on equity markets. This is a big deal because equity markets spend the vast majority of their time in one direction: up. This is especially true over the past decade. Again, this is not a dig towards the truly phenomenal authors and analysts who spend years creating their written work – it’s just a reality of the world we are in. It’s important to understand that the Forex markets, as we know them, are still a relatively new market – especially when compared to the stock market.

If you read Bulkowski’s work or any other work studying the frequency of throwbacks and pullbacks from patterns and support/resistance – I would recommend attributing the same rate of throwbacks to pullbacks in the forex market.

Sources:

Bulkowski, T. N. (2013). Visual guide to chart patterns. New York, NY: Bloomberg Press.

Bulkowski, T. N. (2008). Encyclopedia of candlestick charts. Hoboken, NJ: J. Wiley & Sons.

Bulkowski, T. N. (2002). Trading classic chart patterns. New York: Wiley.

Tags Analysis, chartpatterns, Education, Forex, patterns, pullback, Technical, Technical Analysis, throwback, trading

Forex Course

45. Analyzing the Forex Market – Technical Analysis

Post author By Reddy Shyam Shankar
Post date 13 January, 2020
No Comments on 45. Analyzing the Forex Market – Technical Analysis

A way to analyze the markets other than fundamental analysis is technical analysis. In this lesson, we shall exactly understand what technical analysis is, and also the different techniques to analyze the market using technical analysis.

What Is Technical Analysis?

In simple terms, technical analysis can be defined as the study of price movements.

Unlike fundamental analysis, where people study the factors which affect the supply and demand of the market, technical analysis involves the study of the historical price movements and the present market condition.

Why should Technical Analysis be used?

Let us answer this question by bringing up an analogy.

The first thing one must understand about the market is that the forex market business is no different from a real-life business.

For instance, let’s say there’s a car dealer and they have been selling one particular car for six months by varying the prices every month. And an illustration of the sales report is given below.

Now, from the above table, can you predict what could be priced in the near future? If yes, then you can consider yourself as a technical analyst, as this is what technical analysts do.

Consider the above table. We can see that initially, the car was priced at $20,000, and 9,000 units of the car were sold. Next month, the owner price reduced by $1,000, and the sales increased by 1,000 units. Seeing this demand in the car, the owner increases the price to $25,000. But, this time the sales drop down to 1,000 units. So, the car owner reduces the price back to $19,000. And he observes that the sales increase from 1,000 to 10,000. Later, he again raises the price to $26,000.

Now, by analyzing the past price movements, we can predict with a high probability that the price will reduce yet again, as the previous time the price came to $25,000, the price dropped drastically. Thus, looking at the price of the car in June, we can see that the price did fall to $15,000.

Therefore, the above example, in a nutshell, is referred to as Technical Analysis.

Switching back to the Forex market, the analysis is done similarly. The only difference being the Forex market involves the trading of currency pairs, and the real market consists of the buying and selling of products.

Hence, from this, we can conclude that a market moves as per the historical price movements. The above example is just to give you a gist of how technical analysis work. There are many more complex ways to accurately predict the market using technical analysis. Price Action traders do their technical analysis using different types of charts (like candlesticks, bars, lines, area, etc.), timeframes, and indicators.

Hence, this brings us to the end of this lesson. In the lessons coming forward, we shall be discussing tons of stuff related to technical analysis. So, stay tuned.

[wp_quiz id=”56618″]

Tags Analysis, Candlestick, Education, Forex, Forex Course, Indicators, Line Chart, Market analysis, patterns, Technical Analysis, timeframes, trading

Forex Fibonacci

Fibonacci Confluence Zones

Post author By Arthur Simmons
Post date 13 January, 2020
5 Comments on Fibonacci Confluence Zones

Fibonacci Confluence Zones

Fibonacci Retracements drawn inside boxes

Fibonacci Confluence Zones

If you have not first read my article, ‘You’re still misusing Fibonacci retracements,’ please do so before reading this article. This article will continue where we left off in discussing the new and improved way of drawing accurate and efficient Fibonacci retracements using the Brown Method. I am going to use the same Forex pair that we used in the first article. The purpose of this article is to show you how you can create Fibonacci Confluence Zones to create natural price levels that act as future support and resistance. First, I am going to start my first swing using the March 2001 low and then retracing back to the confirmation swing high in March 1997. See below.

Fibonacci Retracement from low to confirmation lower swing high.

First, I want to know if this retracement is appropriate given how much time has passed – we’re 23 years from the March 1997 high and 19 years from the March 2001 low. Do these Fibonacci retracement levels still work? Do they remain valid? The black vertical line is the start of the retracement, so anything before the retracement is not used, it’s the data afterward that matters. Let’s look.

Fibonacci Retracement - testing of 20 year old retracement range. — Fibonacci Retracement – testing of 20 year old retracement range.

Are these Fibonacci retracement levels we drew still relevant? I would say so. A quick look at A, B, C, and D prove it. Especially for the most recent data at D on the AUDUSD weekly chart – seven-year lows bounce off of the 61.8% Fibonacci retracement level from 20+ years ago! But let’s look at some more Fibonacci retracements made off of other significant swings. Fair warning: there’s going to be several images here.

The Fibonacci retracement above is from the swing high in July 2018 to the confirmation swing low in October 2001. Like the previous Fibonacci image, we can see that prices have respected the retracement levels even a decade after the retracements were established. But we’re not done.

The above image is the first retracement we looked in this article (the same swing low in March 2001) using the same swing low; we draw more retracements to the next confirmation swing lower highs. I’ve drawn two additional Fibonacci retracements in Red and Orange. Notice how some of the Fibonacci retracements occur within proximity of one another. Letter A is shared retracement zones of the 50% and 61.8% of two different retracements. B has a confluence zone of three Fibonacci retracement levels, 50%, 61.8%, and 38.2%. And C has two overlapping retracements of 50% and 38.2%. Now let’s get to the fun part.

The previous image showed three Fibonacci retracement confluence zones at A, B, and C. Those confluence zones were just three of many that will appear on any chart on any time frame. What happens if we draw a series of retracements using major swings as the start point of the Fibonacci retracements and then retrace to the next confirmation swing highs and lows? We’ll get a chart that looks like the one below.

I’ve added some other letters to identify more confluence zones. I admit the chart does look like a mess. And it should. Not every Fibonacci retracement to a new confirmation swing high or low will coincide with shared Fibonacci levels, but they frequently do. Once we’ve drawn out a series of retracements, we should see a set of these confluence zones. Now begins the cleanup phase. We’re going to place horizontal lines where there are confluence zones of Fibonacci retracement levels.

Horizontal Lines replace confluence zones.

The letters A, B, C, D, and E show where the Fibonacci confluence zones have formed, and are represented by horizontal lines (black) on the chart. Now, you can either delete or hide all of the Fibonacci retracements so that we are left with only the horizontal lines at A, B, C, D, and E.

I know that the horizontal line at D represented the most confluence zones on the AUDUSD weekly chart, but it also represented some of the longest-lasting and respected Fibonacci retracement levels. Starting at the horizontal level at D, I draw a box from D down to the major low on the AUDUSD chart. Now, the width of this box doesn’t matter – just the range.

After I’ve established that box from D down to the major low, I can remove the horizontal lines. Then I start to copy the box all the way to the top of the range. All I’m doing here is copying and pasting the box so they ‘stack.’

Now comes the cool part. I’m going to treat each box like its own range and place Fibonacci retracements inside each box, moving from bottom to top.

Fibonacci Retracements drawn inside boxes

No matter how many times I’ve done this, it still blows my mind. But there is probably a lingering question. You’re probably looking at the chart and saying, ok, cool, but there are some massive gaps between these Fibonacci levels. You are correct if you are thinking about this. Now, Connie Brown never wrote about this next part; it’s something I discovered and developed on my own. The approach comes from the idea that markets are fractalized and proportional, so we should be able to break down like zones into smaller ranges. This is especially important and useful for traders who prefer to trade on faster time frames like four-hour or one-hour charts. Using price action that is more recent and relevant, I can draw a Fibonacci retracement from the 50% level at 0.71688 to the start/end of the box at 0.6368.

Letters a and b on the chart above identify the 50% Fibonacci level and start/end level described in the prior paragraph. The black horizontal lines represent the Fibonacci retracement drawn from a to b. I’ve also switched the chart from a weekly chart to a daily chart. When we see that daily chart, we get a real idea of how powerful the Brown Method of Fibonacci analysis is and how precise the study of these confluence zones can be.

In summary, to utilize the Brown Method, the followings steps are as follows:

Create Fibonacci retracements by using a major swing high/low and drawing to the confirmation swing with a strong bar – not the next extreme high/low.
After identifying Fibonacci confluence zones, place horizontal lines on the major price levels where multiple Fibonacci levels share the same price range.
Delete or hide the Fibonacci levels so that only the horizontal lines are present – make sure you identify which horizontal line had the most powerful collection of Fibonacci levels.
After identifying which horizontal line was the most potent and relevant, determine if it is closer to the all-time high or all-time low. Draw a box or a price range from that horizontal line to the all-time high or low – whichever is closest.
Repeat the boxes by copying the same box and ‘stack’ it to the all-time high/low – the opposite of whichever was used to establish the box/price range.
Draw Fibonacci retracements in the boxes.

Sources:

Brown, C. (2010). Fibonacci Analysis: Fibonacci Analysis. Hoboken: Wiley.

Brown, C. (2019). The Thirty-Second Jewell: Thirty Years Behind Market Charts From Price To W.D. Gann Time Cycles. Tyton, NC: Aerodynamic Investments Inc.

Tags Analysis, Confluence, Education, expert, Fibonacci, Forex, new, Technical, Technical Analysis, trading, zones

Forex Daily Topic Point and Figure

Point & Figure: Profit Target and Stop-loss Settings Made Simple

Post author By Arthur Simmons
Post date 22 December, 2019
No Comments on Point & Figure: Profit Target and Stop-loss Settings Made Simple

Something new traders struggle with is trying to find appropriate profit targets and stop targets. Point & Figure charts make a process that is a struggle into something that is very, very easy. Two methods can be used to identify profit targets on a Point & Figure chart: Vertical Method and Horizontal Method. I am only going to show you the Vertical Method because the entire series I’ve done here has strictly been on the use of 3-box reversal Point & Figure charts.

The Horizontal Method can be found in Jeremy Du Plessis’s work. The Horizontal Method is more applicable to the most traditional form of Point & Figure – the 1-box reversal chart. There’s a formula for calculating the profit target on Point & Figure. Don’t get freaked about the word formula – the process is very simple.

Buy/Long Profit Target = (number of Xs in prior column * box size) * (reversal amount) + lowest O of the current O column.

Short Profit Target = (Number of Os in prior column * box size) * (reversal amount) – highest X of the current X column.

Stops

Regarding stops, I always stick with the reversal amount – so my risk is always, no matter the trade, 3-boxes worth. On my standard 20-pip box size Point & Figure charts, 60 pips are my max loss on any trade. Some authors suggest putting the stop one box below (or above) the reversal amount, but I’ve always stuck with the reversal amount being my stop.

The Blind Entry Trading System

I want to tell you something that might be a little mind-boggling. I’ve been teaching Point & Figure to another class this year, and we’ve focused on live testing the ‘blind entry’ trading strategy in Point & Figure – which is nothing more than taking every single multiple-top or multiple-bottom break without any other filter. We focused on the following pairs:

GBPUSD, AUDUSD, USDCAD, USDJPY, GBPJPY, EURGBP, EURUSD, and AUDJPY.

We did not use any profit targets. We exited trades only when the reversal column appeared. So our losses were always limited to just 60 pips on a 20-pip/3-box reversal Point & Figure chart. We traded from March 1^st, 2019 through December 7^th, 2019. The results below detail the net pips at the end of our trading period:

GBPUSD = +1,060 pips

AUDUSD = -60 pips

USDCAD = +200 pips

UDSJPY = +1060 pips

GBPJPY = + 2,620 pips

EURGBP = +480 pips

EURUSD = -280 pips

AUDJPY = +1,200 pips

Net Total pips = +6,280 (the average for the class was +5443 pips).

To put that into perspective, with a 0.1 (10,000 unit) Lot size, that’s a net $6,280.00. A full Lot would have equaled a net $62,800. I had one woman who traded an odd 3.33 Lots as her standard position size (I guess it is not that odd if you think about it). She led the pack with her real net pip count at +6,880 – with a 3.33 lot size that meant she made a net $229,104. I was and remain very envious of her performance – she should probably be teaching!

Sources:

Dorsey, T. J. (2013). Point and figure charting: the essential application for forecasting and tracking market prices (4th ed.). Hoboken, NJ: John Wiley & Sons.

Kirkpatrick II, C. D., & Dahlquist, J.R. (2016). Technical Analysis: The Complete Resource for Financial Market Technicians (Third). Old Tappan, NJ: Pearson.

Plessis, J.J. (2012). Definitive Guide to Point and Figure – a comprehensive guide to the theory (2^nd ed.). Great Britain: Harriman House Publishing.

DeVilliers, V., & Taylor, O. (2008). Point and figure charting. London: Financial Times/Prentice Hall.

Tags Analysis, Education, figure, Forex, fx, P&F, point, signals, Technical, Technical Analysis, trading

Forex Daily Topic Point and Figure

Point & Figure Charts: Introduction

Post author By Arthur Simmons
Post date 17 December, 2019
No Comments on Point & Figure Charts: Introduction

Point & Figure Charts

Months on Boxes

Point & Figure Charts

If the only chart style you have ever been familiar with is Japanese candlesticks or American bar charts, then no doubt Point & Figure charts will look very foreign. They have the appearance of random and new while also being very organized and very old looking. Point and Figure charts are the earliest known forms of technical charting that we know of, and many civilizations have generated some Point and Figure charts out necessity. Another concept that may be difficult to grasp if you are new to price action only chart styles is that Point and Figure charts are an intraday charting style, but is void of any time component. Live data is necessary when using Point and Figure charts. The fact that Point and Figure is an intraday chart style will confound most people who are familiar with charts that utilize the component of time, like Japanese candlesticks. Most of you who are learning about Point and Figure charts will assume that Point and Figure is a long term chart form. It is tough to create the mindset that time is not a factor in Point and Figure. But let’s get to the chart.

Point & Figure Chart Basics – Box Size and Reversal Amount

Point & Figure charts are represented by a Box Size and a Reversal Amount. Boxes are represented as Xs and Os. The trader or analyst determines the Box Size. Depending on the market you are trading and the Reversal Amount, the Box Size will vary from one market and instrument to the next. I will provide a table with the box sizes I use in my trading at the end of this article. On a Point & Figure chart, Xs and Os represent price direction. Xs, often colored green, represent price moving up. Os, usually colored red, represent price moving down.

The trader or analyst also defines the Reversal Amount. Historically, Point & Figure charts were 1-box Reversal charts. Today, 3-box reversal charts are the most common. There is no limit on the number of boxes required for a reversal. I only use 3-box reversal charts – they perform exceptionally well in Forex markets. The Reversal Amount dictates how many boxes price needs to move to print a new column of Xs or Os. Let’s look at the Box Size and Reversal Amount on the chart below.

Box Size & Reversal Amount

Pair	Box Size (in pips)	Pair	Box Size (in pips)
AUDCAD	20	GBPAUD	40
AUDCHF	20	GBPCAD	40
AUDJPY	20	GBPCHF	20
AUDUSD	10	GBPJPY	20
CADJPY	20	GBPNZD	40
CHFJPY	20	GBPUSD	20
EURAUD	40	NZDCAD	20
EURCAD	20	NZDJPY	20
EURCHF	20	NZDUSD	20
EURGBP	20	USDCAD	20
EURJPY	20	USDJPY	20
EURNZD	40	USDCHF	20
EURUSD	20

How much time does it take for a column to change from X to O?

Your transition to a price action only chart from a Japanese candlestick chart is going to continually be hampered by continuing to think that ‘time’ has someplace on a Point & Figure chart. You will look at a chart and say to yourself, ‘Well, that column of Xs has been there for a while, it can’t move anymore, it will probably reverse.’ While the concept of time is not used, some pieces of software will allow you to imprint the month on the chart where the month’s number will appear at the price level it was trading at when the month started. This can give those who are transitioning to Point & Figure as a new chart style some ‘grasp’ of time. See below.

Some traders may find having the month displayed as a benefit. Is it useful? I think so. It does at least give a sort of perspective of time and how long something has remained in a single column or how many reversals have been printed on the screen. Additionally, cycle analysis teaches that we often see some of the highest probabilities of trend changes or corrective moves occurring at the start of a new month. If we observe a new month starting near an extreme high or low, we could be looking at an imminent reversal with at least a high probability short term trade option.

Trend Lines and Patterns

Another concept that people new to a price action only chart style might find difficult to understand is that P&F charts are always in a bear or bull market. And depending on the time frames you trade on a Japanese candlestick chart, Point & Figure charts may change bull and bear trends frequently or infrequently. Two types of trendlines can be drawn on a Point & Figure chart:

Objective (requires only one point to draw).
Subjective (requires two or more to draw).

Objective Trend Lines or Dominant Angles are also called 45-degree angles. Dominant angles only require one point to be drawn, and they are always drawn from O to X or X to O (in 3-box reversal charts) – and always to the column right next to eachother. The software I am using for these articles is called Optuma by Market Analyst. In Optuma’s software, they auto-draw some of the dominant trend lines. Subjective trendlines are drawn the same way you would draw any other trendline on a Japanese candlestick chart. I rarely, if ever, utilize subjective trendlines. In some of the strategies I will go over, the dominant/45-degree trendlines are useful in determining the direction of the trading you should take.

Patterns such as flags and pennants will show up on Point & Figure charts just like you would see on Japanese candlestick charts. The same principles that we would apply in trading continuation patterns like flags and pennants are the same on a Point & Figure chart. There are some stark differences between the breakouts of a pattern on a candlestick chart versus a Point & Figure chart. There is a primary difference between how we treat breakouts of patterns and trendlines on a Point & Figure chart versus a candlestick chart.

Most Important Rule To Follow

There is one primary rule that must be followed when trading on Point & Figure charts.

Only Enter Trades After Multipletops/Multiplebottoms have been broken.

I’ve said that Point & Figure charts are unambiguous. The entry rules in Point & Figure reinforces that statement. When a multiple top appears, the entry is always on the next X above the multiple top. When multiple bottoms appear, the entry is always on the next O below the multiple bottom. See the charts below:

A question often arises when an X or O breaks a trendline: do you enter a trade when the trendline is broken? It depends. The entry rules of multiple tops and multiple bottoms still apply. Even if the price breaks a trendline, a multiple top or bottom needs to be broken to take an entry. Further discussion into entry rules and entry strategies will be discussed in further articles.

Sources:

Dorsey, T. J. (2013). Point and figure charting: the essential application for forecasting and tracking market prices (4th ed.). Hoboken, NJ: John Wiley & Sons.

Kirkpatrick II, C. D., & Dahlquist, J.R. (2016). Technical Analysis: The Complete Resource for Financial Market Technicians (Third). Old Tappan, NJ: Pearson.

Plessis, J.J. (2012). Definitive Guide to Point and Figure – a comprehensive guide to the theory (2^nd ed.). Great Britain: Harriman House Publishing.

DeVilliers, V., & Taylor, O. (2008). Point and figure charting. London: Financial Times/Prentice Hall.

Tags Analysis, Education, figure, Forex, P&F, point, technial

Forex Elliott Wave

Forecasting with the Elliott Wave Principle

Post author By Eduardo Vargas
Post date 9 December, 2019
No Comments on Forecasting with the Elliott Wave Principle

The analysis and forecast process of any financial asset can support the decision process to take any positioning on the market. However, the time dedicated to developing it could increase the cost of the trade as this grows on time. In this educational article, we will review how to analyze and make a forecast by applying the main concepts of the Elliott Wave Principle.

The Elliott Wave Principle in a Nutshell

R.N. Elliott, in his work The Wave Principle, identified a nature’s law that governs everything, from nature to human socio-economic activities. Elliott comments that the financial markets are the most important socio-economic activity, so, when someone understands that law, he can get forecasts about the phenomena under study, the financial markets, in this case.

In this context, Elliott described that price moves in two types of movements impulses and corrections, and at the same time, the price tends to repeat some specific structures and sequences.

On the one hand, impulsive movements create trends and follow a sequence of five waves. On impulses, three waves move in the direction of the primary trend and two in the opposite direction.

On the other hand, a corrective movement consists of three waves; two of them will be in the opposite move to the main trend.

This eight-waves movement creates a cycle, and when it is complete, a new cycle of the same degree will start. In other words, when a five-waves and three-waves movement is complete, a new cycle of the same extension will take place.

Elliott gave intensive importance to corrections and told us the position of the market and the outlook. Elliott’s experience drove him to identify four main types of corrections as zigzag, flat, irregular, and triangles.

Making Simplifications

In the two latest articles, we discussed how we could simplify corrective patterns in the wave analysis using some chartist patterns as flags and triangles. Also, we commented on how it can help us in our study, reducing the time elapsed to develop a forecast and, finally, a trading plan.

The Analysis Process

The basic methodology to carry on the market analysis is to analyze from a higher to lesser time frame. In other words, we can start the study from a monthly range and finish in the hourly chart. Once we have identified the market structure, we begin to define scenarios that have a probability of occurrence. The scenarios are relevant to the analysis process because, using them, we can evaluate all possible price paths and decide which one of them is the most probable.

The Heating Oil Triangle

The following chart corresponds to Heating Oil in its weekly timeframe. In the figure, we observe the bullish sequence developed in three waves, which began on January 17, 2016, at $0.8552 per gallon. The energy commodity reached its highest level on October 03, 2018, at $2.4496 per gallon.

Once Heating Oil reached its high at $2.4496, the price started to make a bearish move, that found support at $1.6436 per gallon on January 02, 2019.

After that descent, the asset found buyers at $1.6436, Heating Oil’s traders started doing market swings. We can observe this as a triangle structure, as shown in the next daily chart.

According to the Elliott Wave Theory, we know that a triangle structure has five internal segments which follow a 3-3-3-3-3 sequence. However, there is the possibility that the triangle pattern does not build a fifth inner leg.

Now, let us identify some scenarios for the next path on Heating Oil.

Scenario 1:The price moves down and crosses the base-line of the triangle (dark orange arrow), with a first potential profit target at $1.6719, and a second target at $1.4339 per gallon.
Scenario 2 (blue arrow) considers that Heating Oil drops and, then, bounces off from the base-line, but does not surpass the previous high at $2.0994. From there, the price action begins a new bearish wave that would drive the energy commodity to $1.6719 per gallon.
Scenario 3 (black arrow), considers that the price overcomes the resistance determined by the upper-line of the triangle and the invalidation level at $2.1374.

Conclusion

As we discussed in this article, the time dedicated to analyze and forecast a financial market is a valuable resource that could increase or reduce the hidden cost of the potential trade. As occurs in mathematical models, valid simplifications can help the analyst to reduce the time to a decision process.

Flags and triangles are simple and basic formations that can ease the market study.

Finally, the formulation of different scenarios provides a wide range of options about the next potential paths of the price action. Also, these scenarios create different answers facing the question of what if the market does that?

Tags Analysis, Elliott Wave, Forex, Heating Oil, Market Forecast, Technical Analysis, trading

Forex Harmonic Forex Trading Guides

Harmonic Patterns – Start Here

Post author By Arthur Simmons
Post date 19 November, 2019
No Comments on Harmonic Patterns – Start Here

Harmonic Patterns – Start Here

Harmonic Patterns are an advanced form of analysis and require more than a basic understanding of the technical analysis of financial markets. For those of

Bearish Butterfly Pattern against 180-degree Square of 9 angle.

Harmonic Patterns – Start Here

Harmonic Patterns are an advanced form of analysis and require more than a basic understanding of the technical analysis of financial markets. For those of

Harmonic Patterns – Start Here

Harmonic Patterns are an advanced form of analysis and require more than a basic understanding of the technical analysis of financial markets. For those of you who have familiarized yourself with the application of Fibonacci levels, Harmonic Pattern Analysis will, perhaps, be of use to you. The following is a list of the Harmonic Patterns available for learning here at Forex Academy. The suggested order of learning about these patterns is below.

Phase One – Basic Harmonic Patterns

AB = CD

The Gartley Pattern

Phase Two – Advanced Patterns

The Butterfly Pattern

The Bat Pattern

The Alternate Bat Pattern

The Crab Pattern

The Deep Crab Pattern

The Shark Pattern

The Cypher Pattern

The 5-0 Harmonic Pattern

Phase Three – Application

Harmonic Pattern Walkthrough

The article above provides an example of how to use Harmonic Patterns in your own analysis and trading.

Sources: Carney, S. M. (2010). Harmonic trading. Upper Saddle River, NJ: Financial Times/Prentice Hall Gartley, H. M. (2008). Profits in the stock market. Pomeroy, WA: Lambert-Gann Pesavento, L., & Jouflas, L. (2008). Trade what you see: how to profit from pattern recognition. Hoboken: Wiley

Tags Analysis, Education, Forex, guide, harmonic, Learning, patterns, Technical Analysis, trading

Forex Elliott Wave

How to Analyze a Fast Market Using the Elliott Wave Principle – Part 2

Post author By Eduardo Vargas
Post date 19 November, 2019
No Comments on How to Analyze a Fast Market Using the Elliott Wave Principle – Part 2

In our previous article, we introduced the concept of “fast market.” Also, we commented about the importance of watching the big-picture to support the market’s general overview. In this educational

Disclosing the Speed

Once the market moved following our forecast, the price action developed its next sequence in a fast way. To aid in building our analysis in the EURGBP cross, we’ll use the RSI indicator to identify each swing.

From the EURGBP hourly chart, we observe the bullish sequence started on May 05. The RSI use, allows us to identify each swing of waves 2 and 4, and divergences the end of waves 3 and 5.

Until now, the movement developed by EURGBP corresponds to a 5-3 sequence; thus, the next path should develop in five waves. In consequence, our new hypothesis could be the next move a wave three or be the second leg of a zigzag pattern.

The second EURGBP chart exposes the progress in an ending diagonal pattern. This Elliott wave formation is a motive wave built by five internal legs that overlap each other.

On the other hand, the new big-picture structure observed on the EURGBP cross unveils a 5-3-5 sequence. Thus, according to the Elliott wave principle, this formation corresponds to a zigzag pattern.

Another observation comes from the alternation between the first and second bullish leg. Both segments moved on a different relationship price and time. In other words, while the first leg ascends in a fast step, the second one progress at a slower price/time relation.

Now, from the Elliott wave principle, the next path from the EURGBP should be a corrective move in three waves. If the price breaks below the invalidation level, the correction should be more profound.

On the following chart, we observe an incomplete corrective move developed in two internal waves labeled in black. In consequence, the next movement should be a wave ((c)) in black. The completion should complete a new wave A labeled in green.

Until this moment, the price action bounced above the invalidation level, which makes us observe two things:

The EURGBP cross is running in a complex corrective structure, likely a double three pattern. This Elliott wave structure is labeled as WXY, follows a 3-3-3 sequence, and develops seven swings.
Probably according to the alternation principle, the next corrective structure could be a flat pattern.

The following chart exposes the waves A and B labeled in green completion. As can be noted, wave A holds three internal legs, wave B retraces between 81% and 100% of A. Thus, the Elliott wave structure should correspond to a regular flat pattern.

Finally, the next EURGBP chart illustrates the end of the last segment of the wave C from the regular flat pattern, which is part of a complex corrective sequence, in this case, the formation corresponds to a double three structure.

As a learned lesson, the use of the RSI indicator is useful to support the wave identification process. Similarly, to apply the Elliott Wave Principle is essential to know the basic corrective patterns to follow any market. Finally, remember that the market has only two ways to move: it moves in three or five waves.

Tags Analysis, Elliott Wave, Fast Markets, Forex, Technical Analysis, trading

Forex Elliott Wave

How to Analyze a Fast Market Using the Elliott Wave Principle – Part 1

Post author By Eduardo Vargas
Post date 17 November, 2019
No Comments on How to Analyze a Fast Market Using the Elliott Wave Principle – Part 1

The speed is a characteristic of nature; in the same way, some markets tend to be faster than others. The problem arises when a market moves sharply. In this educational

The speed is a characteristic of nature; in the same way, some markets tend to be faster than others. The problem arises when a market moves sharply. In this educational article, we’ll introduce how to analyze a fast market using the Elliott Wave Principle.

Price and Speed

Both price and speed are individual characteristics of each market. Depending on specific factors, one market could be faster than another.

The problem arises when, in an active market, the price moves faster than usual. R.N. Elliott, in his Treatise “The Wave Principle,” wrote:

“In fast markets, it is essential to observe the daily as well as the weekly ranges; otherwise, characteristics of importance may be hidden.”

In other words, when the market studied in a specific timeframe doesn’t allow to identify any pattern. It is useful in these cases to observe the market in a higher time frame, for example, the daily or weekly timeframes.

The Case of Study

Consider the EURGBP cross in its 4-hour chart, which shows a rally developed from early May until the middle of August 2019. The remarkable observation is that the first part of the rally was faster than the second part of the range of study.

As a first step, let us observe the big-picture; in this case, we will study the EURGBP cross in a weekly timeframe. As can be noted, the EURGBP developed an extended Wave 3.

Both the RSI and the Awesome Oscillator display a bearish divergence, that helped us to identify waves (3) and (5).

In consequence, in view that the five-wave sequence has been completed, it is time for a corrective movement in three waves.

The next chart shows the possible recount of the EURGBP cross.

In the above figure, we observe that the cross could have fully completed a cycle that, as we know, includes a motive impulse and its corrective sequence. Thus, if our market hypothesis is that the EURGBP has completed a cycle, then our forecast should consider a new five-wave rally.

The following chart unveils the upward movement developed by the EURGBP from its bottom, established in early May.

In the next educational article, we will expand the analysis on how to decipher a fast market using the Elliott Wave Principle.

Tags Analysis, Crypto, Elliott Wave, Fast Markets, Forex, Technical Analysis, trading

Ichimoku

The Three Principles – Timespan Principle

Post author By Arthur Simmons
Post date 17 November, 2019
No Comments on The Three Principles – Timespan Principle

The Three Principles – Timespan Principle
In another correlation to Western analysis, Hosada’s Ichimoku Kinko Hyo system has a timing component within the system. The numbering system used in Ichimoku

Timepsan Principle - Combined Counts

The Three Principles – Timespan Principle

In another correlation to Western analysis, Hosada’s Ichimoku Kinko Hyo system has a timing component within the system. The numbering system used in Ichimoku is unique when compared to Western analysis. The reason for the numbering and counts in Ichimoku is related to the cultural importance of some numbers in Japan versus others. Numbers that would be considered ‘lucky’ in Japan are the same numbers in the West and many other cultures – particularly 7 and 9. But those numbers themselves are not what is important. How, exactly, this numbering and count system came to be developed in the fashion that it was developed I do not know. The following is directly from Ichimoku Chats – An Introduction to Ichimoku Kinko Clouds by Nicole Elliot – I heavily suggest getting her book (the 2^nd edition). The important numbers are:

9, 17, 26, 33, 42, 65, 76, 129, 172, 257

If you ever study the work of WD Gann, then these numbers are not only familiar but non-random.

Numbering

Numbering the candlesticks in a pattern is done with traditional Arabic numbers (1,2,3,4,5, etc.) and English letters (A, B, C, D, E, etc.). When counting how many candles are in a trend/wave, the last candle in an uptrend is counted as the first in the down wave and vice versa. See below:

Timespan Principle – Candle Counts

Notice that candle 19 is also A, candle H is also 1. Also, notice that the time counts (total number of candles) in this ‘N’ wave all represent essential numbers in the Ichimoku number system. 19 is close to 17, H is close to 9, and 8 is close to 9.

Kihon Suchi – ‘Day of the turn.’

Nicole Elliot’s work is fantastic – it’s refreshing to read an analyst and trader who updates her work and goes through the grueling process of keeping it relevant. Kijun Suchi (‘the day of the turn’). The Kihon Suchi is the Hosada’s Timespan Principle put into practice. It is very similar to the use of Gann’s cycles of the Inner Year or horizontal Point & Figure counts to identify turns in the markets. Let’s use the image above again as an example. Below, I’ve separated the ‘N’ wave into A, B, and C.

Timespan Principle – Combined Counts

When adding the number of bars in A, B, and C, we always subtract 1 from each wave after the first. For example, if we counted five waves and the total was 100 bars, we would subtract 4 from 100; 96. On the chart above, the total number of bars of A, B, and C is 33 bars. We subtract 2 from 33 to get 31. This is where the Timespan Principle using Kihon Suchi comes into play. We should be able to project the end of the down drive that will occur after wave C. Does it work? Let’s see.

Timespan Principle – A+B+C = D

Below is another example. In reality, the use of the Timespan Principle is a very simplified version of a phenomenon known as a foldback pattern. But Japanese analysis focuses on the quality of equilibrium, so it makes sense to see this kind of behavior from a method that focuses on balance in all things.

Timespan Principle – Symmetrical Inverse Head & Shoulder Pattern

Sources: Péloille, Karen. (2017). Trading with Ichimoku: a practical guide to low-risk Ichimoku strategies. Petersfield, Hampshire: Harriman House Ltd.

Patel, M. (2010). Trading with Ichimoku clouds: the essential guide to Ichimoku Kinko Hyo technical analysis. Hoboken, NJ: John Wiley & Sons.

Linton, D. (2010). Cloud charts: trading success with the Ichimoku Technique. London: Updata.

Elliot, N. (2012). Ichimoku charts: an introduction to Ichimoku Kinko Clouds. Petersfield, Hampshire: Harriman House Ltd.

Tags Analysis, Crypto, Education, Forex, Ichimoku, ichimokukinkohyo, Learning, Technical Analysis, trading, trend, trending

Ichimoku

The Three Principles – Wave Principle

Post author By Arthur Simmons
Post date 15 November, 2019
No Comments on The Three Principles – Wave Principle

A man named Hidenobu Sasaki brought Hosada’s Ichimoku system and the three principles to contemporary times. He worked for Citigroup in Japan when he published his 1996 book, Ichimoku Studies.

These three principles have shared characteristics of many various styles and theories in Western technical analysis. A couple of examples of those would be Elliot Wave Theory and Tom DeMark’s Sequential. I would encourage all readers to pick up Nicole Elliots 2^nd edition of Ichimoku Charts – An introduction to Ichimoku Kinko Clouds. It is my opinion that her work is the most in-depth on these three principles – even though she reports she does not use them. I also do not use any of these three principles. Nonetheless, they are a component of the entire Ichimoku system.

Principle One – The Wave Principle

The Wave Principle is an enigma. It is both singular in its nature when compared to Western analysis but also very complimentary. Ichimoku is a very dynamic form of analysis with broad interpretation and flexibility available for the analyst/trader. Elliot Wave Theory is a very static form of analysis with strict rules that must be adhered too.

Much of these patterns are going to be very much the same patterns that new traders and analysts first discover when learning Western-style technical analysis. One of the more interesting elements of the Wave Principle is the naming of each pattern. I am not sure if it was Sasaki or Hosada who used English letters to identify the shapes of these patterns. Many of these patterns are self-explanatory and familiar.

One Wave – ‘I’ Wave

Wave One – ‘I’ Wave

Called the ‘I’ Wave, it is a simple (probably overly simple) single wave. I would call it a trendline more than a wave, but that is what Hosada calls it.

Two Wave – ‘V’ Wave

The ‘V’ wave is one of the most common patterns in technical analysis, it’s one of the first patterns we learn, but it’s not a specific pattern that we learn by itself. The ‘V’ wave is part of the M or W structure that makes up the majority pattern theory in technical analysis.

Three Wave – ‘N’ Wave

Again, this is a common pattern that most of you are already familiar with. The ‘N’ wave pattern in Nicole Elliot’s book shows symmetrical waves – which is important because the ‘N’ wave is essentially an AB=CD pattern, one of the building blocks of Harmonic Patterns. It is also a perfect description of what an A-B-C corrective wave in Elliot Wave Theory looks like.

Five Wave – ‘P’ Wave and ‘Y’ Wave

Five Wave – ‘P’ Wave

The ‘P’ wave is essentially another name for a popular and powerful continuation pattern known as a pennant. ‘P’ waves can also represent ascending or descending triangles. You will also see them in Ending Diagonals in Elliot Wave Theory. The pattern should also be called a ‘b’ pattern because the inverse of the ‘P’ pattern, a bullish pennant, is a ‘b’ shaped pattern – a bearish pennant.

Five Wave – ‘Y’ Wave

The ‘Y’ wave is probably more commonly referred to as a megaphone pattern, broadening top or broadening bottom.

Combined Patterns

Combined Waves

Although it may not need to be said, charts will show multiple patterns at any given time. And due to the fractalized nature of technical analysis, patterns within patterns are normal.

Wave Counts

So this part is the one where it will either make little sense or no sense. If you are new to technical analysis and/or never learned Elliot Wave Theory, the wave count component of the wave principle will make little sense. If you know the Elliot Wave Theory, then the wave count component will make no sense. Waves in Ichimoku are measured by time – a very Gann based approach. Trends are either Long-term or Short-term with no delineation between whether it is a bull market or bear market. There is no limit to the number of waves that can exist in a Long-term trend, but Short-term trends must be in single, double, or triple waves. The Ichimoku wave count is similar and very different from how we measure wave counts in the Elliot Wave Theory. In Elliot Wave Theory, moves occur in either three (corrective) or five (impulse) waves.

Sources: Péloille, Karen. (2017). Trading with Ichimoku: a practical guide to low-risk Ichimoku strategies. Petersfield, Hampshire: Harriman House Ltd.

Patel, M. (2010). Trading with Ichimoku clouds: the essential guide to Ichimoku Kinko Hyo technical analysis. Hoboken, NJ: John Wiley & Sons.

Linton, D. (2010). Cloud charts: trading success with the Ichimoku Technique. London: Updata.

Elliot, N. (2012). Ichimoku charts: an introduction to Ichimoku Kinko Clouds. Petersfield, Hampshire: Harriman House Ltd.

Tags Analysis, Candlestick, cryptocurrency, Education, expert, Forex, future, Ichimoku, ichimokukinkohyo, japanese, Learning, predict, prediction

Ichimoku

Ichimoku Strategy #2 – K-Cross, The Day Trading Strategy

Post author By Arthur Simmons
Post date 7 November, 2019
No Comments on Ichimoku Strategy #2 – K-Cross, The Day Trading Strategy

The Kijun-Sen Crossover (Crossunder) Strategy is the second in my series over Ichimoku Kinko Hyo. There are two trades setups provided for the long and short side of a market.

K-Cross Strategy Bearish Entry

The Kijun-Sen Crossover (Crossunder) Strategy is the second in my series over Ichimoku Kinko Hyo. There are two trades setups provided for the long and short side of a market.

The Kijun-Sen Crossover (Crossunder) Strategy is the second in my series over Ichimoku Kinko Hyo. There are two trades setups provided for the long and short side of a market. This strategy also comes from Manesh Patel’s book, Trading with Ichimoku Clouds: The essential guide to Ichimoku Kinko Hyo technical analysis.

Patel called this the day-trading strategy. He warned that this trading strategy has the lowest risk factor out of all of his strategies. The positive expectancy rate is lower, and so being stopped out of trades is a normal consequence of this strategy. He also indicated that the win/loss ratio could be extremely high.

Kijun-Sen Cross Bullish Rules

Price crosses above the Kijun-Sen.
Tenkan-Sen greater than the Kijun-Sen.
1. If the Tenkan-Sen is less than the Kijun-Sen, then the Tenkan-Sen should be pointing up while the Kijun-Sen is flat.
Chikou Span in open space.
Future Senkout Span B is flat or pointing up.
1. If Future Senkou Span A is less than Future Senkou Span B, then Future Senkou Span A must be pointing up.
Price, Tenkan-Sen, Kijun-Sen, and Chikou Span should not be in the Cloud. If they are, it should be a thick cloud.
Price not far from the Tenkan-Sen or Kijun-Sen
Optional: Future Cloud is not thick.

K-Cross Strategy Bullish Entry

Kijun-Sen Cross Bearish Rules

Prices cross below the Kijun-Sen.
Tenkan-Sen less than the Kijun-Sen.
1. If the Tenkan-Sen is less than the Kijun-Sen, then the Tenkan-Sen should be pointing up while the Kijun-Sen is flat.
Chikou Span in open space.
Future Senkou Span B is flat for pointing down.
1. If Future Senkou Span A is greater than Future Senkou Span B, then Future Senkou Span A must be pointing down.
Price, Tenkan-Sen, Kijun-Sen, and Chikou Span should not be in the Cloud. If they are, it should be a thick Cloud.
Price not far from the Tenkan-Sen or Kijun-Sen
Optional: Future Cloud is not thick.

K-Cross Strategy Bearish Entry

Sources: Péloille Karen. (2017). Trading with Ichimoku: a practical guide to low-risk Ichimoku strategies. Petersfield, Hampshire: Harriman House Ltd.

Patel, M. (2010). Trading with Ichimoku clouds: the essential guide to Ichimoku Kinko Hyo technical analysis. Hoboken, NJ: John Wiley & Sons.

Linton, D. (2010). Cloud charts: trading success with the Ichimoku Technique. London: Updata.

Elliot, N. (2012). Ichimoku charts: an introduction to Ichimoku Kinko Clouds. Petersfield, Hampshire: Harriman House Ltd.

Tags Analysis, bear, bull, buy, Chart, Charting, Crypto, Education, Forex, forexacademy, Ichimoku, kijunsen, learn, Learning, range, sell, Technical, Technical Analysis, tenkansen, trading, trend

Forex Harmonic

The Crab Pattern

The crab pattern is another of Carney’s harmonic patterns and one of the first that he discovered. The essential condition of this pattern is the

The Crab Pattern

The crab pattern is another of Carney’s harmonic patterns and one of the first that he discovered. The essential condition of this pattern is the

The Crab Pattern

The crab pattern is another of Carney’s harmonic patterns and one of the first that he discovered. The essential condition of this pattern is the extremely tight and resistance endpoint of 161.8% of the XA leg.

Like almost all harmonic patterns, the potential reversal in price action after this pattern has been complete is generally fast, violent and powerful. However, Carney gives special attention to this pattern and reports that it is usually the most extreme of all harmonic patterns.

The pattern is not as frequent as others due to its five-point extension structure. It is desirable to utilize an oscillator to filter entries of this pattern according to any divergence between price and your selected oscillator.

Crab Pattern Elements

B must be a 61.8% retracements or less of XA.
The BC projection can be quite extensive, generally 261.8%, 314%, or 3618%.
An AB=CD 161.8% or an Alternate AB=CD 127% is required for the formation of this pattern.
The extension of 161.8% of XA is the end limit of the pattern.
C has an expansive range between 38.2% and 88.6%.

Sources: Carney, S. M. (2010). Harmonic trading. Upper Saddle River, NJ: Financial Times/Prentice Hall. Gilmore, B. T. (2000). Geometry of markets. Greenville, SC: Traders Press. Pesavento, L., & Jouflas, L. (2008). Trade what you see: how to profit from pattern recognition. Hoboken: Wiley.

Tags Analysis, bear, bull, carney, Chart, crab, Education, Forex, gartley, harmonic, scort, Technical

Forex Harmonic

The Bat Pattern

Harmonic Pattern Example: Bearish Bat
The Bat Pattern
The Bat Pattern is another harmonic pattern that was not identified by Gartley, but instead by the great Scott M. Carney –

Harmonic Pattern Example: Bearish Bat

The Bat Pattern

The Bat Pattern is another harmonic pattern that was not identified by Gartley, but instead by the great Scott M. Carney – found in Volume One of his Harmonic Trading series (I believe that Mr. Carney’s work is essential in your trading library).

I am particularly grateful to Carney’s work because it was his work that introduced me to a very powerful Fibonacci retracement level: 88.6%. Previously, I have followed Connie Brown’s suggestions in her various books utilizing only the 23.6%, 50%, and 61.8% Fibonacci levels – the 88.6% is now a near-constant in my own analysis and trading. That particular level, the 88.6% level, is the primary level to reach with the Bat pattern.

One of the key characteristics of this pattern is the strength, power, and speed of the reversals that occur after a confirmed and completed pattern is verified. As a Gann based trader, this is the pattern I personally look for to identify the ‘confirmation’ swing in a new trend (the first higher low in a reversing downtrend and the first lower high in a reversing uptrend).

Bat Pattern Elements

B wave must be less than the 61.8% retracement of XA – ideally the 38.2% or 50%.
BC projection must be at least 1.618.
The AB=CD pattern is required and is often extended.
C has an expansive range between 38.2% and 88.6%.
The 88.6% Fibonacci retracement is a defining and particular level to the Bat Pattern.
The 88.% D retracement is the defining and exact limit of the end of this pattern.

Ideal Bullish Bat Conditions

50% retracement of XA.
Exact 88.6% D retracement of XA.
BC wave 200%.
Alternate AB=CD 127% is required.
C should be inside the 50% and 61.8% retracement range.

Ideal Bearish Bat Conditions

B wave must be less than the 61.8% retracement of XA – ideally the 38.2% or 50%.
BC projection must be at least 88.6%.
BC projection minimum of 161.8% with the max extensions between 200% to 261.8%.
AB=CD is required, but the Alternate 127% AB=CD is ideal.
C wave retracement can vary between the 38.2% to 88.6% retracement levels.

Tags AB=CD, alternate, Analysis, bat, carney, failed, Fibonacci, gartley, harmonic, harmonics, ratio, Retracement, reversal, scott, Technical, trading, trend

Crypto Market Analysis

Daily Crypto Review, Oct 17 – Bears Taking Over, Cryptocurrencies in the Red

Post author By Ilija Rankovic
Post date 17 October, 2019
No Comments on Daily Crypto Review, Oct 17 – Bears Taking Over, Cryptocurrencies in the Red

Cryptocurrency market’s attempt to stabilize its price after the new highs last week has failed, and bears have started taking over. Slowly but steadily, most cryptocurrencies lost their gains and

Cryptocurrency market’s attempt to stabilize its price after the new highs last week has failed, and bears have started taking over. Slowly but steadily, most cryptocurrencies lost their gains and then some. The past 24 hours came with an increase in volume as bear presence increased. Almost every single cryptocurrency ended up in the red today. Bitcoin fell down 2.13%, while Ethereum lost 2.91% of its value. XRP held on a bit better and lost only 1.99%, which would put it at the spot of the cryptocurrency that lost the least in the past 24 hours out of the top10 (excluding Tether).

Bitcoin’s dominance has increased slightly when compared to the previous day. It now sits at 66.4%, which represents a 0.02% increase from yesterday.

Most cryptocurrencies ended up being in the red in the past 24 hours, which reflected on the market cap of the cryptocurrency industry as a whole. The industry now has a market capitalization of $217.73 billion.

What happened in the past 24 hours

As volume increased steadily for a couple of days now, people were expecting a move upwards. However, they were greeted with a surprise as the market started dropping in price. As suspected yesterday, we can now say with certainty that the volume is coming from the bears instead of bulls, at least in the past couple of days. Most cryptocurrencies tested their immediate support lines and broke them downwards, trying to reach a point of consolidation. Only a handful of cryptocurrencies managed to stay out of the red today, while most of the cryptocurrencies lost several percents of their value.

Technical analysis

Bitcoin

Bitcoin’s short-term chart looks pretty grim at the moment. The bulls have seemingly left the building, and the bears are running the place. With volume increasing dramatically (and not just for one quick spike), Bitcoin seems to be dropping down slowly all throughout the day. The price seems to drop quickly and then consolidate at the next support line, which then gets rejected, and the price gets lower. That’s exactly what happened three times since the last green day Bitcoin has had. Bitcoin’s immediate support is currently at $7,912, and it is holding up well for now.

Bitcoin’s RSI has just left the oversold territory while the price remained on the same level. As for volume increases, it looks like that the big downward-facing price spikes require less and less volume, while volume during consolidation periods is increasing.

Ethereum

As stated in yesterday’s article, Ethereum started mirroring Bitcoin’s movements due to a lack of identity at the moment (mostly volume). Ethereum started falling in price slowly, dropping from $181 to $179, which is when the big drop happened. The spike dropped Ethereum from $179 all the way down to $172 in just over one hour. This price level became support as Ethereum rejected lower price points. The price is now in between the $172 support line and the $176.3 resistance line.

While its volume seems to be elevated, it does not seem enough to break from the major influence that Bitcoin has become.

XRP

Unlike Bitcoin and Ethereum, XRP did not have such a bad day. Even though it lost some value, it did not break any support lines. One the other hand, it did fail to break a resistance line as it tried to push past $0.2855 on one occasion. After the attempt of breaking the resistance failed, XRP dropped down to its support line, which is sitting at $0.282 and bounced from it to the middle of the “range.” If other cryptocurrencies keep dropping in value slightly every day, XRP might follow, but there is also a high probability of it just staying where it is price-wise as the bear volume avoided coming into it (at least for now).

XRP has not seen the same volume increase as with Bitcoin and Ethereum, which further proves that bear money has entered the market (it just avoided XRP for some reason).

Tags Analysis, bitcoin, BTC, Crypto, cryptocurrency, ETH, Ethereum, marker, Ripple, Trade, XRP

Forex Harmonic

AB=CD Pattern

AB=CD Pattern
[caption id="attachment_42589" align="aligncenter" width="1530"] Bearish AB=CD Harmonic Pattern[/caption]

[caption id="attachment_42590" align="aligncenter" width="1530"] Bullish AB=CD Harmonic Pattern[/caption]

The AB=CD Harmonic Pattern is the most basic and common

AB=CD Pattern
[caption id="attachment_42589" align="aligncenter" width="1530"] Bearish AB=CD Harmonic Pattern[/caption]

[caption id="attachment_42590" align="aligncenter" width="1530"] Bullish AB=CD Harmonic Pattern[/caption]

The AB=CD Harmonic Pattern is the most basic and common

AB=CD Pattern

Bearish AB=CD Harmonic Pattern

Bullish AB=CD Harmonic Pattern

The AB=CD Harmonic Pattern is the most basic and common pattern in harmonic geometry. It is the building block of all other patterns. It is the ‘bread and butter’ pattern. Pesavento and Carney recommended that this pattern should be learned first – and reading this article does not qualify for having learned this pattern. Like any form of analysis, you will need to regularly and consistently train your brain and eyes to find this pattern. You won’t be able to get very far in the study of harmonic patterns until you can see this pattern just by glancing at a chart.

Rules

BC cannot exceed AB.
D must exceed B to form a completed AB=CD pattern.

Characteristics

CD is an extension of AB, generally from the Fibonacci ratio of 1.27% to 2.00%.
CD’s slope is steep or longer/wider than AB.
BC often corrects to the Fibonacci ratios of 38.2%, 50%, 61.8%, or 78.6%.

AB=CD Pattern Reciprocal Ratios

Point C Retracement	BC Projection
38.2%	24% or 261.8%
50%	200%
61.8%	161.8%
70.7%	141%
78.6%	127%
88.6%	113%

Tags ab, Analysis, carney, cd, Education, Fibonacci, Forex, gartley, guide, harmonic, learn, Technical

Forex Harmonic

Harmonic Geometry

Gartley Harmonic Pattern Example: Cipher Pattern
Harmonics – Gartley Geometry
Out of the myriad of different approaches and methods of Technical Analysis, there seems to be one particular method

Gartley Harmonic Pattern Example: Cipher Pattern

Harmonics – Gartley Geometry

Out of the myriad of different approaches and methods of Technical Analysis, there seems to be one particular method that draws new traders to it more than Gartley Harmonics. People see these wonky triangles on a chart and automatically assume that because it looks so complicated and esoteric, they should probably learn these patterns right away. If that sounds like yourself, stop reading the remainder of this article and come back once you have learned the fundamentals of technical analysis. And certainly, don’t implement a new and complicated form of technical analysis like that harmonic geometry you’re your trading until you can look at a chart and tell what patterns exist just by glancing at it. Folks – I need to repeat this: Harmonic Geometry takes time to learn – this isn’t like learning about support and resistance. It’s not a topic that you can read about, understand, grasp, and learn in one weekend and then implement into your trading. The best way I could explain the time it takes to learn Carney’s harmonic structures is comparing it to the time it takes for a person to be able to look at a chart using the Ichimoku Kinko Hyo system and know, just by looking, if a trade can be taken and what the market is doing. That’s the best comparison I can find. Until you can look at a chart and within 10-20 seconds identify an important harmonic pattern on that chart – without having to draw it – then you should not use this in your trading. You need to become an expert in the analysis part before you start to trade with it.

I believe we should be calling these patterns Carney Harmonics or Gilmore Harmonics because Gartley never gave a name any designs – the genius work Bryce Gilmore and Scott Carney did that in his various Harmonic Trader series books. Scott Carney is the man who discovered and named a great many patterns and shapes that we see today. And Carney’s work is some of the most developed and contemporary work of Gann’s and Gartley’s that exists today. But the understanding and application of Carney’s and Gilmore’s patterns have been woefully implemented by many in the trading community. Any of you reading this section or who were drawn to it because of the words ‘harmonic’ or ‘Gartley’ must do two things before you would ever implement this advanced analysis into any trading plan:

Read Profits in the Stock Market by H.M. Gartley – this is the foundation of learning and identifying harmonic ratios.
Read Scott Carney’s Harmonic Trader series: Harmonic Trading: Volume 1, Harmonic Trading: Volume 2, and Harmonic Trading: Volume 3.

There are a series of other works by expert analysts and traders that address Gartley’s work and are worth reading, such as Pesavento, Bayer, Brown, Garrett, and Bulkowski. Do not consider their work merely supplementary – I find their work necessary to fully grasp the rabbit hole you are attempting to go down. Harmonic Patterns are an extremely in-depth form of analysis that encompasses multiple esoteric and contemporary areas of technical analysis. If you think finding the patterns and being able to draw them is sufficient to make a trading plan, you will lose a lot of money. Additionally, some words of wisdom from the great Larry Pesavento: An understanding of harmonics requires an in-depth knowledge of Fibonacci.

Harmonic Geometry, in a nutshell

In a nutshell, Harmonic Geometry is a study and analysis of how markets move and flow as a measure of proportion from prior price levels. These proportional levels are measured using Fibonacci retracements and extensions. When these patterns (triangles) complete, they create powerful reversal opportunities. Carney calls the end of these patterns PRZs – Potential Reversal Zones. The significant error that many new traders and analysts make when they find a complete pattern is the same problem many new traders make with any new tool, strategy, or method: they don’t confirm. Make no mistake: Harmonic Patterns are powerful. But like any analysis or tool, it is not sufficient to take a trade. Harmonic Pattern analysis is just one tool in your trading toolbox. And like any toolbox, you need multiple tools to tackle the various projects and goals you want to achieve.

Harmonic Trading Ratios

Contrary to popular belief, Gartley did not utilize Fibonacci levels or ratios in his work. Nonetheless, harmonic ratios are based on three classifications of harmonic ratios: Primary Ratios, Primary Derived Ratios and, Complementary Derived Ratios. As you develop a further understanding of the various patterns and their ratios, you will come to appreciate the very defined structure of this type of technical analysis.

Primary Ratios

61.8% = Primary Ratio
161.8% = Primary Projection Ratios

Primary Derived Ratios

78.6% = Square root of 0.618
88.6% = Fourth root of 0.618 or Square root of 0.786
113% = Fourth root of 1.618 or Square root of 1.27
127% = Square root of 1.618

Complementary Derived Ratios

38.2% = (1-0.618) or 0.618 squared
50% = 0.707 squared
70.7% = Square root of 0.50
141% = Square root of 2.0
200% = 1 + 1
224% = Square root of 5
261.8% = 1.618 squared
314% = Pi
361.8% = 1 + 2.618

Elliot Wave and Harmonic Geometry

Ellioticians are very aware of the strong connectedness that Gartley’s and Carney’s work has within Elliot Wave Theory. There are significant elements between the two types of technical analyses that create a mutual symbiosis. However, while they are very similar, it is crucial to understand that there are some significant differences between the two.

Elliot	Gartley
Dynamic, Flexible.	Static, Definite.
Wave counts are more fluidly labeled.	Each move is labeled either XA, AB, BC, or CD.
Many variations and intepretations	No variation permitted.
Wave alignment varied and malleable.	Each price point alignment must be exact.

The combination of Elliot and Gartley is powerful, and Gartley Harmonics can help confirm Elliot Waves. The following articles will describe, in further detail, specific Harmonic Patterns.

Tags Analysis, carney, elliotwave, Forex, gartley, harmonics, jouflas, method, pesavento, Strategy, Technical, trading, xabcd

Crypto Market Analysis

Daily Crypto Review, Oct 10 – Market pushes up again, majority of cryptocurrencies in the green

Post author By Ilija Rankovic
Post date 10 October, 2019
No Comments on Daily Crypto Review, Oct 10 – Market pushes up again, majority of cryptocurrencies in the green

After yesterday’s day of consolidation, the markets decided to head up and test new prices. With increased volume and new money coming into the market, Bitcoin increased its price by

After yesterday’s day of consolidation, the markets decided to head up and test new prices. With increased volume and new money coming into the market, Bitcoin increased its price by 4.5%, while Ethereum managed to go up by 6.62% and XRP by 1.35%. After reaching RSI overbought territories, the prices started stabilizing at the same or slightly lower levels, while RSI managed to settle down.

As both Bitcoin and most altcoins are in the green, the total cryptocurrency market cap has increased. It is now hovering at around $231,8 billion, just down from the daily high of $232,47 billion. Bitcoin is still keeping its dominance high, currently being around 66.6%.

What happened in the past 24 hours?

Cryptocurrency markets, judging by the increase of volume, have had an influx of new money coming. That has sparked some solid price growth, especially if we expand our views to not only Bitcoin but the rest of cryptocurrencies. Out of the top50 cryptocurrencies, only eight have been in the red. Out of the eight being in the red, half of them are stablecoins, which happen to lose out when the cryptocurrency markets go up. On top of this upward-facing move, the prices are not consolidating far below the levels they reached today. In fact, most of the cryptocurrencies kept their gains and are looking promising in the short-term.

Technical analysis

Bitcoin

Bitcoin has reached a new short-term high of just above $8700, before stabilizing its price at just below $8,600. The new influx of money coming into the markets helped Bitcoin surpass the immediate resistances and start making its way up. With volume skyrocketing, Bitcoin flew through the immediate resistance lines and stopped as the volume started reducing. However, it did not lose its gains and started consolidating at the top, which is rarely seen. This move has sparked some new thoughts in terms of whether the altcoins season has started or not. As the price reached the top of the movement, RSI indicated it was heavily overbought but managed to reach lower levels as the price consolidated.

Ethereum

Ethereum has surpassed Bitcoin in gains today, reaching the price of $196.3. It has retained its gains and started consolidating at close to its daily highs, which is a highly bullish sign. However, that may not be as promising as it sounds. Ethereum found new resistance at the $196.3 line. This price point acted as support and resistance as far as September and proved to be effective as both support and resistance. Only time will tell whether Ethereum can surpass this resistance, or if it will fall back to its previous levels.

On a brighter note, Ethereum’s RSI is almost identical to the one currently seen on the Bitcoin chart. After being heavily in the overbought territory, it started to fall while the price did not follow it. Even though the volume died down quite a bit, it still sits at a higher level than what it was before today’s spike.

XRP

Unlike Bitcoin and Etherum, XRP did not have a particularly good day. XRP moved, fueled by the price growth of Bitcoin and other cryptocurrencies, passed the 23.6% resistance line that the Fib retracement from the Oct 7th-Oct 8th move. However, it quickly found resistance at the top of the Fib retracement (0%), failed to break it, and retraced to the 23.6% line, which now acts as support.

Another thing separating XRP from the top2 cryptocurrencies at the moment is volume levels. Unlike the other two, XRP’s volume is currently lower than what it was before the upward-facing spike. Even with the RSI indicator reducing and the price staying relatively high, it might not be enough to keep XRP on a green path.

Tags Analysis, bitcoin, BTC, Crypto, ETH, Ethereum, Market analysis, Ripple, XRP

Forex Indicators

The Truth About Moving Averages

Post author By Arthur Simmons
Post date 9 October, 2019
No Comments on The Truth About Moving Averages

Moving Averages
Of all the technical indicators that exist, moving averages are probably the most well known. Moving averages are also one of the only technical indicators ever used by

Moving Averages

Of all the technical indicators that exist, moving averages are probably the most well known. Moving averages are also one of the only technical indicators ever used by market news broadcasters. Moving averages are generally one of the first types of indicators that new analysts and traders will learn about because they simple to calculate and simple to interpret. But are moving averages useful for trading? Are they appropriate for trading?

Dangers of Moving Averages

I want to preface any further commentary on moving averages by saying I am strictly opposed to their use. Outside of any singular purpose for their use, I will never advocate for their use of an analytical tool or a trading tool. The reasons for this opinion are my own trading experience, and the experience of teaching students – who have all (myself included) fell into the old trap of moving average crossover systems and the lies that are sold about their usefulness and profitability. That is not to say they are not helpful, useful, or profitable – but the temptation to believe in their positive expectancy and profitability is often too hard to avoid.

Moving Averages: A simple visual representation of data

20-period Simple Moving Average

The orange line on the chart above is a moving average — specifically, a Simple Moving Average (SMA). A Simple Moving Average is a line that is plotted, showing the average close of a defined number of periods. On the chart above, it is a 10-period moving average. Meaning it is taking the last ten candlestick closes, adding them up, dividing that number by ten, and then displaying it as a line. But a Simple Moving Average is just one type of average. There is an enormous amount of various moving averages, each with their specific calculations. The chart below shows only some of those different moving averages, all with a 10-period average.

Various moving averages

From the image above, you can probably say that, depending on the moving average used, some averages are more responsive to price changes than others. Some move a lot; some move just a little. There is a myriad of different reasons why one moving average would be used over another, and there are specific moving averages that to be used only with particular trading systems and methods. Now, after I’ve bashed moving averages, I think it’s essential that I do show some examples of moving averages positively. The first would be using a long period moving average on a higher time frame. For example, a standard method of determining whether a stock is bullish or bearish is to use a 200-period on a daily chart. If a stock is trading above the 200-day average, it is considered bullish; if it is trading below, it is bearish.

200-day Moving Average of S&P500

Another example of a trading system using moving averages effectively would be Goichi Hosada’s Ichimoku Kinko Hyo system. This system will be discussed in much greater detail in another article, but the Ichimoku system is based almost entirely on moving averages. There is a significant difference between Western moving averages and Japanese moving averages. The Tenkan-Sen and Kijun-Sen in the Ichimoku system are calculated using the mid-point of the default periods. The utilization of the mid-point is particular not to just the Ichimoku system but is indicative of a large amount of Japanese analysis, which focuses on ‘balance’ and ‘equilibrium.’ So while I do rail against the use of Western moving averages, the use of the Ichimoku system’s moving averages is undoubtedly a significant exception due to it being a full trading system and one of the few trading systems that are a proven and profitable system.

Ichimoku Kinko Hyo

Tags Analysis, Average, bear, bull, Chart, Ichimoku, ma, Moving, Moving Average, movingaverage, Technical, trend

Forex Indicators

Let’s Trade Divergences!

Trading with Divergences
Almost all forms of technical analysis involve the use of lagging indicators – or lagging analysis. There are very few indicators that use any type of leading

Trading with Divergences

Almost all forms of technical analysis involve the use of lagging indicators – or lagging analysis. There are very few indicators that use any type of leading analysis. That is because we don’t know what will happen. All we can do is interpret what kind of future behavior may occur based on past events – this is the basis of all psychology and significant portions of medicine: we can only predict future behavior by analyzing past behavior. Now, just because most of the tools and theories used in technical analysis are lagging in nature – it doesn’t mean that there is no method of leading analysis.

Divergences are one method of turning lagging analysis into leading analysis – it’s not 100% accurate, but divergences can detect anomalies and differences in normal price behavior. Divergences are useful in identifying when a significant trend may be ending or when a pullback may continue in the prior trend direction. Let’s review some of those now.

Divergences are easily one of the most complex components to learn in technical analysis. First, they are challenging to identify when you are starting. Second, it can be confusing trying to remember which divergence is which and if you compare highs or lows. It is essential to know those divergences themselves are not sufficient to decide whether or not to take a trade – they help confirm trades.

When we look for divergences, we are looking for discrepancies between the directions of highs and lows in price against another indicator/oscillator. The RSI is the oscillator used for this lesson. We are going to review the four main types of divergences:

Bullish Divergence
Bearish Divergence
Hidden Bullish Divergence
Hidden Bearish Divergence

Bullish divergence

A bullish divergence occurs, generally, at the end of a downtrend. In all forms of bullish divergences, we compare swing lows in price and the oscillator. For a bullish divergence to happen, we should observe price making new lower lows and the oscillator making new higher lows. When bullish divergence occurs, prices will usually rally or consolidate.

Bearish divergence

A bearish divergence is the inverse of a bullish divergence. A bearish divergence occurs near the end of an uptrend and gives a warning that the trend may change. In all forms of bearish divergence, we compare swing highs in price and the oscillator. For a bearish divergence to happen, we should observe price making new higher highs and the oscillator making new lower highs.

Hidden divergences

The last two divergences are known as hidden divergences. Hidden does not mean that it is difficult to see or hard to find – rather, it shows where a short term change in direction is actually a continuation move. Think of it as a pullback or a throwback in a larger uptrend or downtrend. Hidden divergences tell you of a probable continuation of a trend, not a broad trend change. If you combine these with common pullback and throwback patterns such as flags and pennants, then the identification and strength of a hidden divergence can yield extremely positive results.

Hidden Bullish Divergence

A hidden bullish divergence can appear in uptrends and downtrends but is only valid if there is an existing uptrend. It’s easier to think of hidden bullish divergences as pullbacks or continuation patterns. For hidden bullish divergences, we should observe price making new higher lows and the oscillator making new lower lows. The expected price behavior is a continuation of higher prices.

Hidden Bearish Divergence

Our final divergence is hidden bearish divergence. Just like hidden bullish divergence, hidden bearish divergence can appear in both uptrends and downtrends but is only valid in an existing downtrend. Hidden bearish divergence is identified when price makes lower highs, and the oscillator makes new higher highs. We should observe a resumption in the prior downtrend when hidden bearish divergence is identified.

Key Points

Regular Bullish Divergence

End of a downtrend.
Often the second swing low.
Price makes new Lower Lows, but the oscillator makes Higher Lows.
Trend changes to the upside.

Regular Bearish Divergence

End of an uptrend.
Often the second swing high.
Price makes Higher Highs, but the oscillator makes Lower Highs.
Trend changes to the downside.

Hidden Bullish Divergence

Valid only during an uptrend.
Price makes Higher Lows, but the oscillator makes a Lower Low.
The trend should continue to the upside.

Hidden Bearish Divergence

Valid only during a downtrend.
Price makes Lower Highs, but the oscillator makes Higher Highs.
The trend should continue to the downside.

Final words

It may be confusing trying to remember which divergence is which and you’ll find yourself asking questions such as, “do I use highs on this divergence or lows?” It’s easier to think about measuring divergences like this:

All Bullish divergences are going to compare lows to lows – lows in price and lows in an oscillator.

All Bearish divergences are going to compare highs to highs – highs in price and highs in an oscillator.

Tags Analysis, Bearish, Bullish, divergence, down, Forex, MACD, RSI, Technical, trend, trending, up

Forex Price Action

Support and Resistance

Support and Resistance
One of the fundamentals of Technical Analysis is the theory and methodology of support and resistance. In a odd turn of events, some of the most advanced

Support and Resistance

One of the fundamentals of Technical Analysis is the theory and methodology of support and resistance. In a odd turn of events, some of the most advanced methods of identifying support and resistance are not only relatively unknown, but they are some of the original Technical Analysis theories. Some of those methods include identifying support and resistance according to naturally squared numbers, numbers related to an angular nature in Gann’s tools, harmonic ratios, pivots, Fibonacci levels, and other more esoteric methods. For this article, though, the focus is on identifying support and resistance based on prior traded price levels and ranges**.

What are Support and Resistance?

When you hear the word’s support and resistance, the definitions of those words may be the first thing that comes to your mind. Support indicates that something will assist or strengthen while resistance indicates rejection. In Technical Analysis, support means a level that is below the price, and resistance is above price.

The image above shows resistance as a red band and support as a green band. It’s important to understand that support and resistance on a candlestick chart should never be viewed as a static and exact price level. With a chart style that has such dynamic time and price levels, like Japanese candlesticks, support and resistance are an area or range of value. Determining the support and resistance levels requires a ‘zoomed’ out view of the chart. When you get a broader view of the past price action, you can see price levels where price has moved lower and then reversed higher (support) as well as price levels where price move higher and then reversed lower (resistance). The most important levels are those that show past resistance becoming support and vice-a-versa.

Prior Support turned into Future Resistance

Use another chart style to find support and resistance

Renko Chart

While it may seem simple to find support and resistance on a candlestick chart, there are some alternatives. The length of the wicks and body of candlesticks can vary and can add to the confusion. Using a Renko (above) chart simplifies the process of finding support and resistance by reducing the noise on the chart and providing less ambiguity when looking for highs and lows. Take note of how these resistance and support levels are drawn on a price-action-only chart. With a price action only chart, I don’t draw a value area like I would on a candlestick chart. But if you are not comfortable using a price-action-only chart and want to stick to a candlestick chart, then another trick that might help is to remove the wicks from the candlesticks. Look at the side by side comparison below.

Wicks VS No Wicks

Both charts display a weekly chart of the CADCHF pair. On the left, we have a regular candlestick chart with wicks – wicks that are all over the place. The chart on the right is the same as on the left, but with no wicks displayed. You can see how much more clear the tops and bottoms are on the right. This can make it a little easier to spot support and resistance levels.

** It is the view of this author that past support and resistance levels are inefficient for today’s markets. However, the method discussed in this article is part of a foundation of learning that can be applied to future price level analysis.

Tags action, Analysis, candlesticks, Chart, Forex, japanese, price, Price Action, priceaction, renko, Resistance, shadow, shadows, Support, Technical, wick, wicks

Forex Courses on Demand Forex Videos

Everything You Need To Know About Assessing The Forex Market – Qualitative VS Quantitative

Post author By Keiran
Post date 27 September, 2019
No Comments on Everything You Need To Know About Assessing The Forex Market – Qualitative VS Quantitative

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The following presentation is brought to you as a courtesy of forex Academy! This is part of our service courses on demand, if

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The following presentation is brought to you as a courtesy of forex Academy! This is part of our service courses on demand, if

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As we assess fundamental analysis on decision-making, we must look at quantitative versus qualitative data. Now considering the distinction between the two types of data, we typically define them by referring to data as quantitative, if it is numerical in form, and qualitative when the data has a more theoretical basis. Now, why is that the case? Well, qualitative data is more concerned with understanding human behaviour, from the informants perspective, and the informant is simply ourselves. As economic agents and traders, it assumes a dynamic and negotiated reality, so there’s a level of discretion to understanding. Our qualitative approach, in contrast, quantitative data, is concerned with discovering facts about social phenomena. It assumes a fixed and measurable reality; in other words, the fixed and measurable reality is the raw data, the numbers that we try to derive a social phenomena and extract thought from that.

With the methods data is collected through Participation, observation in interviews, Data are analysed by themes from descriptions by informants. Again that’s simply us and reported in the language of the informant.

In contrast their quantitative data, or collective, through measuring things. Data is analysed through numerical comparisons, statistical inferences, and data is reported through that statistical analysis. So we use with quantitative data, the raw data to formulate charts and graphs, to give us an overall picture statistically, and to look for social phenomena which obviously help trading decisions. Fundamental trading is considered to be more a qualitative approach! Qualitative research is multi-method in focus involving an interpretive naturalistic approach! This means qualitative researchers study things in their natural settings, attempting to make sense of or interpret phenomena in terms of the meanings. People bring to them research following a qualitative approaches, exploit exploratory, and seek to explain how and why a particular market is behaving. Therefore, fundamental traders often based their trade decisions on a question of value, what does that mean for our trade decisions? Well if research shows that an asset is undervalued, these traders will look for buying opportunities, if on the other hand, research suggests an asset is overvalued, these traders will look for selling opportunities.

Technical trading, on the other hand, is considered to be more a quantitative approach! Quantitative research collects data in numerical form, which is then subjected to statistical analysis. The data is then measured to construct graphs and charts, to physically represent patterns or ideas that provide statistical reasoning. As the research is used to test a theory, it aims to ultimately support or reject the hypothesis! So as this approach tests raw data, it can be applied to many different environments, and that’s a huge advantage to using this quantitative approach. Actually deriving reasoning from the raw data across many different fields, or industries data analysis, helps us turn statistical data into useful information to help with decision making. Therefore quantitative research is more focused on our objectivity, and that would certainly be the main reason why we would say quantitative approach or quantitative trading, it has more of an essence of technical trading. As technical traders, we want to become very objective, if we look towards our technical indicators, take Bollinger Bands as an example, it uses a statistical model across a variation from the mean. It follows price action to look for objective trading decisions as such. Technical trading is considered to be much more of a quantitative approach.

Tags Analysis, Forex, Fundamental, Technical

Crypto Market Analysis

Crypto Analysis -Negative Sentiment Persists

Post author By Forex Academy
Post date 11 September, 2018
No Comments on Crypto Analysis -Negative Sentiment Persists

Daily Update and Analysis
Bitcoin
Fundamental analysis
Bitcoin has been in a rough situation lately. With Goldman Sachs announcing that they are uncertain about Crypto trading desk, Russia still not

Daily Update and Analysis

Bitcoin

Fundamental analysis

Bitcoin has been in a rough situation lately. With Goldman Sachs announcing that they are uncertain about Crypto trading desk, Russia still not being ready to regulate Cryptos and news of mainly neutral or bearish sentiment, we can not expect the price to do the opposite either. On the non-news fundamental side, nothing has changed. However, this is not the only thing to look at. When looking at the sentiment, we are still bearish.

Technical analysis

With the resistance downtrending line moving sharply downwards, Bitcoin only has until 20th of November to make a decision. Everything is still inclined towards the downside, but some bullish news or a sudden spike in volume might change things up. However, that is highly unlikely at this point.

Ethereum

Fundamental analysis

Ethereum is going through a horrible period. Many news are reporting that Ethereum is a bad technology, and that it is highly overpriced. However, it is one of the rare Cryptocurrencies with real use case. Still, with no changed to its code, and bad news floating around (possible forks, negative analysis), we are still inclined to look at Ethereum from a bearish perspective, and would consider a short position in this Cryptocurrency.

Technical analysis

Ethereum has been in a sharp downtrend from the start of May. With only bearish fundamental news, and no changes in the general outlook on Ethereum, we expect more downwards moves. Volume has been steady, and ETH showed no will or courage to test the resistance line.

EOS

Fundamental analysis

EOS has been marketing the product as the Cryptocurrency to solve many modern world issues, such as environmental issues, world poverty etc. EOS has quite a good buzz around it in China as well as it has been pronounced as the highest rated Cryptocurrency based on idea, application, technology and innovation. However, the general market is still bearish so the rise in price did not happen as a result of the bullish news.

Technical analysis

EOS has shown some resilience, even in this market. With many Cryptocurrencies retesting their biggest support lines, EOS is ranging between 3 big support lines. However, it is not immune to the downtrend, and is highly correlated to the Bitcoin’s price.

Final word

The last week has been, apart from the slight downswing, pretty calm. Prices have not changed a lot, nor have fundamental news affected the price of Cryptocurrencies that deserved it (both upwards and downwards).

Tags Analysis, bitcoin, update

Crypto Market Analysis

Today´s Crypto Events 02.08.2018

Post author By Forex Academy
Post date 2 August, 2018
No Comments on Today´s Crypto Events 02.08.2018

Here you can find all the news about the upcoming hard fork, releases, exchange listings, updates, conferences, new launches, etc. We gather the most relevant events and conferences for you

Here you can find all the news about the upcoming hard fork, releases, exchange listings, updates, conferences, new launches, etc. We gather the most relevant events and conferences for you to pick from.

Today´s Crypto Events 02.08.2018

PinkCoin (PINK) — Poloniex Exchange Delisting
FlorinCoin (FLO) — Poloniex Exchange Delisting
FoldingCoin (FLDC) — Poloniex Exchange Delisting
Vcash (XVC) — Poloniex Exchange Delisting
Bitcrystals (BCY) — Poloniex Exchange Delisting
Nexium (NXC) — Poloniex Exchange Delisting
Radium (RADS) — Poloniex Exchange Delisting
BlackCoin (BLK) — Poloniex Exchange Delisting
Riecoin (RIC) — Poloniex Exchange Delisting
Unify (UNIFY) — New Logo and Marketplace V2 Beta Release
Bigbom (BBO) — Form for AMA Opens
Cardano (ADA) — Roadmap Update
NEO (NEO) — AMA on Reddit
NEM (XEM) — Blockchain Summit in Melbourne
Hydro (HYDRO) — Fintech Week in New York
SophiaTX (SPHTX) — AMA with CEO
IOTA (MIOTA) — Meetup in New York
Qtum (QTUM) — Meetup in Berlin

Tags Analysis, bitcoin, calendar, Crypto Trading, cryptocurrencies, cryptocurrency

Crypto Market Analysis

Today´s Crypto Events 01.08.2018

Post author By Forex Academy
Post date 1 August, 2018
No Comments on Today´s Crypto Events 01.08.2018

Today´s Crypto Events 01.08.2018

Graft (GRFT) — Supernode Alpha Release
Databits (DTB) — Augmentors Alpha Release
Pundi X (NPXS) — Meetup in Bogota
Steneum Coin (STN) — Referral Challenge Starts
Expanse (EXP) — Newsletter
TokenCard (TKN) — Q&A on Reddit
Golem (GNT) — AMA on Reddit
Asch (XAS) — Mainnet Upgrade
WaBi (WABI) — Q&A on Telegram
Odyssey (OCN) — Snapshot for Airdrop
Gifto (GTO) — AMA on Telegram
Veros (VRS) — Site Design Update
LoyalCoin (LYL) — Crypto Seminar
Titanium BAR (TBAR) — Private IaaS Beta Starts
Bitcoin Private (BTCP) — Community Update
Neblio (NEBL) — Hardfork for Testnet
Elastos (ELA) — Token Burning
Elastos (ELA) — Coin Release
PACcoin ($PAC) — PAClyfe Launch
TittieCoin (TTC) — Exrates Exchange Listing
Stratis (STRAT) — Breeze Privacy Protocol Mainnet Release
VeChain (VEN) — VTHO Airdrop to VET Holders on Binance
Ruff (RUFF) — Meetup in Seoul

Tags Analysis, bitcoin, calendar, cryptocurrencies, cryptocurrency

Crypto Market Analysis

Today´s Crypto Events 30.07.2018

Post author By Forex Academy
Post date 30 July, 2018
No Comments on Today´s Crypto Events 30.07.2018

Here you can find all the news about the upcoming hard fork, releases, exchange listings, updates, conferences, new launches, etc. We gather the most relevant events and conferences for you

Today´s Crypto Events 30.07.2018

BitBay (BAY) — Web Marketplace Beta Version
FuzeX (FXT) — CoinBene Exchange Listing
0x (ZRX) — CoinX Exchange Listing
OriginTrail (TRAC) — AMA on YouTube
Triggers (TRIG) — AMA Session
SureRemit (RMT) — SureRemit App Launch
Level Up Coin (LUC) — Сlosed Alpha Testnet
ClearPoll (POLL) — New Side Project Announcement
Refereum (RFR) — Bibox Exchange Listing
Delphy (DPY) — Snapshot for Monthly Airdrop
Dock (DOCK) — Binance Exchange Listing
Everus (EVR) — Peer-to-Peer Microfinancing
TRON (TRX) — Virtual Machine Testnet Launch
Metal (MTL) — Crumbs App Soft Launch
Linker Coin (LNC) — Token Burning
Everus (EVR) — Multi Currency Payment Gateway Launch
LBRY Credits (LBC) — Live-Video Contest
LockTrip (LOC) — Integration of a Middle Layer App

Tags Analysis, bitcoin, calendar, crypto market, Crypto Trading

Crypto Market Analysis

Today´s Crypto Events 26.07.2018

Post author By Forex Academy
Post date 27 July, 2018
No Comments on Today´s Crypto Events 26.07.2018

Today´s Crypto Events 26.07.2018

Hydrogen (HYDRO) — Trading Competition on BitMart Ends
NEM (XEM) — Meetup in Lima
Credits (CS) — Satoshi United Conference in Singapore
Holo (HOT) — OPEN 2018 in London
LOCIcoin (LOCI) — Blockchain Conference in Washington
United Traders Token (UTT) — Satoshi United Conference in Singapore
POA Network (POA) — On-Chain Governance Meetup in Berlin
Ivy (IVY) — AMA on Facebook
Devery (EVE) — AMA on Reddit
Lympo (LYM) — App Development Update
STK (STK) — AMA on Reddit
Zilliqa (ZIL) — Ethfinex Exchange Listing
Bancor (BNT) — Ethfinex Exchange Listing
WePower (WPR) — Ethfinex Exchange Listing
Elastos (ELA) — Virtual Meetup
Ink Protocol (XNK) — Livestream AMA on YouTube

Tags Analysis, calendar, crypto analysis, cryptocurrency

Crypto Market Analysis

Today´s Crypto Events 27.07.2018

Post author By Forex Academy
Post date 27 July, 2018
No Comments on Today´s Crypto Events 27.07.2018

Today´s Crypto Events 27.07.2018

ZenCash (ZEN) — Mandatory Upgrade Deadline
EOS (EOS) — EOS Russia Meetup in Moscow
Veritaseum (VERI) — Blockchain Conference in Washington
PolicyPal Network (PAL) — Bluepaper Launch
Aeternity (AE) — AMA Session
EagleCoin (EAGLE) — Mainnet Release
XinFin Network (XDCE) — Singapore Blockchain Conference
Bitcoin (BTC) — CME Bitcoin Futures Last Trade Date
Bankex (BKX) — MovieCoin Bounty Program
Nebula AI (NBAI) — AMA Session

Tags Analysis, bitcoin, calendar, Crypto, Technical Analysis

Crypto Market Analysis

Today´s Crypto Events 25.07.2018

Post author By Forex Academy
Post date 25 July, 2018
No Comments on Today´s Crypto Events 25.07.2018

Today´s Crypto Events 25.07.2018

POA Network (POA) — Las Vegas Government Blockchain Group – Speaker Series
Maecenas (ART) — Fine Art Blockchain Auction Beta Launch
Syscoin (SYS) — AiBB Token Pre Sale
NEM (XEM) — Meetup in Cali
Creativecoin (CREA) — Weeklys Challenge
Cindicator (CND) — Meetup in Berlin
SophiaTX (SPHTX) — Mainnet Launch
LoyalCoin (LYL) — Crypto Seminar in Mandaluyong
Decentraland (MANA) — NIFTY Conference and Hackathon in Hong Kong
0x (ZRX) — NIFTY Conference and Hackathon in Hong Kong
Digix Gold Token (DGX) — NIFTY Conference and Hackathon in Hong Kong
Ethereum (ETH) — NIFTY Conference and Hackathon in Hong Kong
Trinity (TTY) — NIFTY Conference and Hackathon in Hong Kong
BitShares (BTS) — Indodax Exchange Listing
Dash (DASH) — Indodax Exchange Listing
NEM (XEM) — Indodax Exchange Listing
Dogecoin (DOGE) — Indodax Exchange Listing
Silent Notary (SNTR) — CryptalDash Exchange Listing
ZenCash (ZEN) — Livestream on YouTube
SwissBorg (CHSB) — Q&A on YouTube and Facebook
Ark (ARK) — CoinBene Exchange Listing
Nexty (NTY) — CoinBene Exchange Listing
Pundi X (NPXS) — Meetup in Geneva
Bitcoin Private (BTCP) — Public Development Meetings on Discord
Switcheo (SWTH) — Exchange V2 Launch
Polymath (POLY) — Blockchain Society Conference in Toronto

Tags Analysis, bitcoin, calendar, Trade Idea

Crypto Market Analysis

Today´s Crypto Events 24.07.2018

Post author By Forex Academy
Post date 25 July, 2018
No Comments on Today´s Crypto Events 24.07.2018

Today´s Crypto Events 24.07.2018

TokenCard (TKN) — Blockchain Meetup in London
WandX (WAND) — Airdrop Starts
Waves (WAVES) — DEX and Wallet Release
DATA Streamr DATAcoin (DATA) — AMA on YouTube
Fitrova (FRV) — Fitness Tracker App Alpha Release
EOS (EOS) — Bitpanda Exchange Listing
SwissBorg (CHSB) — Q&A on Reddit
Banca (BANCA) — CoinTong Exchange Listing
Electroneum (ETN) — CoinBene Exchange Listing
aelf (ELF) — AMA on Telegram
RLC iExec RLC (RLC) — Workerdrop 2
Holo (HOT) — Binance Exchange Listing
Soarcoin (SOAR) — Soar Cryptocurrency Exchange Launch
Civic (CVC) — AMA on Telegram
CPChain (CPC) — KuCoin Exchange Listing
IOTA (MIOTA) — DAHO.AM Conference in Munich

Tags Analysis, bitcoin, calendar, crypto analysis, Trade Idea

Crypto Market Analysis

Daily crypto update 23.07.2018 – Sideway movements

Post author By Forex Academy
Post date 23 July, 2018
No Comments on Daily crypto update 23.07.2018 – Sideway movements

The market is shown today mainly negative with 65% of the top 100 of the cryptos in red, some of them with two digits losses such as Bitcoin Diamond and Ardor. However, the BTC has been supported by good news about the ETF and also by the possible BlackRock investment in the currency and has left its lateralized momentum and it’s generating a positive market sentiment. The market capitalization compared to the previous Monday raised 19 Billion.

General overview

Market Cap: $286.644.683.222

24h Vol: $14.487.725.028

BTC Dominance: 46.1%

Top 100 Gainers of the day

Holo HOT 49,37%
Electroneum ETN 17,55%
GXChain GXS 9,12%
Dropil DROP 8,31%
Bitcoin Gold BTG 7,49%

Top 100 Losers of the day

Bitcoin Diamond BCD -37,07%
Ardor ARDR -11,36%
Power Ledger POWR -9,73%
PIVX PIVX -7,73%
TenX PAY -6,92%

News

Encrypted Email Provider ProtonMail Could be Planning an ICO
Cryptocurrency-friendly encrypted email provider ProtonMail appears to be planning an initial coin offering (ICO), a job posting has revealed. The Swiss firm, founded in 2014 by CERN researchers, has long supported cryptocurrency payments for its premium email and VPN services. Now, the company is hiring a blockchain developer for a project that may see the firm launch its own cryptocurrency.
Source: ccn.com

Chinese City Starts a $1.5 Billion Fund to Promote Public Blockchain Projects
Nanjing, Jiangsu’s capital, is committed to investing in public blockchain projects and overall token economy. The capital of this Chinese province put together a 10 billion yuan ($1.5 billion) fund in a blockchain investment fund.
A Beijing-based alliance, Zhongguancun Blockchain Industry Alliance, is teaming up with Nanjing City to launch this blockchain investment fund of $1.5 billion. The alliance, formed by government research institutes and blockchain companies, revealed the bold initiative at the first Industrial Public Chain Summit (IPCS). Among the high-level government official attendees, there was the Deputy Secretary of the Communist Party of China, Luo Qun.
Source: ccn.com

Cryptocurrency Fraud Now Second Most Common Investment Scam in Australia: Watchdog
Australia’s national consumer watchdog has warned that cryptocurrency trading scams have grown ‘significantly’ over a 12-month period and are now the second most-common kind of investment scam in the country.
An independent government authority tasked with the mandate of enforcing consumer protection laws with oversight into scam-related trends in Australia, the Australian Competition and Consumer Commission (ACCC)has a scam-alert domain dubbed ‘Scamwatch’.
Source: ccn.com

Analysis

EOS/USD

EOS is currently trading over the 100 EMA at $ 8.06 this EMA is offering immediate support to the price that has been moving in range during the weekend; if buyers pressure appears during the session and the price can cross this EMA, there is still a strong support at the central pivot point at $ 7.92.

Market sentiment

4-H chart technicals signal a Bearish sentiment.

Oscillators are showing mixed signals on the overbought zone.

Pivot points

R3 8.69
R2 8.46
R1 8.14
PP 7.92
S1 7.61
S2 7.38
S3 7.06

ETH/USD

ETH/USD is now moving below the EMA 100 in this 4h chart at $ 462.10 the price is moving in a narrow range since Saturday and it seems it will continue in the upcoming hours.

Market sentiment

4-H chart technicals signal a Bullish sentiment.

Oscillators are in the overbought zone and pointing down.

Pivot points

R3 485.30
R2 478.65
R1 468.11
PP 461.46
S1 450.92
S2 444.27
S3 433.73

ADA/USD

Cardano reports today a negative -2.86% in the last 24 H, the price has bounced in the Pivot R1 and now is testing the central pivot point around $ 0.1701 if this level is crossed, we could see an extended movement towards the pivot S1 at $ 0.1604.

Market sentiment

4-H chart technicals signal a Bearish sentiment.

Oscillators are in the overbought zone, showing sell signals and pointing down.

Pivot points

R3 0.1974
R2 0.1886
R1 0.1789
PP 0.1702
S1 0.1604
S2 0.1517
S3 0.1419

Conclusion

There is not a clear trend movement to consider right now, the market is moving mainly sideways in most of the pairs.

Tags ada, Analysis, bitcoin, crypto analysis, Crypto Trading, cryptocurrencies, EOS, ETH

Crypto Market Analysis

Daily crypto update 18.07.2018 – Consolidation, and then?

Post author By Forex Academy
Post date 18 July, 2018
No Comments on Daily crypto update 18.07.2018 – Consolidation, and then?

The market continues to consolidate winnings while the TOP-10 currencies are all in green. Stellar has won 21.43% and Cardano 20.89% in the last 24-H and the others are also showing representative positive growing.

General overview

Market Cap: $295.984.421.039

24h Vol: $21.222.164.259

BTC Dominance: 43.1%

Top 100 Gainers of the day

Bitcoin Diamond BCD 48,22%
Ardor ARDR 35,81%
Dogecoin DOGE 25,78%
aelf ELF 23,15%
Stellar XLM 21,43%

Top 100 Losers of the day

TenX PAY -8,04%
Pundi NPXS -1,54%
Dropil DROP -0,77%
Tether USDT -0,42%
Huobi Token HT -0,24%

News

Coinbase Walks Back Claim That SEC Approved Trio of Acquisitions
Cryptocurrency exchange and brokerage giant Coinbase has walked back a claim that it had received explicit approval from the U.S. Securities and Exchange Commission (SEC) to acquire three companies as part of its future plans to list cryptocurrencies that are deemed securities under federal regulations.
Source: ccn.com

Mastercard Wins a Patent to Link Cryptocurrency With Fiat Accounts
Mastercard has been granted a patent that grants it rights for a method for “managing fractional reserves of blockchain currency.”With Mastercard’s latest patent, we’re getting closer to using our cryptocurrency credit cards to purchase goods. According to the filing, the method addresses the storing of both fiat and cryptocurrencies under one profile. This means, as a user, you’d have two linked accounts with your bank — one for your fiat wealth, and one for crypto.
Source: ccn.com

Bitcoin Mining Giant Bitmain is Tripling its Development Center in Israel
Bitmain, the Chinese bitcoin mining giant valued at $12 billion, is cementing its presence in Israel by planning to triple its employees at its domestic development center.In an aggressive expansion of its research and development center in Ra’anana, a city in western Israel, Bitmain is looking to recruit over 40 employees to add its current 15 employees situated in the country, Israeli publication Globes reports.
Source: ccn.com

Analysis

XRP/USD

The price of Ripple is currently trading at $0.5163 and took as support the $ 0.50, the principal and immediate resistance is the Pivot R1 at $ 0.5288. If the price manages to cross this level, we could see the price looking for $0.5444.

Market sentiment

4-H chart technicals signal a Bullish sentiment.

Oscillators are in the overbought zone and pointing down.

Pivot points

R3 0.5790
R2 0.5494
R1 0.5282
PP 0.4986
S1 0.4774
S2 0.4478
S3 0.4266

LTC/USD

Litecoin price has won 4.3% in the last 24 H after finding a strong resistance in the Pivot R1 at $92.19. As we stated yesterday in our daily report, the price could keep the level of $ 85.0 and crossed the $ 90.0 level were is sitting now. If the buyers can put pressure in the upcoming hours it is possible to see another move to the upside in the pair.

Market sentiment

4-H chart technicals signal a Bullish sentiment.

Oscillators are in the overbought zone and pointing down.

Pivot points

R3 100.8426
R2 95.4551
R1 92.2401
PP 86.8526
S1 83.6376
S2 78.2500
S3 75.0350

ADA/USD

Cardano is extending its gains and today reports a positive 14.69% in the last 24 H, the price is trying to go for the $ 0.20 during the day with no success as the pivot R2 at $ 0.1961 seems to have stopped the impulse; if the price cant cross this resistance level, the fib retracement of 23.6% could be the support to rest.

Market sentiment

4-H chart technicals signal a Bullish sentiment.

Oscillators are in the overbought zone, showing buy signals and pointing down.

Pivot Points

R3 0.2133
R2 0.1961
R1 0.1839
PP 0.1669
S1 0.1544
S2 0.1374
S3 0.1250

Conclusion

This is not the first time the market performs a rise like the one we have seen on Monday and Tuesday, we could not expect a different thing than waiting for a consolidation and then a retracement to retake the trend. Will be different this time? It is too early to say it, in my opinion, 50% retracement could be expected in the short term before another spike.

Tags Analysis, bitcoin, Crypto Trading, cryptocurrency, Ethereum, Technical Analysis

Crypto Market Analysis

Today´s Crypto Events 18.07.2018

Post author By Forex Academy
Post date 18 July, 2018
No Comments on Today´s Crypto Events 18.07.2018

Today´s Crypto Events 18.07.2018

Apex (CPX) — Snapshot for KRATOS One Reward
Cardano (ADA) — Meetup in Rotterdam
WaBi (WABI) — Q&A Session
ClearPoll (POLL) — ClearPoll Beta on Android Release
Pundi X (NPXS) — Meetup in Istanbul
Time New Bank (TNB) — BIMG Summit in Hong Kong
WAX (WAX) — Comic-Con International: San Diego
Bitcoin (BTC) — Cboe XBT Expiration Date
Adelphoi (ADL) — Blockchain and Bitcoin Conference in Paris
BitBay (BAY) — Cryptocurrency World Expo Summit in Warsaw

Tags Analysis, bitcoin, crypto analysis, crypto update, Events

Crypto Market Analysis

Today´s Crypto Events 17.07.2018

Post author By Forex Academy
Post date 17 July, 2018
No Comments on Today´s Crypto Events 17.07.2018

Today´s Crypto Events 17.07.2018

Maecenas (ART) — Art+Tech Summit in London
Trade Token (TIO) — Exchange Launch
WAX (WAX) — Beyond Blocks Summit in Seoul
Red Pulse (RPX) — Beyond Blocks Summit Seoul 2018
aelf (ELF) — Beyond Blocks Summit in Seoul
OAX (OAX) — Airdrop Starts
ICOS (ICOS) — Swap
Chronologic (DAY) — LiveStream
BTW Bitcoin White (BTW) — DAO Module Launch

Tags Analysis, crypto analysis, cryptocurrencies, Events

Crypto Market Analysis

Daily Crypto Update 10.07.2018 – Pronounced Sales

Post author By Forex Academy
Post date 10 July, 2018
No Comments on Daily Crypto Update 10.07.2018 – Pronounced Sales

As we wrote yesterday in the Market Update, the pronounced sales started all around the charts, the market lost 8 billion in capitalization and we expect a negative week in most of the cryptos, only 4 coins of the top 100 are in positive today: Kucoin Shares, Bitcoin Diamond, Bitcoin Gold and Tezos; the others have losses of up to two digits being Walton chain with -17.2% the top loser in the last 24-H.

General Overview

Market Cap: $254.246.070.665

24h Vol: $14.234.158.046

BTC Dominance: 43.2%

Top 100 Gainers of the day

Matryx MTX 72.92%
Hurify HUR 39.98%
TokenDesk TDS 38.21%
United Traders Token UTT 29.67%
United Bitcoin UBTC 27.48%

Top 100 Losers of the day

Thrive Token THRT -35.93%
SalPay SAL -35.75%
DAEX DAX -32.44%
Transcodium TNS -31.35%
EJOY EJOY -28.71%

News

FCoin Manipulation Of Ethereum Network Spurs Threat Of Legal Action
Activity on the Ethereum network spiked at the end of last week causing transaction fees to hit all-time highs and now fingers are pointing to an obscure Chinese trading platform called FCoin. Accusations are being made against founder Zhang Jian, formerly of Huobi, of orchestrating a series of Sybil attacks in order to drive up traffic, crippling the Ethereum Network and gaining publicity for itself.
Source: newsbtc.com

Study Finds That Over Half Of ICOs Die In First Four Months
A new study out of Boston University has found that at over half of crypto startups that complete fundraising through an ICO is dead within four months of their coin launch.
As the ICO has become the preferred method for emerging tech companies to raise funding the space. Is has become overpopulated with coins that are never going to make it to an exchange. The first ICO was launched only 5 years ago, but most probably never heard the term until 2017, when the strategy took off along with the rising price of cryptocurrency.
Source: newsbtc.com

Decentralized Exchange Bancor Falls Victim To $24 Million Security Breach
A popular decentralized exchange platform, Bancor, recently took to Twitter to announce that the platform fell victim to a security breach, giving further details about the apparent hack.
On July 9th at 8 AM (UTC), Bancor released a Tweet noting that its web service would be closed down for maintenance. This announcement, which came out of nowhere, got some users worried, as they wondered what had occurred.
Source: newsbtc.com

Analysis

LTC/USD

LTC/USD as with the other cryptos is under heavy pressure, Litecoin has lost -7.54% in the last 24-H and -12.2% in 2 days; as the currency correlates with the BTC, further losses are expected this week.

Earlier, Litecoin touched $74.40 and now is moving around $75.80 trying to cross the Pivot S3 upwards, probably the price will bounce here and will make a movement towards $73.00.

Market sentiment

4-H chart technicals signal a strongly bearish sentiment.

Oscillators are showing sell signals and pointing down.

Pivot points

NEO/USD

NEO has crossed below the 100 EMA and the Pivots S1 and S2 in this 4H chart showing the buying pressure is here.
The price touched $32.82 this morning and now is trying to retrace a little but the market has turned even more bearish in the last hours.

NEO has dropped -11.40% in the last 24H and if the Pivot S2 can’t be crossed upwards, the price could possibly visit $32.13 in the short term.

Market sentiment

4-H chart technicals signal a Bullish sentiment.

Oscillators are showing buy signals and pointing up.

Pivot points

R3 41.38
R2 40.32
R1 38.29
PP 37.23
S1 35.21
S2 34.19
S3 32.13

EOS/USD

EOS continues the big drop initiated yesterday from $8.62 and is now sitting in the $7.24 area, trying to find support in the Pivot S1. The indicators are in the oversold zone but nothing seems to stop the drop.

Market sentiment

4-H chart technicals signal a Strongly Bullish sentiment.

Oscillators are showing sell signals and pointing down.

Pivot points

R3 9.76
R2 9.25
R1 8.46
PP 7.95
S1 7.16
S2 6.64
S3 5.85

Conclusion

The bears remain in control of the market and it will most likely continue as well because pronounced sales continue. BTC is dragging most of the alt coins decidedly.

Tags Analysis, Crypto Trading, crypto update, Market update, Technical Analysis

Crypto Market Analysis

Today´s Crypto Events 09.07.2018

Post author By Forex Academy
Post date 9 July, 2018
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Today´s Crypto Events 09.07.2018

LBRY Credits (LBC) — Hard Fork
Rialto (XRL) — Trading Bot Launch
Havven (HAV) — Hack Summit Sponsorship
Wanchain (WAN) — Hack Summit Sponsorship
Stellar (XLM) — Hack Summit
Monero (XMR) — Hack Summit
Bancor (BNT) — Hack Summit
Zcash (ZEC) — Hack Summit
VeChain (VEN) — VeChainThor Mobile Wallet and X-Node Binding Service Launch
Monaco (MCO) — Pub Summit in Hong Kong
Nano (NANO) — Weekly Development Update
Effect.AI (EFX) — RISE Conference in Hong Kong
Augur (REP) — Mainnet Deployment and REP Migration
ClearPoll (POLL) — Website Pre-Launch
IHT Real Estate Protocol (IHT) — Allbit Exchange Listing
Bankex (BKX) — AMA on Facebook
Shopin (SHOP) — Token Swap
LALA World (LALA) — Wallet Launch
EOS (EOS) — London Fintech Week
Silent Notary (SNTR) — New Website Release
Universa (UTNP) — Innoprom 2018 in Ekaterinburg

Tags Analysis, bitcoin ripple ethereum daily crypto, calendar, Crypto, cryptocurrencies

Crypto Market Analysis

Daily Crypto Update 27.06.2018

Post author By Forex Academy
Post date 27 June, 2018
No Comments on Daily Crypto Update 27.06.2018

The Crypto Market starts the second day in red this week with only 5 of the top ten cryptos in positive, QTUM, Bitcoin Diamond, Cortex, Emercoin and Monaco. There is no concrete explanation of what is happening with the market and Bitcoin is trading around $6,170 at the moment of this publication, losing -2.58% over the last 24-hours

General Overview

Market Cap: $243.263.694.472

24h Vol: $10.798.007.593

BTC Dominance: 42.7%

There is a bearish dominance all around the charts but with low volume. The market has lost 8 Billion in just 1 day, what is showing is a dark perspective for the coming session.

News

Interest in Bitcoin Set to Double in Europe, New Survey Suggests
People hear and know more about cryptocurrencies with every passing day, and according to a new survey, interest in Bitcoin is expected to increase twofold in Europe.

Crypto Exchange Resumes Trading in India Despite Problems with Banks and RBI
Cryptocurrency exchange Belfrics has resumed trading operations in India after halting earlier this year due to banks refusing to provide payments solutions to the exchange.

Meet Three More Applications That Utilize Bitcoin Cash OP_Codes
Over the past month or so since the most recent Bitcoin Cash (BCH) network upgrade, a lot of developers have created platforms and extensions that utilise the re-enabled Satoshi OP_Codes.

If You Can’t Beat Them, Join Them – Bitcoin Is Hiring Regulators
While everyone is looking for an indication that institutional money is about to flood into bitcoin and revive the market, we just got another confirmation that crypto has indeed entered the big leagues.

Source: news.bitcoin.com

Analysis

Bitcoin is trading around $6,170 at the moment of this publication, losing -2.58% over the last 24-hours. The pair easily crossed the central pivot point in this 1H chart and is now again dangerously close to the $ 6000 level; if this level is crossed the pair could be looking again for the yearly minimums around $ 5.781

Market sentiment

1-H chart technicals signal a Strongly Bearish sentiment.

Oscillators are showing sell signals and pointing down.

Pivot points

LTC/USD

Litecoin price has lost -7.54% in the last 24H and is now moving around $75.56 and again, in two days, very close to the year low around $73.62. This price can be the support to beat for the bears and if a breakout happens here the drop can easily move the price to $65.

Market sentiment

4-H chart technicals signal a Strongly Bearish sentiment.

Oscillators are showing sell signals and pointing down.

Pivot points

R3 87.5511
R2 85.0221
R1 80.4131
PP 77.8841
S1 73.2751
S2 70.7460
S3 66.1371

XRP/USD

XRP has lost -5.05% in the last 24h and like many of the cryptos in the market, it has been bearish during the last session. The pair was stuck in the bearish descending line for several hours and then bounced from there to cross the central pivot point and now is sitting around $0.45.

Market sentiment

4-H chart technicals signal a Strongly Bearish sentiment.

Oscillators are showing sell signals and pointing down.

Pivot points

R3 0.5039
R2 0.4931
R1 0.4728
PP 0.4620
S1 0.4417
S2 0.4309
S3 0.4106

Conclusion

The bears are definitively driving the market and we must be prepared for further drops in the short time, the corrections were not strong enough and the buyers are just spectators waiting for an opportunity.

Tags Analysis, Crypto Trading, cryptocurrencies, Technical Analysis

Crypto Market Analysis

Today´s Crypto Events 26.6.2018

Post author By Forex Academy
Post date 26 June, 2018
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This is the Cryptocurrency events calendar. All the news about the upcoming hard fork, releases, exchange listings, updates, conferences, new launches, etc.

Today´s Events 26/6/2018

Playkey (PKT) — Blockchain Summit in London

Storiqa (STQ) — Lunch Fireside Chat Seminar in Bangkok

Huobi Token (HT) — Huobi Europe Quant Trade Summit in Amsterdam

Phore (PHR) — Blockchain Summit in London

TRON (TRX) — Super Representative Election – Tradesatoshi Exchange Listing

Zoin (ZOI) — New Roadmap Release

Stipend (SPD) — IDAX Exchange Listing

Genaro Network (GNX) — Blockchain Connect Conference in San Jose

Zcash (ZEC) — Hard Fork

Odyssey (OCN) — TRON Super Representative Election

Civic (CVC) — Blockchain Connect Conference in San Jose

Qtum (QTUM) — Blockchain Connect Conference in San Jose

Storj (STORJ) — Blockchain Connect Conference in San Jose

Ripple (XRP) — Blockchain Connect Conference in San Jose

QuarkChain (QKC) — Blockchain Connect Conference in San Jose

Huobi Token (HT) — Blockchain Connect Conference in San Jose

U Network (UUU) — Blockchain Connect Conference in San Jose

aelf (ELF) — Blockchain Connect Conference in San Jose

THEKEY (TKY) — Blockchain Connect Conference in San Jose

ICON (ICX) — Blockchain Connect Conference in San Jose

ZClassic (ZCL) — Partnership Announcement

Pillar (PLR) — Blockchain Summit in London

Lisk (LSK) — Meetup in Amsterdam

Cardano (ADA) — Japan Blockchain Conference in Tokyo

SIRIN LABS Token (SRN) — Japan Blockchain Conference in Tokyo

Centrality (CENNZ) — Japan Blockchain Conference in Tokyo

Tokenomy (TEN) — Trading Competition on Coindelta Ends

ZenCash (ZEN) — Hard Fork

BitClave (CAT) — Blockchain Summit in London

MyWish (WISH) — Blockchain Summit in London

Zcash (ZEC) — Coindelta Supports ZEC Blockchain Upgrade

Endor Protocol EDR – Japan Blockchain Conference in Tokyo

EZT EZToken (EZT) — Loyalty Program

Rise (RISE) — RightBTC Exchange Listing

Tags Analysis, bitcoin, crypto analysis, cryptocurrency

Crypto Market Analysis

Daily Crypto Update 25.06.2018 – Back In The Green?

Post author By Forex Academy
Post date 25 June, 2018
No Comments on Daily Crypto Update 25.06.2018 – Back In The Green?

The market returned to green numbers today after having touched the minimum of the year in many of the cryptos, due to the heavy drops suffered all around the crypto charts. Also, BTC prices went down to year lows, what was the trigger to drag the other cryptos down? 90 coins of the top 100 are in the green today, some with two digits, which is a good indicator for today.

General Overview

Market Cap: $252.306.359.683

24h Vol: $16.578.084.967

BTC Dominance: 41.7%

The market has lost 9 billion$ in capitalization since last Friday but positive movements are expected today as the volume is slowly increasing. Last Friday in our market update we said this; ¨ … the market will have another bearish boost before Sunday where BTC could lose its $6000 value and very likely will test the $5,700¨. The price behaved as it was estimated although its minimum reached only $ 5,774 where it found support and buying pressure.

News

Japan Wants to Stop Cryptocurrency Criminal Activities With Credit Evaluation
This week, after disclosing its plans to crack down on anonymous cryptocurrencies Zcash, Dash, and Monero, the government of Japan has said that major credit agencies will evaluate cryptocurrency users to prevent the utilisation of digital assets in laundering money generated from illicit operations.

Fiat Withdrawals Could Become ‘Impossible’, Warns Major Indian Cryptocurrency Exchange
As the date for India’s banking ban on the cryptocurrency sector approaches, Zebpay – one of India’s biggest exchanges – is proactively warning users that their fiat deposits could be affected.

Sun, Fun and Crypto – Bahamas’ Central Bank Set to Introduce a Digital Currency
The Bahamas has joined a small list of countries that are planning to experiment with central bank digital currencies
(CBCD).

Source: ccn.com

Jack Ma Goes for Blockchain, But Bitcoin Is “Still a Bubble”
The founder and chairman of a China’s giant Alibaba Group, one of the Chinas’ richest men, Jack Ma, has declared Bitcoin a bubble once again, just as his Ant Financial launched blockchain-based money transfers between Hong Kong and the Philippines today.

Crypto-Related Crime Might Be Top Cyberattack of 2018
According to a cybersecurity expert, crypto is where the real danger lies this year, as cyber attacks related to the nascent industry will surpass all other types.

Source: cryptonews.com

Analysis

ETH/USD

Ethereum has gained 5.42% in the last 24-H and is getting stronger while the session progresses. Ethereum buyers pushed back after the price tested $421 to send the price up to $468 where its now trading after crossing resistances of $450 and $460.

If buyers can reach $485, that would be an important level to support and then attack the $500 level. The RSI and Stochastic are pointing up and still not touching the overbought levels, there may still be a way to go upwards.

Market sentiment

4-H chart technicals signal a buy sentiment.

Oscillators are showing buy signals and pointing up.

Pivot points

R3 536.24
R2 506.78
R1 480.59
P 451.13
S1 424.95
S2 395.49
S3 369.30

LTC/USD

Litecoin price has gained 8.52% in the last 24H after touching year lows of $73.52 yesterday. The market was showing that it was going to happen and the buyers came strong sending the price over the central pivot point and now is trading at $83.64.

The price is testing the Fibonacci retracement of 38.2% but it has found strong resistance there, the next resistance is the Pivot R1 in $85.11.

Market sentiment

4-H chart technicals signal a buy sentiment.

Oscillators are showing buy signals and pointing up.

Pivot points

R3 95.34
R2 89.36 
R1 85.05 
P 79.1 
S1 74.76 
S2 68.92 
S3 64.47

BCH/USD

As like many of the cryptos, Bitcoin Cash started to recover from the hard drops over the whole week after finding support around $666. The bulls are now pushing the market, and the charts in many currencies seem very similar today.

The price is now trading at $759 in the middle of the central pivot point and R1, the indicators are showing mixed signals.

Market sentiment

4-H chart technicals show signal bullish.

Oscillators are showing mixed signals.

Pivot points

Conclusion

There is a new bullish scenario today. Price and technical indicators are showing some divergences and BTC is leading the route in the charts as always. If BTC breaks the immediate resistances, we could be inside a bullish momentum that could send the prices higher and buyers could take advantage of it.

Tags Analysis, btc. eth, Daily Reports

Crypto Market Analysis

Daily Crypto Update 20.06.2018 – Red Field

Post author By Forex Academy
Post date 20 June, 2018
No Comments on Daily Crypto Update 20.06.2018 – Red Field

The market today is again in red with 92 of the top 100 in the negative territory, brief bullish signals are not enough to put the currencies in green and

The market today is again in red with 92 of the top 100 in the negative territory, brief bullish signals are not enough to put the currencies in green and a successful attack on South Korea’s largest crypto exchange Bithumb can send the prices down again during this week.

General Overview

Market Cap: $283.698.523.519

24h Vol: $12.865.375.764

BTC Dominance: 40.0%

Cryptocurrency Market News

3 Hacks in 12 Months: The Reasons Behind Crypto Exchange Bithumb’s Failings
South Korea’s biggest cryptocurrency exchange Bithumb, which has been the most trusted digital asset trading platform within the country alongside UPbit, Coinone, and Korbit over the past few years, has been hacked for the third time in 12 months.

Australia’s Tax Office is Using a ‘100-Point’ Check System to Chase Crypto Traders
The Australian Tax Office (ATO) has cast a wide net to investigate crypto investors after classifying cryptocurrencies like bitcoin as ‘assets’, liable for capital gains taxes.

Siacoin Mining Malware Generates Nearly $1 Million in China-based Attack, 16 Arrested
Cryptjacking is fast becoming a popular way for cyber crooks to make money. For instance, around 5% of the cryptocurrency Monero currently in circulation is estimated to have been mined fraudulently, according to security firm Palo Alto Networks.

Retail Adoption of Crypto Would “Bring the Internet to a Halt” – BIS Report
The Bank of International Settlements (BIS) has leased a chapter from its forthcoming annual report that delivers a critical appraisal of bitcoin and cryptocurrency.

Source: ccn.com

Analysis

IOTA/USD

IOTA is trading positive in the last hours, very close to the critical price of $ 1.00 and has not been affected by the Bithumb hack that is considered as a bearish factor.

The next resistance for the pair is $1.21 and then $1.35 and $1.38 (R1 Pivot). On the downside, supports are in $1.00 S1 Pivot and psychological level, a breakout here could send the price to $0.94.

Market sentiment

4-H chart technicals signal a sell sentiment.

Oscillators are showing buy signals and pointing up.

Pivot points

R3 1.72
R2 1.59
R1 1.38
P 1.25
S1 1.03
S2 0.90
S3 0.69

ADA/USD

ADA has lost 1.17% in the last 24 hours and continues to move within a narrow range in the last six days, the support at $0.1567 is still tested but the rebounds are permanent, the EMA-50 is still approaching the support and it is very likely that the price will break down.

Market sentiment

4-Hourly chart technicals signal neutral.

Pivot points

XRP/USD

XRP has lost 0.55% in the last 24 hours and has not been able to move above the resistance at $0.5620, and the EMA-50 is also bouncing the price in the absence of strong buyers.

Market sentiment

4-Hourly chart technicals signal neutral.
Oscillators are pointing up.

Pivot points

Conclusion

Cryptocurrency Market News: The market is in a complete red dot today, the buyers are absent and nervous because they do not want to involve themselves in risks facing the possibility of new drops, I think the market will continue like this for the rest of the week without many bullish movements and in the control of the sellers.

Tags ada, Analysis, crypto update, iota, resume, USD; XRP

Crypto Market Analysis

Daily Crypto Update 15.06.2018 – Positive Signs

Post author By Forex Academy
Post date 15 June, 2018
No Comments on Daily Crypto Update 15.06.2018 – Positive Signs

As the market is in green again and we are waiting for further positive movements because many of the cryptos are gaining upside momentum, we will see if this weekend

As the market is in green again and we are waiting for further positive movements because many of the cryptos are gaining upside momentum, we will see if this weekend does not surprise us like the last weekend and the market can sustain itself this way. Although the trend has not been reversed so we have to be careful.

General Overview

Cryptocurrencies: 1629
Market Cap: $280.574.505.254
24h Vol: $15.343.266.248
BTC Dominance: 39.9%

Market capitalisation has moved up by 6 billion dollar which indicates the Capital is coming back after the hard current week.

News

Billionaire Investor Explains Why Bitcoin Price Will Hit $250,000 by 2022
Billionaire venture capitalist and investor Tim Draper has long been one of cryptocurrency’s biggest bulls, and that has not changed during the first half of 2018, even as bitcoin price has sunk more than 67 per cent from its all-time high.

Ripple Expects India to Overturn Cryptocurrency Ban with Regulations
Ripple is reportedly ‘unfazed’ by the Indian central bank’s mandate on restricting banks from dealing with cryptocurrencies and expects a new regulatory framework to rescind the ban altogether.

Crypto Market Rebounds as SEC Clarifies Bitcoin and Ethereum are Not Securities
The cryptocurrency market has rebounded from $271 billion to $291 billion, by more than $20 billion in the past 24 hours, as the US Securities and Exchange Commission (SEC) clarified that Bitcoin and Ethereum are not considered as securities under the laws of the US.

‘Netflix of Cryptocurrency Mining’ to Hold IPO on London Stock Exchange
A cryptocurrency mining startup is reportedly making a foray into becoming the first industry firm to be listed on the London Stock Exchange.

Why Africa Is Fertile Ground for Bitcoin Adoption
Despite fears and scepticism over usage of virtual currencies for crime, tax evasion, and money laundering, more African countries and individual investors are increasingly embracing cryptocurrencies to escape challenges to do with fiat money and to mop up extra value from informal markets that dominate the continent.

Analysis

XRP/USD

In the last hours, Ripple price found support in the 50-MA after bouncing in the 100-EMA when sellers appeared close to $0.56.

At the moment, the price is moving around $0.5439 and very close to the lower line of this ascending channel in this 1h chart, if the price continues moving inside the channel, we could see a further higher over the $0.5700 level in the short term.

Market sentiment

Ripple is moving in range during the last hours

RSI undecided and pointing down, Stochastic in oversold zone.

Pivot points

ETH/USD

After having taken a big jump from the support at $464, the price went up to $530, above the 100-EMA on this 4H chart and breaking the upper line of the channel.

Then the price declined to find support at $487 where buyers have pressed again today moving the price up to $503 where it is currently, more pressure is expected in the next few hours as the indicators are pointing up and even with a lot of ground in the field.

Market sentiment

ETH technicals are showing buy momentum

RSI pointing up, Stochastic is near to oversold levels

Pivot points

BCH/USD

BCH has lost 29% in just ten days, the way to recover won’t be that easy, now the price is moving around $871 with difficult to overcome the Fibonacci retracement of 23.6% of the last drop, I see a lot of strong resistance in this 4H chart such as $925 (R1 + 38.2% Fibbo) and $956 .

Market sentiment

BCH is showing neutral signs.

Pivot points

Tags Analysis, Chartist Analysis, Daily Reports

Crypto Market Analysis

Advanced Cryptomarket Analysis – Reversal Setup

Post author By Forex Academy
Post date 14 June, 2018
No Comments on Advanced Cryptomarket Analysis – Reversal Setup

For the purposes of this analysis, I will be using Ethereum. I imagine most reading will be familiar with TradingView but I will also be using a professional suite of trading software called Optuma.

One of the great factors in Gann’s Analysis – and the thing that diverges most from many other forms of technical analysis – is Gann’s focus on time being the factor for trends and price action. Everything is a slave to it. The news and human behaviour are not random nor does it create the conditions for changes in trends.

Time is the reason.

Square of 9 – Time and Price Squared

We are a little over a week away from the date of June 22nd, which is an important date and angle in Gann’s Square of 9. This is a normal date range to find reversals in trends. June 22nd, (summer) 93 days from March 21st, equal to 90 degrees, opposite of Dec 23rd.

Gann Square of 90

There are a few things to take away from this chart, first, what you are looking at is a more advanced and ‘oldschool’ form of technical analysis. The geometry you see on the screen is called a Gann Square of 90. The tool is often called a Gann Box, but a Gann Box can be used to construct a number of Gann’s square variants (Square of 144, Square of 12, Square of 24, etc).

Shared Fibonacci values

Price action has formed a base at two Fibonacci zones which are the same but from different swings. The shared Fibonacci ratio is the 0.786 level. The first is from the most recent swing from the dates of April 1st, 2017 to May 5th, 2018. The next Fibonacci ratio comes from the beginning of Ethereums’ breakout back on September 14th, 2017 to the all-time high on January 13th, 2018.

The Number 144

This is probably the most important item here. The number 144 is one of the most important in Gann’s work. The number 9 is also important, probably the most important number in Gann’s work. 1+4+4 = 9. Divisions and multiples of 144 equate to various price levels that are stopping points for trends. 144 x 3 = 432, which was (depending on data feed) near the lows of the day before buying stopped further downside pressure.
We are also within the 9 day period of the 144-day cycle. The 144-day cycle terminates trends.
Consider that the all-time high was around January 20th and 144 days from that date is near June 22nd.

Gann Planetary Line of Mars

For those unfamiliar with Gann’s style of analysis, then the operation and function of the longitudinal position of planets will seem even more foreign to you than the angles and squares. A quick explanation here is that Gann plotted the longitude coordinates of all the planets onto his charts and found that they were natural support and resistance for price. They were static. Fixed. Not subjective.
And, for whatever reason, some charts were more sensitive to some planets angles. For almost every cryptocurrency I’ve analysed (about 132), they all find sensitivity to the planetary angle of Mars and it’s harmonics (the divisions between the synodic cycle/angle). Price found support at an inner harmonic of Mars. The Green and Red ‘wavy’ lines represent the longitudinal position of Mars as viewed from here on Earth (geocentric).

Gann Planetary Lines Fan

Gann was never a fan of planetary lines, but we can convert the same formula he used for planetary lines and paint them onto a chart with the Gann Fan tool. From the most recent major swing, we plot out the planet Mercury – Mercury is a fast moving planet and the degrees of its fan create excellent short-term support and resistance areas.
Price stopped at the top of the ’45-degree’ line of Mercury.

Multiple Time Frame Oversold Conditions

Another strong indication of an impending reversal and bottom found is the oversold conditions on the daily, monthly and weekly charts. The indicators here are the Composite Index (above) and the Stochastic RSI (below).
Daily

Weekly

Monthly

Simple Pattern Forming

The simple pattern of an inverse Head And Shoulders pattern is being formed. There is also a normal Head And Shoulders pattern forming on the ETHUSDShorts chart from Bitfinex – indicating shorts are abandoning their positions to cover.
Inverse Head and Shoulders

Head and Shoulders of ETHUSDShorts

Volume

Using VPA (Volume Price Analysis) and VAP (Volume At Price) we can see a confluence zone formed here. On the VAP profile, there is a very nice and supportive high volume node that price is currently sitting at. Additionally, the price is trading within the highest 35% of the volume traded. The volume itself is heavy and supports the bullish hammer candlestick that was formed on the daily.

Gartley Harmonics

Without going into a lot of detail, Gartley patterns are either dynamic in their set value zones relative to their required Fibonacci levels or they are very static. An entire series could be written regarding Gartley’s harmonic patterns, but very quickly, we need to only know what Gartley has formed on this chart: Alternate Bullish Bat Pattern. This signals a reversal in price action.

Tags Analysis, Crypto, financial astrology

Crypto Market Analysis

Reversal has started

General overview

Market Cap: $409,364,645,716

24h Vol: $30,469,124,781

BTC Dominance: 37.3%

In the last 24 hours, the evaluation of market capitalization has dropped from 438B to 404B and has found support at those levels.

News

News that came out in the last 24 hours are mostly regarding governmental relation to cryptocurrencies. Some of the headlines are the following:

US: ICO Market Is Example Of Unregulated Securities Market, Says SEC Commissioner

US Securities and Exchange Commission (SEC) Commissioner Robert Jackson highlighted consumer protection regarding Initial Coin Offerings (ICO) in an interview on CNBC today, April 30.

Source: cointelegraph

Iran: Model Of State-Issued Digital Currency Now Ready, Says Gov’t Minister

An Iranian government minister has confirmed that an experimental model of a domestic digital currency is now ready, Reuters reported Saturday, April 28.

Source: cointelegraph

US Federal Trade Commission To Offer Free Workshop On Crypto Scams

The US Federal Trade Commission (FTC) will be holding a free workshop this summer titled “Decrypting Cryptocurrency Scams” according to a press release published today, April 30.

Source: cointelegraph

Saudi Arabian Communications Ministry Hosts ‘Blockchain Bootcamp’ With ConsenSys

The government of Saudi Arabia completed a “blockchain bootcamp” last week, the Ministry of Communications and Information Technology (MCIT) announced in a press release April 29.

Source: cointelegraph

Analysis

BTC/USD

Bitcoins price dropped from 9396$ to 8975$ which is 4,58% decrease from the yesterdays opening. Cryptocurrency daily chart shows us that the price has fallen below 0.5 Fibo level again and the 100 day EMA.

Looking at the hourly chart we can see the momentum behind the drop. The price has fallen below 100 and 50 EMA and is now looking for support.

Hourly chart signals a buy, but it’s more like neutral overall.

Pivot points

S3 1793.1
S2 5135.4
S1 7188.0
P 8477.7
R1 10530.3
R2 11820.0
R3 15162.3

ETH/USD

Ethereums’s price also dropped from the yesterdays opening, from 690$ to 658$ which is a 4,66% decrease. Cryptocurrency daily chart is showing the sign of struggle, as indicated by the wick. The price is above 1.616 Fibonacci level and 100 day EMA which is a good sign.

Zooming into the hourly chart we can see the wich being a drop to 632$ after the price quickly bounced back.

Hourly chart signal is leaning to the sell side.

Pivot points

S3 420.56
S2 541.36
S1 612.31
P 662.16
R1 733.11
R2 782.96
R3 903.76

XRP/USD

In the last 24 hours, the price of Ripple has fallen by 7% from 0.86$ to 0.8$ where it is now sitting.

Cryptocurrency daily chart looks bearish, as the price was clearly repelled by 100% Fibonacci level. The price hasn’t fallen below 100 EMA, it touched it and quickly bounced of it as seen from the wick.

Zooming into an hourly chart we can see that the price broke out of the upward channel in which it was from 25. of April, and is currently below 100 and 50 EMA.

Hourly chart signals a sell

Pivot points

S2 0.29625
S1 0.57893
P 0.77278
R1 1.05546
R2 1.24931
R3 1.72584

Conclusion

I have stated yesterday that if we see a close on the red candle, we are going to see a start of a trend reversal. This is what is happening now, and we can conclude that the downside movement has started.

©Forex.academy

Tags Analysis, bitcoin, Ethereum, Ripple

Crypto Market Analysis

Cryptocurrencies Market Cap Slightly Up From Its Lowest Point

Post author By Forex Academy
Post date 10 April, 2018
No Comments on Cryptocurrencies Market Cap Slightly Up From Its Lowest Point

General overview:

Cryptocurrency Market Cap: 265,511,000,000$

24h Vol: $9,014,760,000

BTC Dominance: 44.8%

Current Crypto Market Cap

In the last 24 hours crypto market cap has slightly risen from its lowest point at 259,285,000,000$ to its highest point at 267,789,00,000$ and has now pulled back to 265,511,000,000$ because of the resistance at these levels.

As we’ve recently bounced upward from a support around 250B which is where we were on November 25th last year, more sideways movement is expected.

News:

Some positive news came out in the last 24 hours which might change this sideways action to an upward trajectory.

As it turns out, State Bank of Pakistan never banned the use of cryptocurrencies.

>The State Bank of Pakistan (SBP) has released information that seeks to clarify the bank’s position on digital currencies. Although the statement “advises” both the public and institutions against dealing in the coins, it is not an outright ban.

Source: Thomas Delahunty | April 8, 2018, newsbtc.com

Soros, Rothschild, and Big Institutional Investors are Entering Bitcoin Market

>Financial moguls, including George Soros, the Rothschild family, and others, now have their sights set on Bitcoin. It makes for an interesting development, albeit the potential impact has yet to be determined.

Source: JP Buntinx | April 8, 2018, newsbtc.com

Petition To Reverse Indian Central Bank’s Crypto Ban Gains 17,000 Signatures

>A Change.org petition for “Mak[ing] India at the forefront of Blockchain Applications Revolution” in response to the Indian central bank ending all dealings with crypto-related accounts this week has gained over 17,000 thousand signature since going online April 5.

Source: Molly Jane Zuckerman | April 8, 2018, cointelegraph.com

OTC Bitcoin Trading Surges in Canada, Same May Happen in India

>In Canada, it seems OTC trading is quickly gaining popularity. Just last week, the volume has spiked well beyond the regular volume. Over in India, the regulatory situation has taken a bit of a dire turn. The Reserve Bank of India made it clear banks are expected to end support for cryptocurrency companies. Exchanges and trading solutions may find different ways to counter this solution, assuming the need arises to do so.

Source: JP Buntinx | April 8, 2018, newsbtc.com

Analysis

BTC/USD

As you can see from this daily chart, the price is still in this falling wedge, which started as a correction on December 16. Since then the price has fallen around 65% and is now sitting around 7000$ after the uptrend support line, originating from July 17 last year, repealed the price.

The current crypto market cap sentiment for Bitcoin is slightly negative, meaning that mentions and discussions on the web are leaning 10% toward negative.

Source: sentiment.io

Zooming into an hourly chart, we can clearly see the interaction with the uptrend support line and how it held pretty good. The price is currently experiencing sideways movement because of the interaction with these significant levels which can be interpreted as indecision.

Overall hourly chart signals a buy.

Even though hourly chart signals a buy, be cautious if trading, as we are still in a no-trade zone, and without confirmation for a trend reversal. As you can see from the daily chart, I’ve drawn another non-confirmed uptrend support line (dotted line), originating from March 25 last year. That line crosses over 50% Fibonacci level which is very significant, so in the next couple of days, I will be closely monitoring price action, as I am expecting another downward movement to retest those levels which in terms of price will be 6000$. However I am not expecting it to be a wick like last time on February 6, but a proper close, and a wick to extend to 5500$.

ETH/USD

Ethereum daily chart shows that the price is still in the falling wedge, and not only that but has also fallen below the secondary uptrend support as is now sitting at around 400$ which is a 71% less than at its highest point of 1419$ per ETH on January 13.

The current Ethereum sentiment is mixed, meaning that there are equally positive and negative mentions and discussions on the web.

Source: sentiment.io

crypto currencies market cap

In the last 24 hours, ETH price has risen 6.95% and is now sitting at 412$ interacting with a 100% Fibonacci level that was the top of the range on June 12 last year.

Overall hourly chart signals a buy.

Even though the price is showing an upward movement, Ethereum is like Bitcoin in a no-trade zone. Closely monitor what happens at these levels, as I would expect the price to go down from here to the cross-section of the uptrend support line number 2, top of the triangle from which the price has previously broken and 0.78 Fibo level which will be in the term of price around 330$.

XRP/USD

As you can see from this daily chart, the price was broken out of the first falling wedge only to get caught into a downward channel that brought the price down to where it is now sitting at around 0.5$ interacting with 0.38 Fibonacci level which is 57% less than the starting point of the channel.

The current Ripple sentiment is slightly negative, meaning mentions and discussions on the web are just slightly leaning toward the negative side.

Source: sentiment.io

Hourly chart shows sideways price action but definitely on a short-term uptrend in which the price rose up 5.66% in the last 24 hours and is now interacting with 0.38 Fibo level which serves as a resistance point for now.

Overall hourly chart signals a buy.

What is stated about Bitcoin and Ethereum implies here as well – no trade zone.

Conclusion

As a conclusion, I would like to say that the correlation between these three cryptocurrencies is strong and that they are all in the same point of their cycle. These are interesting levels as the downtrend is losing its momentum and the bulls are waiting for a confirmation to reenter the market. Expect a lot of sideways action as we are nearing the accumulation zone.

Tags Analysis, BTC, Crypto, ETH, trading, XRP

Forex Educational Library

Fibonacci: Analysis of Common Errors

Post author By Forex Academy
Post date 13 September, 2017
No Comments on Fibonacci: Analysis of Common Errors

Analysis of errors

There are certain common errors that traders can make when they are using the analysis of Fibonacci.

The first most common mistake that is made when traders use Fibonacci retracements is to start the range in the wrong direction. For example, if you want to find supports, you should start from high prices and go down, and the opposite process to find resistances. Also, when you select the high price and low price for the range, you should be sure that the confluence or support area is below the current price that closes the market, otherwise you would be finding a support which the market has already broken in the past.

If you use the Fibonacci tool like in the graph above to find supports, you will not have the correct supports or confluence zones and the market will be able to easily break these levels in the future because the market does not consider them important. The trader should find important levels of the market but levels that serve to project the future behavior of the market.

The graph above is taken on the EUR/USD. If you use the tool from high prices to bottom to find resistances, the analysis will be carried out erroneously and these supposed resistances will not be, and the market will continue its rally. This would be a costly mistake because the stop loss zone will be activated removing the trader from the market.

Do not use high or low prices for ranges that have been reached by recent oscillations, because if this is done, the market will have exceeded the Fibonacci levels and this means that the market will have broken zones of resistances or supports so that the market could do it again.

In these graphs can be observed that if high prices are in a range that has been touched by the market recently at some point, the market will break the resistance and the trade will be closed by a bad analysis running the point of stop loss.

Another common error is to make the ranges for Fibonacci retracements, but without a fixed point. For example, each range has an initial and final point different from each other, so the confluence areas will not be the right ones or there will not even be confluence zones so many people could say that the Fibonacci-based analyses do not serve, but they don’t realize that the exercise is wrong. Below are two graphs that show this problem and why it will lead to erroneous conclusions.

As seen in the graphs, if this were done, the trader would have areas of support and resistance that the market does not respect because it is not a true level so the trader will assume erroneous levels and will not be managing the risks adequately. To finish, it is important to mention that like all the tools, those that use the Fibonacci series can fail in some cases, where the market does not respect areas that the market should and continues its path without rebounding. But by using these tools, most of the time it will be managing the risk correctly and dramatically increase the chances of performing winning trades, so it is important to use all the tools mentioned to confirm that the market signals are correct.

©Forex.Academy

Tags Analysis, Error, Fibonacci

Forex Educational Library

Introduction to Fibonacci Analysis

Post author By Forex Academy
Post date 2 September, 2017
No Comments on Introduction to Fibonacci Analysis

Fibonacci analysis: A mathematical ground to construct support and resistance price levels.

One of the most complex aspects of trading certainly has to do with risk. How to measure and manage it regardless of any given set up or market environment or direction of the price (i.e., whether it is bullish or bearish). Potential profit and risk are thus correlated concepts; consequently, higher yields imply higher risks and vice versa. The main objective of any sound price analysis is then to maximize profit by keeping risk tightly under control; or, in practical terms, to preserve profit from running off in the long-run. However, the complete elimination of risk is nothing more than an illusion, what truly matters is to make it compatible with the preferred profit-generating setup, and it all starts with recognizing such risks and controlling them through the application of a wide range of tools. Despite the complexity of risk management, novices should not be discouraged; after all, even the most experienced traders still fail when applying their preferred tools, sometimes due to a know-it-all attitude, and because such tools are not comprehensive enough to account for all market conditions.

Fibonacci-based techniques are powerful enough to dedicate a complete set of articles; they will cover the conceptual basics, some easy-to-digest mathematical grounds, and of course, practical ways of applicability.

The Fibonacci sequence is an infinite sequence of natural numbers, which begins as follows –

0,1,1,2,3,5,8,13,21,34,55,89,144, 233, 377….

Starting with 0 and 1, the following numbers are the sum of their two predecessors. The golden ratio, on the other hand, is a universal law that explains that everything that grows and decays, evolves. Trading in financial markets is just one of the varied ways to apply the sequence. The golden ratio is a continuous geometric ratio resulting from a straight line between two number A and B. The straight line is divided into a segment longer than the other, and the total A + B segment has the same ratio to the more extended segment A as the long segment A has towards the shortest segment

Introduction to Fibonacci Analysis

The relationship would be written as follows: A + B: A: A: B. The golden ratio is an irrational number and the positive solution to this relationship is 1.61803398874989 … This relationship is found in some geometric figures and in nature, as for example in the shell of Nautilus, a species of mollusk.

Fibonacci

This golden relationship is viewed as an aesthetic and even divine character for some people. When a Fibonacci number is divided by its predecessor, a ratio is created, and, as those numbers become larger this ratio will approach the golden ratio.

The power of Fibonacci when added as an extra tool of market analysis lies in the fundamental observation that price does not move in a linear fashion; instead, it progresses in oscillations that can match natural ratios therein described. Put it differently, Fibo ratios describe the way price naturally moves in either direction, so that every new “step” higher or lower (regard such moves as waves) generates price clusters known as pivots; such “barriers” if you will follow patterns where levels are “stationary” areas usually categorized as supports and resistance if price has a bearish (low) or bluish (high) bias if you will.

Through the Fibonacci analysis and Phi ratios, you can test the laws that follow the market and therefore if we follow these principles (instead of going against them), we will be able to anticipate future movements of the market in a more precise fashion. Here is precisely where Fibonacci becomes relevant, either to predict retracement of extension price levels.

It comes as straightforward that Fibonacci belongs to what traders categorize as “technical analysis” as complementary to “fundamental analysis”. As for the retracement appliance of Fibo, the anticipated price levels are setbacks that refer to the possible support areas where buyers re-enter long positions if the dominant trend is bullish; or resistance levels where sellers re-enter short positions if the dominant trend is bearish. These levels are constructed by drawing ranges between the extreme points of the analyzed movement and the distance between the limits of the range there are subdivisions that will be vertical distances and the key percentages of this distance will be 38.2%, 50%, 61.8%, etc.

Why are we talking about retracements? Because in the technical analysis it is known that the prices of an asset move in “tendencies” (waves) either bullish or bearish, but that trend is not continuous; on the contrary, it has levels where the price stagnates due to such resistances or supports levels, simply because the market does not have completely vertical movements but oscillations within that trend.

Given the confirmation of a setback in the price of an asset, Fibonacci retracements will seek to calculate the magnitude of this movement. To achieve this, the Fibonacci tool available in the trading platforms is used and the percentages are applied which are obtained from the Fibonacci series on the magnitude of the previous trend. The percentage of 61.8% is known as the golden ratio and is the limit of the quotient that is obtained from the division of an element of the Fibonacci series with its previous number as the series tends to infinity. The percentage of 50 is equivalent to half the advance of the main trend and the percentage of 38.2 is the result of the subtraction of the unit and the percentage of 61.8%. The above can be seen reflected in the following graph, which shows how a regression would look depending on the Fibonacci percentage.

Fibonacci Analysis

Needless to say, this article introduces the very basis of how Fibonacci ratios can be applied as means to anticipate price retracements (or extensions) in the simplest form; such a tool is nothing but a mathematical approach to the natural ways price develops in any given trend. Being able to draw support or resistance levels by connecting the highest and lowest levels of a certain wave is, however, the first step of the process of charting. More advanced applications refer to the construction of price clusters by, for example, relating different waves from a varied array of time-intervals. To put it differently, Fibonacci is the keystone of more complex methods of technical analysis, but that will be the subject of other articles.

Tags Analysis, Fibonacci