Browsing Archive: May, 2011
RELIABILITY:Moderate · A long black day occurs
What it Means:Occurring in a downtrend, the Engulfing depicts an opening at a new low, followed by a high buy-in that closes at or above the previous day's open. This signifies that the downtrend has lost momentum and the bulls may be gaining strength. The Engulfing indicator is also the first two days of the Three O... Continue reading ...
RELIABILITY: Low / Moderate
How to identify it:
· Small real body at the upper end of the trading range · Lower shadow at least twice as long as the real body · No (or almost no) upper shadow There is a sharp sell off after the market opens during a downtrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies a weakening of the previous bearish sentiment, especially if the real body is white (...
PATTERN: Reversal
· First day is a long black day · Second day is a doji that gaps in the direction of the previous trend · The shadows of the doji should not be long In a downtrend, the market bolsters the bears with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions ha...
· First day is usually a long black day · Second day is a doji that gaps in the direction of the previous trend · The third day is a white day, gapping in the opposite direction, with no overlapping In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario definitely shows th... Continue reading ...
All of us know about the candlestick method of charting. In my last post. I have shown u how to plot a candlestick bar. The components of candle stick bar is quite similar to that of an OHLC bar, and I am sure that many of u wonder why should we prefer the candle stick bar against a simple OHLC bar? I did so in my early days
Its true that candle stick bar and OHLC bar are made from the same data, but the position of candle stick bar in the chart itself tells us about the possible way of future... Continue reading ...
How to plot a single OHLC bar
As already mentioned, its made up of open/high/low/close price of a given security.
A long straight line stands for the high and low where high is the highest point of that line and low is the lowest point of the line, which effectively defines the trading rangeThe open price is denoted by a tick on the left hand side and the clos price is denoted by a tick at the right hand side of the long straight line., viz the trading range
 How to plot a single candle stick b... Continue reading ...
Though thee are many types of chart but most important types are as follows
- Line chart
- Bar chart or OHLC chart
- Candle stick chart
Line chart
It is the very basic chart which consists of only closing price under a particular time frame, here, like any other chart, time scale remain along the X axis and price scale stays with Y axis and closing price of a security under a particular time frame is plotted and then joined by a line to get a line chart
Bar chart or ohlc chart As the name suggests this... Continue reading ...
The graphical representation of price action is the chart. It is so important to a technical analyst that often-technical analysts are called “chartist”. Without which, the very existence of a technical analyst will vanish, we can compare it to a rifle of a soldier, without a rifle, a soldier is also a lame duck. Just like that,without chart, a technical analyst can not survive in the market
Continue reading ...
The technical analysis consists of the following three factors. These are most important here.
- Price .2. Time and 3. Volume
- Price—while in the market, a buyer creates the demand and the seller creates the supply force, we can say price the the point of negotiation which lets them exchange their needs
- Time – time is the time scale of exchange, under which the exchange is taking place
- Volume—under a given time. Then number of securities which changes hands from seller to buyer is the corresp...
Continue reading ...
There are two broader ways to understand the market properly. One is fundamental analysis and another is technical analysis. These are two totally different approaches, which often conflicts in the process of decision-makings.
Before we go in to depth, let us know what they exactly stands for.
Fundamental analysis studies the “inner description” of the security. It includes the financial data which tries to emphasis upon SWOT viz the Strength, the Weakness, the Opportunity and finally, th... Continue reading ...
Posted by tushar chatterjee on Saturday, May 21, 2011,
In :
Forex Basics
Forex can be traded in various ways, such as
1. Spot forex
i)
simplest form of
trading
ii)
it gives you high
liquidity
iii)
spread difference is
not so big here
iv)
it runs 24 hours
v)
availability of free
tools, like charts, economic calendar and so on
2. Future market
i)
it is created by Chicago mercantile
exchange in 1972
ii)
it has standardized
size
iii) ... Continue reading ...
Posted by tushar chatterjee on Saturday, May 21, 2011,
In :
Forex Basics
It’s a
pair of a major currency with a currency of a developing nation, such as
USD/INR, being less traded, here liquidity generally tends to be very low and
transaction is also very high
Continue reading ...
Posted by tushar chatterjee on Saturday, May 21, 2011,
In :
Forex Basics
Currency pairs that don't contain the USD are known as minor pairs
or cross-currency pairs or simply as the "crosses.” The most actively
traded crosses are derived from the three major non-USD currencies: EUR, JPY,
and GBP. Continue reading ...
Posted by tushar chatterjee on Saturday, May 21, 2011,
In :
Forex Basics
Major currencies are those which enjoy a higher turn over in the
Forex market than other currencies, being heavily traded; these currencies give
you excellent liquidity which in turns increases volatility….. The single most
important factor for winning and loosing the game!
In the following table we can see all
the heavily traded currencies viz, major currencies, also notice the
nomenclature, every currency has a three letter name, like United States
dollar is called USD, here first two le... Continue reading ...
Posted by tushar chatterjee on Saturday, May 21, 2011,
In :
Forex Basics
Simply
put, “money” is traded here, its like buying a share of a company, when u are
optimistic about the future of a company, you will want to be a part of it and
that’s why you buy the shares of the company. Just like that, when you buy US$,
it essentially shows that at this moment you are optimistic about the future of
united state economy ... Continue reading ...
Posted by tushar chatterjee on Thursday, May 19, 2011,
In :
Forex Basics
The foreign exchange market (forex, FX, orcurrency market) is a global, worldwide decentralized over-the counter financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies. The primary purpose of the foreign exchange is to assist international trade and i... Continue reading ...
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