Trading analysis tools
Use of these tools in combination with correspondingprices' graphs give an opportunity to make more qualitative decisionswhen purchasing/sellingcurrency.
help dealers-in-goods to check up the presence of existent or new trends, and observe continuous trends which are thought to develop very soon.Therearethreemaintypesof them: simple, weighted, exponential.
The first type reflects average values of prices' graphs on the interval it covers. To determine average price value, it is necessary to sum up maximum and minimum values (closing price),and divide into their total number.Curve is established on the basis of got averagedvalues.
The second type gives strength on the last data, every price value in which is multiplied by a definite rate, or weight having different value for different points. After that values are summed and divided into total number.
The third type sums up values of a definite portion of last price and previous value of moving average. To determine optimum moving average for definite currency pair it is usually necessary to make «curve approximation». It is a process of manageable number of periods and«proper» kind of moving average to get optimal results.
It gives information about closing price in current period on the previous behaviour analysed by financial instrument.
They are measured and given in the form of two curves - %Mи %N range of values of which - from 0 to 100. Values above 80 inform about rapidly growing market, and below 20 –about rapidly reducing trend.
It measures inertia of price movement. Asa previous instrument, it takes values from 0 to 100. Dealers-in-goods are usually interested in the moment it rises above 80 (that reflects overbought market and its probablemarket disruption),and above 20 –it signifies that market is overboughtand is ready to grow.
They are curves depending on market variability; they are used for identification of exceptional price maximum and minimum. These curves are situated above and below from moving average and based on the value of standard deviation from moving average.
It is the difference between 26 и 12 day exponential moving averages. As other indicators, it is used by dealers-in-goods for identification of anticipated signals or difference between market prices and the indicator display. If this tool takes positive value, and its minimums are higher at the time of growth, it can bea strong signal for purchase. On the contrary, if its maximums get lower when prices reach new heights, it can signify a strong bearish divergence and purchase signal.
It is a number sequence describing cycles found in nature, and often used in relation to technical analysis for identification of currency market price rollback level.
The following ratio is usually used in currency markets: 23.6%, 38.2%, 50% and 61.8%.