We are going to round off our introductory technical analysis series, in the last three articles, by putting together what we’ve learnt so far. It’s fine having all this new knowledge, but how do you use it in the real world? Technical analysis is a multi-talented tool that can be used for many things in your trading – not just direct price analysis. So this week, we are going to look at how you can use technical analysis to design, build and implement a trading strategy. In our final two articles, we will see how you can apply technical analysis in your risk and trade management and how you can use it to improve your results! [Read more…]
Technical Analysis (Part 22) – Japanese Charts : Kagi
Previously we looked at the Line Break chart which was great for spotting possible reversals. In this article, we look at an approach that can filter out some of the psychological issues you may be having with your analysis. If you’re struggling with the ‘noise’ of the charts and information overload in your trading, then Kagi charting could be just the thing for you to add to your trading arsenal. Kagi charts were developed in Japan in the 1870’s when their stock market started trading and were used to track the price movement of rice. They were used to give a much more transparent picture of where the price of an individual asset was headed independent of time. Due to the global world we live in and the advancement in charting software, techniques such as Kagi charting are now available to all of us. [Read more…]
Technical Analysis (Part 21) – Japanese Charts: Line Break
Renko charts, discussed in the previous article, should have given you a whole new perspective on how to analyse and trade chart data. In article 21, we are going to look at another form of Japanese chart that helps you to spot reversals! Calling the turn (reversals), when trading any financial market, is a notoriously difficult thing to achieve with any given consistency. There are thousands of different technical analysis tools and techniques that try to give you this edge. One of the best and most simple I’ve come across is the Line Break chart. [Read more…]
Technical Analysis (Part 20) – Japanese Charts : Renko
In Part 19, we introduced the idea of Heikin Ashi. In part 20, we go off on a more extreme tangent! In terms of Technical Analysis applications, Renko Charts, at first glance, could appear to be as ‘way out’ as it gets – the work of some Technical Analysis boffin with too much time on their hands! In fact, Renko charts aren’t some new tool created by the technological revolution, but have their roots firmly embedded in eighteenth century Japan. They were originally applied to trade Rice and formed the building blocks for a robust trading strategy. [Read more…]
Technical Analysis (Part 19) – Japanese Charts: Heikin Ashi
In part 18 we looked at alternative concepts in technical analysis. In part 19 we turn our attention to the world of Japanese charting. In fact, this and the next three parts (Renko, Kagi and Line Break) will all focus on the Eastern approach to technical analysis. We start with Heikin Ashi – an often forgotten and very effective way to use Japanese candlestick charts. Understanding this ancient method of candlestick charting can certainly reap dividends for your trading! [Read more…]
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