Last week, we looked at the fascinating concept of Ichimoku. We now go up a gear in terms of our analysis. So far, we’ve mostly been looking at tools or analysis directly on price. We’re now going to look at various tools and indicators that are a derivative of the price action. They usually sit under the main price chart. Their role is to help confirm the price action and give the user another objective piece of analysis to aid decision making. Although, a lot of that decision making can become very subjective! I like to break my price confirmation tools down into 5 distinct types of indicators: [Read more…]
Technical Analysis (Part 15) – Direct Price Analysis (DPA): Ichimoku
Part 14 showed us how useful and effective Pivots could be, especially for intraday trading. Part 15 introduces us to a very individual concept in technical analysis. Ichimoku is a unique trading tool for analysing any asset in any timeframe. To the outside observer, at first glance it looks a complete mess. Untangle it though and you have a straightforward and very powerful all round trading system that can seriously boost your trading results. This blog presents a simple overview of this system, building up the tools of Ichimoku using the S&P 500 Stock Indices as the base example, hopefully giving you an initial starting point on your journey into a unique part of technical analysis. [Read more…]
Technical Analysis (Part 13) – Direct Price Analysis (DPA): Fibonacci
In the last article we looked at how to determine whether markets were trending or ranging. In Part 13, we look at a very interesting method used to calculate support and resistance and capture the behaviour and psychology in any given market: Fibonacci. Fibonacci has become an extremely popular tool amongst technical analysts. [Read more…]
Technical Analysis (Part 12) – Direct Price Analysis (DPA): Trending or Ranging?
In the last article, we looked at indicators on price. This week we try to answer one of the hardest questions in technical analysis. When is a market trending or ranging? Understanding what camp you are currently in will be crucial for your trading success. Many of the technical tools you will come across work better in the different periods of price action. We look in particular at one indicator; the Directional Moving Indicator (DMI), which tries to answer this question. [Read more…]
Technical Analysis (Part 11) – Direct Price Analysis (DPA): Bands
In the last article we looked at Moving Averages. In Part 11, we take the evolution of direct price analysis, in technical analysis, a step further in its application. In this article we are looking at ‘bands’ created around price, for the purposes of trade management and identifying trading opportunities. We are going to look at four of my favourites: Bollinger Bands, Donchian Bands, Keltner Bands and Envelopes. [Read more…]
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