Technical Analysis (Part 21) – Japanese Charts: Line Break

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TOKYO - DECEMBER 29: Billboards in Shinjuku's Kabuki-cho district December 29, 2012 in Tokyo, JP. The area is a nightlife district known as Sleepless Town.

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

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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

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japan 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…]

Technical Analysis (Part 18): Alternative Concepts in Technical Analysis

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In the last couple of articles we have looked at price confirmation tools. This week, we are going to look at some of the more alternative concepts in technical analysis. There are some very strange and bizarre concepts out there – some that defy logic and are hard to digest. If they work for the user though, who am I to argue against them?!

To call the concepts that I am going to look at in this week article ‘alternative’ is a little unfair. I only class them as alternative, as they aren’t in my every day world of technical analysis and trading. However, for some, these concepts are the life and soul of their trading and they would consider them to be ‘mainstream’. These alternative concepts can become a lifetime’s study. I would say, though, that they are more suitable for advanced or experienced users of technical analysis. A thorough understanding of technical analysis generally, will enable you to more easily understand these alternative concepts and deploy them in your analysis and trading. [Read more…]

Technical Analysis (Part 17) – Price Confirmation Tools (PCT): Volume, Volatility & Sentiment

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Previously, we looked at tools and indicators based around trend and momentum that confirmed price action. In this article, we will look at three further types of price confirmation tool: Volatility, Volume & Sentiment. These tools could help give you supportive, independent information in your analysis of any given asset. What is presented here, is not an exhaustive list of the technical tools used in this space, but some of the more generic and popular ones. [Read more…]

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