Introduction to Forex
Forex Fundamentals
Characteristics of Candlesticks
Support and Resistance / Chart Patterns
Technical Indicators
Sniper Strategies
Technical Indicators
A Technical Indicators Course provides a concise understanding of various indicators used in technical analysis, such as moving averages, RSI, and MACD. It teaches traders how to apply these tools to analyze market trends, identify opportunities, and make informed trading decisions.
What I will learn?
- Simple Moving Average – SMA
- Exponential Moving Average – EMA
- Volume Weighted Average Price – VWAP
- Bollinger Bands Indicator
- Fibonacci Retracements
- Relative Strength Index (RSI)
- The Stochastic Oscillator Indicator
Content/Playlist (7)
- Simple Moving Average – SMA (00:09:42)
Description:
Many technical analysts use a Simple Moving Average (SMA) in their charts to simplify price data by smoothing it out and creating a simple line, which makes seeing the trend easier. This moving average can be illustrated over a specific period of time, such as 30-days, or 100-days, and can be used by both short-term traders and long-term investors. Moving averages can also be used to identify support and resistance areas in their charts. Furthermore, traders look for prices to cross over these moving averages to identify trend directions and entries and exits. For example, in an uptrend, the 50-day or 100-day moving average may act as a support level or floor, where the price bounces off it and continues upward. However, if the price crosses below the moving average, and establishes a downtrend, the moving average is now the resistance level. Moving averages also have drawbacks as they are a lagging indicator and use historical data, therefore may cause false signals. - Exponential Moving Average – EMA (00:13:16)
Description:
An Exponential Moving Average (EMA) is another widely used moving average that places a greater significance on the most recent price points. An EMA reacts more significantly to recent price changes than a SMA, and is used more with short-term traders. An EMA is a technical indicator, like all moving averages, used for entry and exit signals based on crossovers from the historical average. Traders often use several different EMA lengths, such as 10-day, 50-day or the 200-day. With all of these moving averages, the calculations are already selected in your charts under indicators, you just select which one is more suitable for your trading style. The EMA also has similar drawbacks as the SMA, and suffers from the lagging historical price, and may create a bias that leads to more false alarms. - Volume Weighted Average Price – VWAP (00:06:54)
Description:
The Volume Weighted Average Price (VWAP) is another moving average that traders can use as a support and resistance. A falling VWAP indicates a price downtrend and a rising VWAP indicates a price uptrend. The VWAP gives the average price of the security traded throughout the day, based on both volume and price. Also, it provides traders with the information on the trend and the value of the security. VWAP is used to identify liquidity points, and helps large financial institutions execute orders without impeding the price. However, VWAP has its limitations as it is used as a daily indicator, and also suffers from the lagging rule. Since VWAP begins at the start of the trading day, it increases its lag as the day goes on. - Bollinger Bands Indicator (00:16:20)
Description:
Bollinger Bands were created in the 1980’s, by a financial analyst named John Bollinger. These bands calculate the volatility in the market through complex technical analysis. Additionally, the bollinger bands can be used to identify overbought and oversold conditions, as well as a trend following indicator. Basically, if the price moves closer to the upper band, it indicates an overbought condition. However, if the price moves to the lower band, it indicates an oversold condition. The Bollinger bands consist of 3 lines, the upper line, middle line and the lower line, and are separated by a certain number of deviations. Finally, these bands help you understand whether the price is at a fair level to purchase at. For example, think of the middle line as a magnet (average), as the price drops to the lower band, or rises to the upper band, eventually the price wants to gravitate back to the moving average middle line. A) When a Bollinger Band is contracted, it represents a tight trading range and Consolidation B) When a Bollinger Band is expanding, it represents Volatility, and price action begins to come out of consolidation C) Price action brokedown bearish, making lower highs and lower lows, also it is below the Signal Line D) The Lower band can be used as a support level, with additional candlestick analysis E) A bullish crossover occurs when price action crosses above the Signal Line F) The Upper band can be used as a resistance level, with additional candlestick analysis G) A bearish crossover occurs when price action crosses below the Signal Line H) As price begins to consolidate (exhaustion), the Bollinger Bands begin to contract, until the next expansion - Fibonacci Retracements (00:10:19)
Description:
Fibonacci Retracements or Levels are horizontal lines that help you plot where support and resistance are likely to occur on your chart. Each level has a Fibonacci percentage assigned to it, and this is a calculation of how far a prior move has retraced or came back. The Fibonacci Levels are 100%, 78.6%, 61.8%, 50%, 38.2%, 23.6%, and finally 0%. These levels indicate that the price might consolidate in a zone or reverse the opposite direction. The 61.8% zone is considered a golden zone, where the price may continue its uptrend or a downtrend if this zone does not hold support or resistance. This indicator is very useful because you can plot the percentages from a high and a low on your particular time frame you are trading. 0% is considered to be the start of the retracement, while the 100% is the complete reversal to the original part of the move. A) This is an example of how to use the Fibonacci Retracement indicator tool when we have a swing Low to a swing High, and want to analyze the retracement levels B) You can use the dotted trendline tool to identify an uptrend, for a possible trend break, and retracement C) This is the swing high where we plotted the Fibonacci tool from the low (A) and is the top resistance level D) The 0.618 is our ‘Golden Zone’ and in this example we see price action break below, but finds new support at the 0.786 level, and reverses to the 0.236 level, before getting rejected and selling off further breaking below the golden zone for the second time E) We have a bearish breakdown from (A) and a full retracement, where price action makes new lower highs and lower lows - Relative Strength Index (RSI) (00:18:54)
Description:
The Relative Strength Index (RSI) developed by Welles Wilder, is a momentum oscillator that measures the speed and change of price movements. Today, RSI is one of the most widely used Overbought/Oversold technical indicators that traders use in their sub-charts. The RSI oscillates between 0 and 100, and is generally considered overbought above 70 and oversold below 30. However, these figures can be adjusted to better fit the security and personal preference. The RSI uses a default setting of 14-periods, and can be measured in minutes, days, weeks, or months. Therefore, as the number of trading days used in the RSI calculation increases, the indicator is considered to be more accurate. A) The RSI increases in strength as buying volume and bullish momentum increases B) As the RSI increases, the price action increases making higher highs and higher lows C) Price action will eventually peak as buying volume gets exhausted, and selling pressure increases, leading to a bearish downtrend D) RSI indicator is above 70, which is an overbought area, and selling pressure increases, leading to the bearish downtrend E) RSI eventually decreases to an oversold area, below 30, and buying pressure increases F) Price action forms a bullish candlestick as RSI is in an oversold condition leading to a bullish uptrend forming higher highs and higher lows - The Stochastic Oscillator Indicator (00:13:48)
Description:
The Stochastic Oscillator is a technical indicator, developed by George Lane in the 1950s. It is a momentum indicator that shows the location of the close relative to the high-low range over a set number of periods. The Stochastic Oscillator does not follow price or volume, it follows the speed or momentum of price. Furthermore, this indicator is range bound and can identify overbought and oversold conditions. The default setting for the Stochastic Oscillator is 14-periods. Finally, the Stochastic Oscillator has different versions that can be selected in your indicator section, consisting of Slow and Fast Stochastic Oscillators. Stochastic Oscillator and Overbought/Oversold Conditions A Stochastic Oscillator is a technical analysis indicator which can identify overbought/oversold market or security conditions. It is a range bound oscillator and ranges from 0 to 100. An overbought condition is when the Stochastic reading is above 80, and an oversold condition is when the Stochastic is below 20. Finally, overbought/oversold conditions illustrate that the securities price is near the top or bottom of its trading range for the specified period.
