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Harmonic Patterns

H&S Pattern can be either horizontal or sloping up/down neckline ( """ The pattern consists of a head (the second and the highest peak) and 2 shoulders (lower peaks) and a neckline (the line which connects the lowest points of the two troughs and represents a support level). The neckline may be either horizontal or sloping up/down. The signal is more reliable when the slope is down rather than up. The pattern is confirmed when the prices broke below the neckline after forming the second shoulder. Once it happens, the currency pair should start a downtrend. So, a sell order is put below the neckline. To get the target measure the distance between the highest point of the head and the neckline. This distance is approximately how far the price will move after it breaks the neckline. source FBS
SP:SPXEducation
by samitrading
4
Education excerpt: Classic Chart FormationsIntroduction The part of technical analysis studies chart patterns. Rationale behind this practice is that chart patterns have fractal nature which represents ability of a trend to act similarly over different time periods. Chart patterns are basically configuration of price that is bounded above and below. Boundaries are commonly derived either from a line or a curve. Lines, for example, can be represented by simple horizontal lines or trend lines. Curve, on the other hand, is rather reminiscent of an arc or a bow in its shape. Boundaries in chart patterns can often act as support or resistance. All chart patterns have their development stages. There is first stage which describes the trend preceding the formation and then there is second stage which usually triggers the signal for action. In the first stage of pattern formation analyst merely observes price action and waits for signal to be triggered. This stage can also be called setup. The second stage then begins with signal being triggered. Trigger can, for example, come in a form of a crossover (by indicator, price, etc.) or breakout. In this stage analyst takes action and either enters or exits the market. Entry can be placed from above or from below. Similarly, exit can be downward or upward. The variables of entries and exits are statistically important because some combinations of entries and exits tend to produce better results than other combinations of entries and exits. The chart patterns can be subdivided in two groups: continuation patterns and reversal patterns. Continuation patterns are associated with continuation of trend that was present prior to the formation of a continuation pattern. On the other hand, reversal patterns are associated with reversal of trend that was in place prior to the formation of a reversal pattern. Double Top and Double Bottom Double top and double bottom formation is very simple pattern that is well known to many professional and retail traders. It consists of three reversal points. For double top these reversal points are: two peaks and one trough. Opposite to that, for double bottom formation reversal points are: two troughs and one peak. Price enters double top formation from below and double bottom formation from above. Peaks in double top and troughs in double bottom should not be apart from each other’s price level more than 5%. Double top and double bottom normally forms over two to six weeks. If formation takes longer then it starts becoming less reliable. Double top is valid only when point separating two peaks was penetrated. Similarly, double bottom is valid only when point isolating two troughs was penetrated. Illustration 1.01 Picture above depicts graph of General Motors stock on daily timeframe. It is observable that price touched resistance line twice before reversing to the downside. Rectangle Rectangle is simple pattern that is bound by two horizontal lines that are parallel to each other. These lines acting as boundaries are called: support and resistance. Each boundary must also be a trend line. That means it must touch approximately same price reversal level at least twice. This particular requirement is what separates it from a double bottom or a double top formation. Price tends to oscillate between two bounds in the rectangle pattern. Then trigger comes in a form of breakout above resistance or below support. Illustration 1.02 Picture above depicts graph of Pepsico stock on daily timeframe. It is observable that price action is sideways in this example. Price oscillates between resistance and support lines with occasional false breakouts below support. Triple Top and Triple Bottom The triple top and bottom pattern is bounded by horizontal line similarly like double top and bottom formation. However, this pattern differs from double formation in that it has three touches to the support or resistance line instead of just two touches. Triple top and bottom tends to occur with lower frequency in comparison to the rectangle and double formation. In triple top each peak should be roughly at the same level and each peak should have similar shape. Confirmation for triple top comes once troughs are penetrated to the upside. Triple bottom is basically mirror image of triple top and confirmation comes once breakout above peaks takes place. Pullbacks are very common for this formation and they tend to reduce breakout potential. Standard Triangle Triangle pattern is bounded by two lines that are crossing each other when they are extended to the future. Triangle pattern has its base and apex. Point of collision between two lines is called apex while base is basically a distance between the first high reversal point and the first low reversal point within triangle pattern. This pattern should consist of least two touches to the support line and another two touches to the resistance line. Standard triangle can be either symmetrical or ascending, or descending. Symmetrical triangle is considered to be continuation pattern while ascending and descending triangle is mostly regarded as reversal pattern. In symmetrical triangle both boundaries are at slope. In ascending triangle only lower bound is at slope while upper bound is horizontal. Contrary to that, in descending triangle upper boundary is at slope and lower bound is horizontal. These patterns are validated once breakout above or below boundary takes place. Another form of confirmation comes when breakout from an apex of triangle occurs. Illustration 1.03 Picture above shows daily graph of TSLA stock. Formation of symmetrical triangle is observable. Diamond top Diamond top formation is rare broadening pattern that is very difficult to observe. It combines two triangles and can be imagined as mirror image of triangle pattern followed by triangle pattern. Price range increases and then decreases throughout this formation. Wedge A wedge pattern is simply a triangle pattern with both trend lines being at slope and pointing to the same direction. There are two types of wedges: a rising wedge and a declining wedge. A rising wedge consists of trend lines that point upwards while declining wedge contains trend lines that point downwards. Illustration 1.04 Illustration above shows daily graph of DAL stock. It is visible that confirmation came after breakout above upper bound. After that price continued to rise. This pattern is very bullish once confirmation occurs. Rounding Top and Rounding Bottom Rounding top and bottom patterns are longer term formations that are bounded rather by an arc than horizontal line. Rounding of the pattern usually spans over long time and it tends to contain short term trends within its formation. Another interchangeable name for these formations is: saucer or bowl, or cup. There is also variation of this pattern that develops over shorter period of time and it is called scallop. Volume in rounding top tends to gradually increase as price increases towards the peak of the formation. Then it tends to fall as price decreases from the peak. Similarly, in rounding bottom volume tends to decrease as price is approaching a low. After that volume tends to increase as price starts to rise from a low. Head and shoulders Head and shoulder pattern is one of the most famous chart patterns with statistical significance and very high profitability. It is complex pattern that combines trend lines, support or resistance lines, and rounding. Head and shoulders pattern is normally preceded by uptrend while inverted head and shoulder formation is preceded by downtrend. This pattern is considered to be reversal pattern where head and shoulders is topping formation and inverted head and shoulders is bottoming formation. Pattern's structure consists of head, shoulders and neckline. Head is either high in topping formation or low in the bottoming formation. Neckline in topping pattern is simply trend line which connects two troughs that separate head and shoulders. In bottoming formation neckline connects two peaks that separate head and shoulders. Illustration 1.05 Picture above shows daily graph of Pepsico stock. Inverted head and shoulders pattern is obsrvable bottoming head and shoulder pattern is formed by three troughs. The second trough must belower than the first and the third trough. The first trough is called left shoulder and third trough is called right shoulder. Middle trough is called head. Shoulders do not have to be the same height. Because of that neckline can be at slope in head and shoulder formation. Confirmation in this pattern comes once neckline is penetrated. Disclaimer: This content is just an excerpt from full document that will be available later with full range of illustrations and more detail. Purpose of this content is education.
NYSE:DALEducation
by Tradersweekly
8
price action patterns you need to know ( part 1 ) Hi friends i'll share with you some price action patterns you should know . I don't like posting a picture with 100 patterns . I would like to post this in steps so that you can understand more and make things clear . 1- ascending triangle generally happens in an uptrend and is a bullish pattern , you can set your order after the breakout of the horizontal line with a good volume candle . - descending Triangle Pattern is the exact opposite of the ascending triangle pattern. It is a bearish continuation pattern indicating that the prior downtrend will continue and you set your order after the brakout of horizontal line with a good volume candle . please support me with like and follow me for more ideas and tell me what do you think about that
Education
by Diamond_Chart
Classic Chart Patterns That You Need To KnowHello everyone, as we all know the market action discounts everything :) _________________________________Make sure to Like and Follow if you like the idea_________________________________ In today’s video, we are going to learn the Classic reversal and continuation chart patterns, How to identify them and when to enter a trade, and how to use stop loss and take profit with these patterns. These patterns can be found in candlestick, bar and line charts. Anyone who is interested in analyzing any market and trading in general should know these so if u don’t know them have no worries after you watch this video you will. NOTE: you should always wait for confirmation when trading with these patterns. Confirmation in all of them is breaking the pattern and the market closing above or below it. Chart Patterns are divided into 2 categories : Reversal Patterns : They indicate a high probability that the existing trend has come to an end and that there is good chance of the trend reversing direction. Continuation Patterns : They indicate a high probability that the existing trend is still active and that there is a good chance of the trend continuing in the same direction. There are 2 types of these patterns : Bearish : it means that the market is going down. Bullish : It means that the market is going up Let's Start with the Bearish Reversal Patterns : 1) Double Top (75.01%) : The double top is one of the most common reversal price patterns. The double top is defined by two nearly equal highs with some space between the touches, The pattern is complete when price breaks below the swing low point created after the first high. The pattern is considered a success when price covers the same distance following the breakout as the distance from the double high to the recent swing low point 2) Triple Top (79.33%) : The triple top is defined by three nearly equal highs with some space between the touches, The pattern is complete when price breaks below the swing low points created between the highs. The pattern is considered a success when price covers the same distance after the breakout as the distance from the triple high to the furthest swing low point 3) Head and Shoulder (83.04%) : The head and shoulders patterns are statistically the most accurate of the price action patterns. The regular head and shoulders pattern is defined by two swing highs (the shoulders) with a higher high (the head) between them. The two outer swing highs/lows don't have to be at the same price, but the closer they are to the same area the stronger the pattern generally becomes. The pattern is complete when price breaks through the "neckline" created by the two swing low points. 4) Rising Wedge (73.03%) : A wedge pattern represents a tightening price movement between the support and resistance lines. the price is hypothesized to break through the support. This means the wedge is a reversal pattern as the breakout is opposite to the general trend. Rising Wedge serves as a reversal if appeared during an uptrend . Now let's Talk about the Bullish Reversal Chart patterns : 1) Double Bottom (78.55%) : The double bottom is one of the most common reversal price patterns. The double bottom is created from two nearly equal lows, The pattern is complete when price breaks above the swing high point created by the first low. The pattern is considered a success when price covers the same distance following the breakout as the distance from the double low to the recent swing high. 2) Triple Bottom (79.33%) : he triple bottom is another variation of reversal price patterns. the triple bottom is created from three nearly equal lows, The pattern is complete when price breaks above the swing high points created between the lows. The pattern is considered a success when price covers the same distance after the breakout as the distance from the triple low to furthest swing high. 3) Inverted Head and Shoulder (83.44%) : The head and shoulders patterns are statistically the most accurate of the price action patterns, The inverted head and shoulders pattern has two swing lows with a lower low between them. The two outer swing lows don't have to be at the same price, but the closer they are to the same area the stronger the pattern generally becomes. The pattern is complete when price breaks through the "neckline" created by the two swing high points . 4) Falling Wedge (72.88%) : A wedge pattern represents a tightening price movement between the support and resistance lines. the price is hypothesized to break through the support. This means the wedge is a reversal pattern as the breakout is opposite to the general trend. Failing Wedge serves as a reversal if appeared during a downtrend Let's move on now and start talking about Bearish Continuation patterns : 1) Rising Wedge (73.03%) : The Rising Wedge in the downtrend indicates a continuation of the previous trend. It is formed when the prices are making Higher Highs and Higher Lows compared to the previous price movements. 2) Bearish Flag (67.72%) : The flag is a continuation pattern that can occur after a strong trending move. It consists of a strong bearish trending move followed by a rapid series of higher lows and higher highs, These patterns are small hesitations in strong trends. The flag pattern appears as a small rectangle that is usually tilted against the prevailing trend in price. The best flag patterns have two features: 1) a very strong run in price (near vertical) prior to the setting up of the flag and 2) a tight flag that occurs right on the upper (or lower) edge of that run. This pattern is considered successful when it breaks the lower trendline and then proceeds to cover the same distance as the prior trending move starting from the outer edge of the pattern. 3) Bearish Pennant (55.19%) : The pennant often occurs in high momentum markets after a strong trending move, but the tight price formation that occurs can lead to breakouts against the preceding trend almost as often as we get continuation. The slight difference in the price pattern formation between flags and pennants is an important distinction that can make a big difference in your trading results so it's well worth being aware of while watching the market develop during your trading day. 4) Descending Triangle (72.93%) : The triangle pattern usually occurs in trends and acts as a continuation pattern. It's defined by a bearish trending move followed by two or more equal lows with a series of lower highs. The pattern is complete when price breaks below the horizontal support area and the pattern is considered successful if price extends beyond the breakout point for at least the same distance as the pattern width And finally we have the Bullish Continuation patterns : 1) Falling Wedge (72.88%) : The Falling Wedge in the downtrend indicates a continuation of the previous trend. It is formed when the prices are making lower Highs and lower Lows compared to the previous price movements. 2) Bullish Flag (67.13%) : The flag is a continuation pattern that can occur after a strong trending move. It consists of a strong bullish trending move followed by a rapid series of lower highs and lower lows, These patterns are small hesitations in strong trends. The flag pattern appears as a small rectangle that is usually tilted against the prevailing trend in price. The best flag patterns have two features: 1) a very strong run in price (near vertical) prior to the setting up of the flag and 2) a tight flag that occurs right on the upper (or lower) edge of that run. This pattern is considered successful when it breaks the upper trendline and then proceeds to cover the same distance as the prior trending move starting from the outer edge of the pattern. 3) Bullish Pennant (54.87%) : The pennant often occurs in high momentum markets after a strong trending move, but the tight price formation that occurs can lead to breakouts against the preceding trend almost as often as we get continuation. The slight difference in the price pattern formation between flags and pennants is an important distinction that can make a big difference in your trading results so it's well worth being aware of while watching the market develop during your trading day. 4) Ascending Triangle (72.77%) : The triangle pattern usually occurs in trends and acts as a continuation pattern. It's defined by a bullish trending move followed by two or more equal highs and a series of higher lows The pattern is complete when price breaks above the horizontal support area and the pattern is considered successful if price extends beyond the breakout point for at least the same distance as the pattern width 5 Rules To Always Follow I hope that I was able to help you understand Classic Continuation and Reversal Patterns better and if you have any more questions don't hesitate to ask. This is not Financial Advice its a pure Educational video. Hit that like if you found this helpful and check out my other video about the Moving Average, Stochastic oscillator, The Dow Jones Theory, How To Trade Breakouts, The RSI , The MACD , The Bollinger Bands , The Different Types Of Trading Strategies, Candlestick Charts Part 1 & 2 and 3 links will be bellow
Education
by GabiDahduh
118
Candle stick every beginners should know . ( part 4 )today i'll share with you the most famous candlestick pattern everyone should know. part 4 we will start with the Rising Three Methods Pattern . It is a five candlestick pattern observed during a bullish rally and its indicates that bullishness would further continue in the market . second , Falling Three Methods Pattern It is a five candlestick pattern observed during a bearish rally. This pattern indicates that bearishness would further continue in the market. third the dark cloud cover appear in the uptrend and It indicates the possibility of a price reversal ( short ) . please support me with like and follow me for more ideas
Education
by Diamond_Chart
2
Candle stick every beginners should know . ( part 3 ) Hi friends , today i'll share with you the most famous candlestick pattern everyone should know. part 3 we will start with the morning star . this pattern appear in the downtrend and It indicates the possibility of a price reversal ( long ) second , the evening star appear in the uptrend and It indicates the possibility of a price reversal ( short ) third doji / spinning top / high wave appear in the downtrend and the uptrend and They considered as reversal candles . please support me with like and followe me for more ideas .
Education
by Diamond_Chart
4
Opening Range Breakout StrategyOpening range breakout is something that I use daily for almost all of my plays. Its very simple. If the high or the low of the first five minute bar is broken. Take an entry in the way the stoke broke. I have seen soooo much success with this strategy. There is much more that goes into it like stop losses and where to take profits. Those will all be explained in further tutorials. also this strategy is not at all a swing trade strategy, this is purely a day trade strategy that is only used in the morning as the market is opened. I challenge you guys to go through charts yourself and look for opening range breakouts. Also note this works best on the 5 minute chart. Hope you guys see as much success as I do with this very useful strategy!!!
NASDAQ:NVDAEducation
by MindOverMarket
understanding 5-0 harmonic patterns-2It can be seen that a harmonic 5-0 made in 30 min time frame which was a bullish 5-0 pattern, failing to sustain at the support .50 retracement a plunge in price action seen which was too fast like the previous example where it becomes extremely difficult to react so fast to decide except to book a loss as fast as possible. it is requested to you all who are viewing this article to view with the previous 5-0 pattern to get a clear idea about the 5-0 patterns. However I am once again mentioning the 5-0 pattern rules. What is the 5-0 harmonic pattern? Just as it is with the shark pattern, the 5-0 harmonic pattern is a relatively new pattern. Carney discovered it and wrote about this pattern in the second book in his harmonic series, ‘Harmonic Trading: Volume Two’. The 5-0 pattern is easily one of the wonkiest looking patterns. Depending on the amount of knowledge you have about harmonic patterns, the 5-0 will look different, and this is mainly because the 5-0 pattern begins a 0. If you are familiar with seeing XABCD, then 0XABCD will undoubtedly look different. The patterns are relatively new but are getting more popular lately. It stands out from the other harmonic patterns because it is meant to begin a new trend rather than discover retracement. There are two types of this pattern, bullish and bearish. The convergence zones discovered with the help of the shark pattern makes it possible for us to accurately detect the rebound but doesn’t necessarily lead to the restoration of the previous trend. On the other hand, regular rollbacks aim to determine the ability of the forces dominant on the market in the previous period (bears or bulls) to get the initiative back to their disposal. If they are not sufficient, the last reversal of the previous trend occurs, but already within another pattern – 5-0 harmonic pattern. How to identify the 5-0 pattern? The 5-0 pattern begins with either an uptrend or a downtrend which gets exhausted and draws zigzag like corrective movements. The qualities of the 5-0 pattern to look at include: AB movement has to be 1.13 to 1.618 retracement of XA. BC movement has to be 1.618 to 2.24 retracement of an AB. CD movement ought to be 0.5 retracements of BC C should be between 0.886 and 1.13 of 0X movement If the conditions are satisfied, some traders trade the last leg of CD. They entering at C with a stop below 2.24 of AB retracement and aiming at 50 percent correction of BC movement. The 5-0 harmonic pattern is traded when the price is getting to point D. The stop-loss is positioned a few ticks below/above the farthest possible D level. Unlike a lot of the other patterns, 5-0 doesn’t have specific targets because it usually begins a new trend. Here the pattern fib ratios don’t matter much. Entries might be done with a limit order or on price reversals away from point D. All entries have to be confirmed for risk/reward ratio. Entries having less risk/reward have to be taken cautiously or discarded altogether.
NSE:AUBANKEducation
by Somanathrout
2
understanding harmonic 5-0 patterns What is the 5-0 harmonic pattern? Just as it is with the shark pattern, the 5-0 harmonic pattern is a relatively new pattern. Carney discovered it and wrote about this pattern in the second book in his harmonic series, ‘Harmonic Trading: Volume Two’. The 5-0 pattern is easily one of the wonkiest looking patterns. Depending on the amount of knowledge you have about harmonic patterns, the 5-0 will look different, and this is mainly because the 5-0 pattern begins a 0. If you are familiar with seeing XABCD, then 0XABCD will undoubtedly look different. The patterns are relatively new but are getting more popular lately. It stands out from the other harmonic patterns because it is meant to begin a new trend rather than discover retracement. There are two types of this pattern, bullish and bearish. The convergence zones discovered with the help of the shark pattern makes it possible for us to accurately detect the rebound but doesn’t necessarily lead to the restoration of the previous trend. On the other hand, regular rollbacks aim to determine the ability of the forces dominant on the market in the previous period (bears or bulls) to get the initiative back to their disposal. If they are not sufficient, the last reversal of the previous trend occurs, but already within another pattern – 5-0 harmonic pattern. How to identify the 5-0 pattern? The 5-0 pattern begins with either an uptrend or a downtrend which gets exhausted and draws zigzag like corrective movements. The qualities of the 5-0 pattern to look at include: AB movement has to be 1.13 to 1.618 retracement of XA. BC movement has to be 1.618 to 2.24 retracement of an AB. CD movement ought to be 0.5 retracements of BC C should be between 0.886 and 1.13 of 0X movement If the conditions are satisfied, we can trade the last leg of CD. They entering at C with a stop below 2.24 of AB retracement and aiming at 50 percent correction of BC movement. The 5-0 harmonic pattern is traded when the price is getting to point D. The stop-loss is positioned a few points below/above the farthest possible D level. Unlike a lot of the other patterns, 5-0 doesn’t have specific targets because it usually begins a new trend. Here the pattern fib ratios don’t matter much. Entries might be done with a limit order or on price reversals away from point D. All entries have to be confirmed for risk/reward ratio. Entries having less risk/reward have to be taken cautiously or discarded altogether. In our example, current stock AUBANK has shown a classic 0xabcd pattern or in other words 5-0 harmonic pattern. It is a bearish 5-0 pattern where most of the XABCD pattern swing traders would have forced either to become a long term investor or book a loss who have not booked at .50 retracement as everything has happened too fast to react on. As technology is developing everyday , so as the traps are becoming too much knotty to decode and survive as a swing trader, for a swing trader"s job is to find swings every time and dive with the trend and this type of complex patterns ends up his/her dream as a bad bad nightmare. So, this effort by me is especially for the swing traders who are welcomed to enlighten more on this topic and to go updated as this pattern is said to be new.
NSE:AUBANKEducation
by Somanathrout
Bullish Shark Within Bullish ChannelFrom this chart, can be found that Bullish Shark Within Bullish Channel. This one of example for Bullish Retracement Patterns within Bullish Trend Channels shown in Harmonic Trading: Volume Two, Page 124 until Page 126 written by Scott M Carney. Bullish Harmonic Pattern in Bullish Channel or Ascending Channel may indicate continuation pattern in Channel or rather as confirmation to show that price will go up. To simplify, M pattern within Ascending Channel indicates that price will go up in continuation. Noted that Shark is Harmonic Pattern that use Reciprocal AB=CD. You may refer Link to Related Ideas for more information. Thank you.
MYX:FCPOU2022Education
by RozaniGhani-RG
Education excerpt: Relative Strength IndexEducation excerpt: Relative Strength Index General information The Relative Strength Index ( RSI ) is a momentum oscillator that was introduced by J. Welles Wilder in an article published in Commodities magazine in June 1978. The Relative Strength Index measures the velocity of directional price movement and is commonly used in conjunction with a daily bar chart. However, it can be utilized on a bar chart with any particular time frame. The concept of this oscillator is based upon an idea of an asset being oversold or overbought. Generally, tops and bottoms are indicated when the RSI goes above 70 or drops below 30. Although, failure swings above 70 or below 30 can imply possible market reversal. Similarly, divergence between the RSI and price action on the chart can signal a market turning point. Chart formations and support and resistance often show up graphically on the RSI despite the fact that they may not be apparent on the bar chart. The slope of the momentum oscillator is directly proportional to the velocity of the move. Thus, the distance traveled up or down by the RSI is proportional to the magnitude of the move. The horizontal axis represents time and the vertical axis represents distance traveled by the indicator. The RSI moves slowly when the market continues its directional movement . However, once price is at the market turning point, RSI tends to move faster. Calculation The Relative Strength Index is commonly calculated using the close price of a 14 day period. The equation for its calculation involves several components. These are: • Average up closes • Average down closes • Relative strength Relative Strength ( RS ) = (average of 14 day's closes up/average of 14 day's closes down) Relative Strength Index ( RSI ) = 100 – Calculation begins with obtaining the sum of the up closes for the previous 14 days. This sum is then divided by the number of days used in calculating the generating figure for average up closes. Similarly, the sum of the down closes for the previous 14 days is divided by the number of days used in calculating the generating figure for average down closes. After these two operations are conducted, the average up days are divided by the average down days resulting in the value of the Relative Strength ( RS ). The number 1 is then added to the value of RS . Next, 100 is divided by the new amount of RS . The resulting figure is subsequently subtracted by 100 generating the value of the Relative Strength Index ( RSI ). From this step on, the previous value of average up closes and average down closes can be used to generate the next value of the RSI . In order to calculate the next average up close, the previous value of average up closes is multiplied by 13 and the present day average up close is added to this figure. This value is then divided by 14 generating the value for the new average up closes. In similar fashion, the new average down close is calculated by multiplying the previous average down closes by 13. Today's down close is then added to the figure. The resulting figure is again divided by 14 to generate the new average down close. After that, the same steps indicated to calculate the initial RSI need to be followed. Divergence When trend is prevalent and two indexes (or index and price) are going simultaneously either up or down they exhibit positive correlation. However, when this correlation breaks and one index (or price) keeps going up while another index reverses down divergence is said to occur. Technical analyst should pay attention to this instance as it sometimes has abillity to foreshadow upcoming reversal in trend. Though, there are many instances when divergence occurs and reversal in price trend fails to materialize. For this reason some analysts like to implement concept of double divergence. Double divergence There are many instances when price continues its rise and analyst can observe oscillator or idex to fall only to see it later climb back up in tandem with price. (same applies to the opposite situation when price falls and index or oscillator starts to rise) The divergence occured but price trend remained intact. Because the divergence can be misleading, some analysts preffer to wait for the second divergence before placing their entries or exits. Disclaimer: This content serves only educational purpose.
BITSTAMP:BTCUSDEducation
by fxpremiere
The Head & Shoulders Pattern Tutorial (Basic) #BitcoinThe Head and Shoulders pattern is one of the oldest recognised market structures. Representing a fully formed fractal when completed, the H&S confirms a short term reversal in trend. Setting the levels 50%,100% and 200% on the Fib tool, I have devised a simple system of confirmation/action to take advantage (profit) from the completion of the Pattern. 1st confirmation occurs when price first breaks below a previous low. This establishes the Neckline (100%) a horizontal line drawn from the valley of the left shoulder. 2nd confirmation occurs when price retraces back above 50%, forming the right shoulder. Agressive traders enter short above 50% with a stop loss at 0%, this entry statistically is higher risk but also higher reward. Final confirmation occurs once the right shoulder has formed, price continues down with a candle closing below the neckline (100%). Conservative traders set a Sell limit at the neckline (100%) with a stop loss at 50%. Both aggressive and Conservative traders close at least half of their position when price breaks below 200% Although I consider the H&S Structre completed once 200% is reached, the levels outlined in my system continue to effect price for days/weeks even months later.
BEducation
by Cryptsyxalt
XAG/USD EVERY SUNDAY LIVE ZOOM ANALYSISThe gold & silver market is pushing significantly higher, following a significant miss in the U.S. labor market with fewer jobs created in August. Friday, the U.S. Labor Department said that 235,000 jobs were created last month. The data was weaker than expected as consensus forecasts called for jobs gains of 720,000. While the headline data saw a significant miss, the Labor Department included substantial revisions to its June and July numbers. June's employment numbers were revised up by 24,000 to 962,000 from the previous estimate of 938,000. Meanwhile, July's data was revised up to 1.053 million jobs compared to the initial estimate of 943,000. However, some economists note that the strong revisions are not enough to take the full sting out of the disappointing headline numbers. Meanwhile, the U.S. unemployment rate dropped to 5.2%, down from July's reading of 5.4%. The unemployment rate fell in line with expectations. The gold market has broken through critical near-term support levels in initial reaction to the weaker-than-expected employment data. December gold futures last traded at $1,827.10, up nearly 1% on the day. Not only was job growth weaker last month, but positive for gold, wage inflation continues to creep higher. The report said that wages rose 0.6% in August, up from July's 0.4% increase. Economists were expecting to see a 0.3% increase. A lot of focus had been placed on the August employment numbers. Many Federal Reserve officials noted that a strong number could prompt them to launch their plans to reduce their monthly bond purchases. However, some economists say the disappointing data could force the central bank to delay those plans. "This disappointing report will make it a closer call than we expected for a September tapering announcement from the Fed," said Katherine Judge, senior economist at CIBC. Paul Ashworth, chief U.S. economist at Capital Economics, said that the latest employment numbers puts the Federal Reserve in a very difficult position. He noted that the economic data shows the COVID-19 pandemic and the spreading Delta Variant is impacting the current recovery. “Even allowing for the fact that first estimates for August often disappoint on the downside, the extent of the slowdown in jobs growth all-but rules out any tapering announcement at this month's FOMC meeting and, if this weakness persists, then it could be pushed into early next year. XAG/USD EVERY SUNDAY LIVE ZOOM ANALYSIS UK 18:00
OANDA:XAGUSDEducation
by globalsymmetrygroup
1
XAU/USD - CHART ANALYSIS - NFP ! The gold market still has a path to $2,000 in the second half of the year as the precious metal is undervalued in a world awash with liquidity, according to the latest research from Bloomberg Intelligence (BI). In a report published Wednesday, Mike McGlone, senior commodity strategist at BI, said that within the metals complex, gold appears to have the most potential when compared to other assets like copper and aluminum. "Copper and aluminum are reaching upper range price caps, but we see gold as a discounted bull market with improving fundamental underpinnings," he said in the report. "The copper-to-gold ratio has reached the highest level in about seven years and a rare disparity vs. declining U.S. Treasury bond yields, which we expect will be resolved by a resumption of the precious metal outperforming the industrial. Looking at aluminum, McGlone said that tightening supply and demand fundamentals are helping to push prices to $3,000 per tonne; however, similar to copper's run to $10,000, he added that aluminum’s rally appears to be unstable. He said that the industrial metal complex faces some challenging near-term hurdles. "Supply elasticity is proving strong for copper, indicating headwinds for the industrial-metal sector, but ESG, electrification and decarbonization trends should maintain the group's upper hand vs. most other commodities, with the exception of precious metals," he said. "Among the most supply-constrained commodities, gold and silver have the relative advantage heading toward the end of 2021 of having experienced sharp corrections within more enduring bull markets, as we see it." While there is plenty of bullish sentiment surging through precious metals markets, gold prices continue to struggle to find consistent momentum. The precious metal is holding support above $1,800 an ounce, but it has been unable to push above $1,820 an ounce. December gold futures last traded at $1,810.80 an ounce, down 0.29% on the day.
OANDA:XAUUSDEducation
by globalsymmetrygroup
History of ForexHistory of Forex We have come a long way from the previously practiced barter system to the modern-day system of trading currency. Following is a brief summary of the evolution of currency and how it gave rise to Forex Trading. Here are the main stages that are illustrated on the chart: 1️⃣The Ancient system of Trading - Trading with Gold As early as 6th century BC , the first gold coins were produced, and they acted as a currency because they had critical characteristics like portability, durability, divisibility, uniformity, limited supply and acceptability. 2️⃣Bank Notes Originated - Deposited Gold in banks in exchange for banknotes 3️⃣Role of Geography - Various banks of different regions printed different currencies Gold Standard - Currency pegged to gold In the 1800s countries adopted the gold standard. The gold standard guaranteed that the government would redeem any amount of paper money for its value in gold . This worked fine until World War I where European countries had to suspend the gold standard to print more money to pay for the war. 4️⃣Bretton Woods System - Currency pegged to USD The first major transformation of the foreign exchange market, the Bretton Woods System, occurred toward the end of World War II. The Bretton Woods Accord was established to create a stable environment by which global economies could restore themselves. It attempted this by creating an adjustable pegged foreign exchange market. An adjustable pegged exchange rate is an exchange rate policy whereby a currency is fixed to another currency. In this case, foreign countries would 'fix' their exchange rate to the US Dollar . 5️⃣Birth of Floating Currency - Currency that is not pegged to any assets or other currencies is known as a 'floating currency'. And what will be next? Very hard to say but blockchain technologies will make the system change again.
Education
by fxpremiere
7
Your Ultimate Guide to RSI DivergenceYour Ultimate Guide to RSI Divergence (Settings & Tips) Hey traders, Relative strength index is a classic technical indicator. It is frequently applied to spot a market reversal. RSI divergence is considered to be a quite reliable signal of a coming trend violation and change. Though newbie traders think that the application of the divergence is quite complicated, in practice, you can easily identify it with the following tips: 💠First of all, let's start with the settings. For the input, we will take 7/close. For the levels, we will take 80/20. Then about the preconditions: 1️⃣ Firstly, the market must trade in a trend ( bullish or bearish ) with a sequence of lower lows / lower highs ( bearish trend ) or higher highs / higher lows ( bullish trend ). 2️⃣ Secondly, RSI must reach the overbought/oversold condition (80/20 levels) with one of the higher highs/higher lows. 3️⃣ Thirdly, with a consequent market higher high / lower low, RSI must show the lower high / higher low instead. ➡️ Once all these conditions are met, you spotted RSI Divergence. A strong counter-trend movement will be expected. Also, I should say something about a time frame selection. Personally, I prefer to apply it on a daily time frame, however, I know that scalpers apply divergence on intraday time frames as well. ❗️Remember, that it is preferable to trade the divergence in a combination with some price action pattern or some other reversal signal.
Education
by fxpremiere
18
( Weekly Analysis ) GBP/JPY DailyMorning Godal Member's, Traders and Aspiring Traders . Todays shared post is a analysis on . Pair :GBP/JPY Time-Frame - D Biased - Bearish Very similar to previous post on NZD/USD with the double top but on this occasion this is a based on a large time frame continuation. Price has currently formed a head and shoulders at an identified major resistant trendline . A chart pattern deemed as a reversal pattern to some and the neckline has also been formed so based on this I will be waiting on a pull back for potential trades to the down side for the long run.
Education
by UnknownUnicorn18142411