Technical Analysis

Forex Education center- technical analysis,technical Analysis or better known as technical analysis is an analytical technique known in the financial world that is used to predict the trend of a stock price by studying past market data, primarily price and volume movements, At first technical analysis only takes into account price movements market or instrument in question, assuming that the price reflects all relevant factors before an investor aware of through various other means. Technical analysis can use different models and base, for example, to use the method of price movements such as the Relative Strength Index, Index moving averages, regressions, inter-market correlations and intra-market, cycle or the classic way is to analyze the pattern of the graph. 

Technical analysis is widely known among traders of shares (or known as "traders") and professionals in finance, but in the academic world is regarded as a pseudoscience  or "voodoo finance;" it receives little or no direct support from academic sources and is Considered akin to "astrology." 

Academics such as Eugene Fama say that the proof of this technical analysis is very thin and inconsistent which is "shortages" of the technique is generally accepted that the efficient market hypothesis The Economist named Burton Malkiel argues that "technical analysis is something that is forbidden (anathema) in the academic world "and then he says also that" in the form efficient market hypothesis is weak then engka will not be able to predict future stock prices based on past prices "."

In the foreign exchange market, technical analysis is more widely used by practitioners than the use of fundamental analysis. Several internal studies indicate that technical trading rules can generate consistent returns in the period up to 1987,  most of the academic research focuses on the nature of the anomalous position of the currency market There is speculation that this anomaly occurs as a result of central bank intervention. 

Interpretation Forex MACD Indicator

Forex Education Center- Interpretation Forex MACD Indicator,MACD is an indicator of followers symptoms (trend following) and is designed to identify changes in symptoms (trend), and are generally not recommended for use in volatile market conditions. Three forms of trading signals can be obtained as follows: 

MACD line crosses the signal line. 

MACD line crossing zero. 

The difference between price and MACD levels. 

Crossing signal is an ordinary trading rules where this is a buy signal when the MACD crossed above signal line break or become a sell signal when the MACD crosses down. This crossing can often happen that other studies should be done to ensure the buy and sell signals. 

Histogram shows the crossings when the happens, when the MACD line crosses through zero on the histogram, it can be said that the MACD signal line has been penetrated. This histogram can also help reflection when two lines coming together. Both may still occur but the coming together, so that the histogram that falls can be a sign that the crossing could be approached. 

Positive difference between the MACD and price arises when price forms a new low sale price, but the MACD does not establish a new low point. It can be interpreted that the market tends to rise (bullish) where symptoms decrease was approaching. Negative difference is similar, where the price went up but the MACD does not rise as high as before then this means that the market fall (bearish). 

It is recommended to use the MACD on the weekly scale before seeing it in the daily scale in order to avoid short-term trade does to the direction of the intermediate frame symptoms.

MACD Forex Indicator

Forex Education Center- MACD stands for Moving Average Convergence / Divergence (moving average konvergention  / difference), which is a technical analysis indicator created by Gerald Appel in the 1960s. MACD is an indicator for excess buying or selling excess by looking at the relationship between the MA (moving average = moving average) long-and short-term. The MACD line is the difference of 2 MA above. The second line is a line is a sign of the short-term MA of the MACD line. 

MACD shows the difference between the exponential moving average (exponential moving average is commonly abbreviated as "EMA") that rapid and slow closing price. Some development has been done on the MACD for years but still leaves the problem of delay in the indicator, so often criticized for its failure in response to weak market conditions or turbulent. Since the collapse of the market "dot-com" in 2000, most strategies no longer recommend the use MACD as a primary method in the analysis, but only used as a mere observer. Standard period suggested by Gerald Appel in the 1960s is to use the 12 and 26 day periods: 

MACD = EMA  , price - EMA , price 

The signal line or trigger line is formed by refining the formula is then formed by the smoothing this with a further EMA. The standard period for this is 9 days, 

signal = EMA, MACD 

The difference between the MACD and the signal line is often calculated and expressed in the form of lines but not in the form of a histogram containing box. This construction was made by Thomas Aspray in 1986 Method of calculation: 

histogram = MACD - signal 

In the example chart above, shows all three simultaneously. The graph above is the price, which is below the graphs have the blue MACD line and the signal line in red and white in the form of a histogram is the difference between the two. 

The set of periods of average values ​​are usually written as 12,26,9, and may vary. Appel and other analysts have been experimenting with various combinations.

Alligator Indicator

History Of Alligator

Alligator, which is also called "the Crocodile Market", is an indicator that was created by a professional trader named William S. "Old Bill" Williams. He was born on January 3, 1787 in Horse Creek, North Carolina, United States. 

During his life he served as registrar and border guards. On the sidelines of his job, he began to develop an indicator to facilitate his work, in which the indicator can detect the movement of the enemy from the border. Indicator which is the forerunner to the Alligator indicator, which is currently used by traders in trade transactions. Williams once said, "... the market (the market) has a structure that's messy. If we can understand the structure then we can reap huge profits." 

Williams died at the age of 62 years, when the soldiers were ambushed and killed by Ute in 1849 Prior to that, he returned to Taos to help trace the expedition team is stuck ice on Mount Sangre. 

To preserve it, was made a 8 foot high monument is made of bronze with the title "Bill Williams Monument Park" near the park Arizona, United States. Monument was established in 1980 by Pettit BR, nationality American citizens. Bill Williams' life as a member of Osage (border guards)

Working Principle Alligator Indicator 

In principle, Alligator made ​​of 3 Moving Averages (MA), among which are: 

1 MA called Blue colored "Jaw Alligator" (Jaws Period: 13 Shift: 8) 

Describing the current market conditions at the time the current frame we use. Example: when we use TF D1 

2 MA Red color called "Alligator Teeth" (Teeth Period: 8 Shift: 5) 

Describe the market conditions at the fifth time frame MA Blue. Example: if earlier we use TF D1, then the fifth TF is TF H1 

3 MA Green color is called "Alligator Lips" (Lips Period: 5, Shift: 3) 

Describe the market conditions at the fifth time frame MA Red. For example, if the red MA as TF H1, then at the green MA is an overview of the TF M5.

Third Air-MA method: Smoothed; Apply: Median price HL / 2. If there is a trend buy the candle is on top of the Alligator's mouth, while the trend in case of sell the candles are on the bottom of the mouth of the Alligator. 

Characteristics Of Alligator Indicator

Alligator indicator is an indicator of the characteristics of the group "Langging", where it goes to bring up the signal when the price has moved, or in other words the signal that appears more slowly than the price in the candlestick. Traders use this indicator as a compass to see if the market is in a state trending or sideways. 

Recommended Settings of alligator indicator

The parameters of the method consists in the Alligator 13, 8, and 5, but the author would recommend: 

1 MA blue: 8 

2 MA Red: 5 

3 MA Green: 3 

The reason the change in MA, because much smoother and faster than the signal indicating default on Alligator innate metatrader.

The advantages of the Alligator indicator is: 

1 Able to detect the momentum of a market 

2 could mark the end of a trend 

3 Simple 

Can be used on all 4 pairs and time frames 

5. can protect the entry of non-trending market 

Disadvantages of Alligator indicator is: 

1 Signal can not be used on the sideway 

2 Late 

Backtest of alligator indicator

You can see an example of the Alligator indicator that the setting has been modif, below:

Conclusion 

Alligator indicator can be used to determine trends, both long-term trends and short-term. Even so, you need to be vigilant and carefully considering the Alligator indicator is a lagging indicator that additional indicators are needed in the transaction, such as RSI.

How to Use Momentum Indicators

Momentum indicators measure the speed and magnitude of price changes within a certain time period. In general, the momentum indicator will rise when the direction of the trend is strong, and vice versa will go down when the trend is weakening. In this article we review the use of momentum indicators are original, not derivative such as the Commodity Channel Index (CCI), Relative Strength Index (RSI), or stochastics. 

Momentum indicators are also commonly referred to as Rate of Change (ROC). Dikur momentum in a given period of time with the formula: 

Momentum at time period n = (today's closing price / closing price at period n) x 100 

The default time period that is often used is 14. 

In general there are three ways to use momentum indicators, namely: as a trend following indicator, as an indicator of a trend reversal (trend reversal) and as a leading indicator to the cue divergence occurs.

1. Determine the direction of the trend with momentum indicators 

In the Metatrader trading platform, using momentum indicators as a reference level of 100.

if the momentum indicator curves cut the 100 level from bottom to top, then the movement will tend to be bullish, and vice versa if the cut off level of 100 from top to bottom then the movement will tend to be bearish. To filter (filtering) the direction of the trend in order to obtain a high probability entry momentum, can be used indicator simple moving average (sma), such as the 20 period sma example EUR / USD daily above. 

2 As an indicator of the direction of the trend continuation or reversal of a trend 

In this case the momentum indicator can indicate overbought and oversold levels such as RSI or stochastic, but because of the level of overbought and oversold zones can not be determined (relative), then we must consider assuming certain extreme conditions. If the momentum indicator reaches the highest or lowest level (relative), we have to assume direction of the trend will continue as before until the movement of the price change. 

For example, if the momentum indicator reached its highest level and then down then we assume the price will still go up, and we will only sell if the entry price has really come down. To be safe can also be confirmed by the moving average indicator.

In the above example the direction of the arrow indicates the direction of the trend continuation because price movements are still above the moving average line curve. 

3 Seeing cues of divergence between price movement and direction of movement of the momentum indicator 

The following example is a bullish divergence (blue line) and the bearish divergence (red line).

Bullish divergence signaled trend reversal (from bearish to bullish) is if the movement showed a low level that is lower than the previous (lower low), while the momentum indicators show low levels higher than previous lows (higher low). 

Bearish divergence signaled trend reversal (bullish to bearish on) is if the movement showed high levels higher than previously (higher high), while the momentum indicators show a high level that is lower than the previous high level (lower high).

Markets Have Memory Pattern

Markets never forget, or rather have memories. By naked eye you can see the levels of support and resistance that proved this. Markets never forget the moments of the start of a significant movement. How many times have you observed price movements experienced a correction and back again to a level or area where the movement started? 

Sometimes prices ranging move around that level before continuing or reverse direction. This incident in the history of repeated movement of any currency pair, and if you understand why this is the case you certainly will not have trouble again in anticipation of market price movements. 

Forex trading is about probabilities, so it is not like measuring or calculating something definite and absolute. The market will always remember every significant movement he made. It is a high probability but not always. However a high probability can be used as an assumption. 

Clear evidence of the high probability seen in the formation of the bar (candlestick) or the formation of price movements (price action) occurs. Price action is a signal of the direction of the next movement. The combination between the assumptions and the formation of price action can give a clear indication of the price movement and trading signals with a high probability. 

Here's an example of the daily chart stock index DAX30 (Germany):

Key resistance level (key resistance) formed between 9735.00 to 9700.00. Area between the key resistance level and downward price movements are significant in this case referred to as 'events area'. Trading signal does not have to occur at the level of the key, but can also be at the event area. As in this example a pin bar reversal looks formed on the event area is a signal to sell. 

After 12 days of re-formed pin bar reversal in the event area and move the price back down. This suggests that the market is never forgotten and always respect levels and also key events that formed the area. If a trader has understood this then he will be able to anticipate when the signals are formed at levels key events in the area. 

Entry is based price action signals that occur close to the level of resistance or support and event area is usually safer and often true. This is because the situation was confirmed by the memory market.