Ribbon Bollinger

Forex Education Center- Ribbon Bollinger,Graph Bollinger or better known as Bollinger Bands are one of the indicators in technical analysis (analysis of market movements to read through the chart) were found by John Bollinger in the 1980s. Bolinger chart is a development of the concept of trading bands that can be used to measure the height limits of humility or the limits on stock price relative to the previous price. 

Bollinger chart consists of

Center line which is the period N of simple movements. 

The line up on the K time period N standard deviations above the middle line 

The bottom line on K times the standard deviation below the Period N intermediate line 

Specific values ​​for N and K, respectively, are 20 and 2, respectively. 

The use of graphs Bollinger

Bollinger charts can not be used as a stand alone without the use of other indicators such as using the Relative Strength Index indicator or better known as the Relative Strength Index (RSI). By using this chart, the Bollinger with RSI indicator can be obtained by a sale or purchase, for example: 

If the RSI is above the 80 and if the narrowing Bollinger charts and prices tend to be flat, so in these conditions when the RSI formed a bearish divergence signal then is a right moment to sell. 

If the RSI is below the number 20, and if the narrowing Bollinger charts and prices tend to be flat, so in this condition when the RSI bullish divergence forming it is a good time to make a purchase.

Dimensional analysis

Dimensional analysis is a conceptual tool often applied in physics, chemistry, and engineering to understand the physical state of the physical quantities that involve different. Dimensional analysis is routinely used in physics and engineering to check the accuracy of a decrease in the equation. For example, if a physical quantity has units of mass divided by unit volume decline but equality of outcome only load unit mass, the equation is not exactly clear. Just the same dimensionless quantities that can each be added, subtracted, or equated. If the magnitudes are different dimensions in the equation and each other is limited sign "+" or "-" or "=", the equation is not possible; The equation must be corrected before use. If the quantities of the same or different dimension multiplied or divided, the dimensions of these quantities are also multiplied or divided. If the amount raised to dimension, the dimension of these quantities are also raised to.

Dimensions, quantities, and unit

Dimensions of physical quantities are represented by symbols, such as M, L, T representing the mass, length (the possibility of an English term: length), and time (the possibility of an English term: time). As there is a derived unit which is derived from the base unit, there are basic dimensions of physical quantities of primary and secondary dimensions of scale derived from the basic dimensions of the primary. For example, the dimensions of magnitude speed is distance / time (L / T) and the dimensions of the force is mass × distance / waktu² or ML / T2. 

Unit and a variable dimension of physics are two different things. The units of physical quantities defined by the agreement, relating to a particular standard (for example, the length scale can have units of meters, feet, inches, miles, or micrometer), but only one-dimensional length scale, namely L. Two different units can be converted to each other (example: 1 m = 39.37 in; 39.37 figure is referred to as a conversion factor), while no conversion factor between code dimensions. 

Below is a table showing the dimensions and scale of seven basic units in the SI system.

Momentum (technical analysis)

Momentum and rate of change (rate of change, ROC) is a simple indicator in technical analysis showing the difference between today's closing price and the closing price n-days ago. Momentum is the difference occurs. 

 mathit  momentum =  mathit closure _  mathit today , this} -  mathit closure _ N ,  mathit days , then 

Scale level changes measured by the closing price of the old one to describe the increase as a fraction of: 

mathit rate , change =  mathit closure _  mathit today , this} -  mathit closure _ N  mathit days  and  over  mathit closure N _  mathit days , then

Momentum in general is the price which is a continuation of the trend. And the rate of change of momentum indicators show a positive value when the price increases and a negative value when the decline in prices. 

Crossings rise up through the zero value can be used as an indicator buy signal, and vice versa at crossings dropped down through zero is a sell signal indicator. How low (when negative) or high (when positive) indicator can show how strong a trend. 

The way momentum shows the absolute change for example if there is an increase of 300 throughout the 20 days, which shows that the rate of change as 0.25 for a gain of 25% over the same period.

The Types of Technical Analysis Indicators

Indicators of technical analysis  

Some technical analysis tools are widely known use is as follows: 

Average true range - the daily trading price range 

Coppock - Edwin Coppock developed the Coppock Indicator for the usefulness of which is to identify the start of the upward trend in the market (bull market) 

Dead cat bounce - This describes the recovery while the price of a stock or the market in the midst of a prolonged decline or bear market. That is, the rebound experienced by the market or a stock after a fall of prices, in fact only temporary as the market or the stock will continue to fall. 

Elliott wave principle and the golden ratio (golden ratio) to calculate the price movements 

Patron Hikkake - patron to identify reversal and continuation of motion 

Momentum - the value of the price change 

Point and figure charts - charts based on price to the exclusion of time 

CPV rank - patron to identify reversal by using indicators of volume and price as the indicator. 

Indicators used in a way menumpukkannya / combine it with the price chart: 

Resistant - an area in which an increase in sales 

Support - rea where an increase in the purchase 

Breakout - when prices pass through and hold above the area of ​​support or resistance 

Trend line - a line indentation of support or resistance 

Channel - a pair of parallel trend lines 

Moving average - from a price 

Ribbon Bollinger - price volatility ranges 

Pivot point - a calculation using the average value of the lowest price, and the highest closing price 

Indicator price is usually placed below the price chart 

Index accumulation / distribution-based on the closing price of a certain time span 

Commodity Channel Index - is an indicator used to measure a wide range of average price statistics. A high value indicates that prices are abnormally higher than the average price 

MACD - konverjensi / diverjensi moving average 

Parabolic SAR - 

Relative Strength Index - shows the oscillator strength of the price 

Rahul Mohindar Oscillator - an indicator for identifying trends 

stochastic Oscillator 

Trix - oscillator 3 shows the curve of the average movement developed by Jack Hutson in the 1980s 

Volume-based indicators: 

Money Flow - the amount of shares traded when the price moves up 

On-balance volume - the momentum of buying or selling shares 

PAC charts - two-dimensional method to create the chart ranked by volume too big

History Of Technical Analysis

Forex Education Center- History  Of Technical Analysis,The oldest example of technical analysis is that developed by Homma Munehisa in the early 18th century using the technique of candlestick charts (candlestick chart) which is the main analytical tool at this time  

Dow Theory is based on a collection of writings written by Charles Dow who is the founder and editor of Dow Jones, which became the source of inspiration of the development of modern forms of technical analysis in the early 19th century There are also Ralph Nelson Elliott and William Delbert Gann also develop their technique in the early 20th century still many technical analysis tools and theories that have been developed in recent decades due to the growing use of computers as a tool. 

Criticisms Of technical analysis

Benyak criticism of technical analysis made ​​by the well known fundamental analysts such as Peter Lynch, commented that "The graphic is very good for predicting the past". Warren Buffett says that "I realized that technical analysis is not useful when I invert the graph so that the top is under and I did not find anything different answers and if past history are reflected there then that would be the richest man is the librarian" 

Most academic studies of technical analysis states that only have a small predictive power, but some studies suggest that technical analysis can be profitable. Cheol-Ho Park and Scott H. Irwin studied 95 modern studies on profitability and stated that 56 of whom were found positive, 20 negative test result and 19 indicated yield mixed results. " 

An influential study conducted by Brock et al. in 1992 which showed support for technical trading techniques in a way that has been tested for the surveillance data and other problems in 1999 

After that, a comparison study conducted by an economist named Gerwin Griffioen Amsterdam concluded that: for the American market, Japan and some Western European markets indicates that the forecast does not show favorable results after implementing little transaction costs. "

Of appropriate market hypothesis 

Hypothesis of appropriate markets or in foreign terms is known as the efficient market hypothesis (EMH) is a contradiction to the teachings of "technical analysis" is the principle that past prices can not be used to predict future prices. or in other words it is said that technical analysis is not effective. Eugene Fama an economist, published an essay that was published in the Journal of Finance in 1970, said that "In a short period, supporting evidence of appropriate market model will expand and become something unique in the world economy and contrary evidence against the wane. "Proponents of the EMH states that" if a price can quickly describe all relevant information, then there is no method (including technical analysis) can be "against the market". "

Experts say that EMH ignores the way markets work in which many investors rely on profit hopes or past performance. For the future price of a stock can be influenced strongly by the hope / expectation of investors, experts expressed hope that following the above prices in the past can affect the future price. 

Irregular step hypothesis

Hypothesis irregular steps or in a foreign term better known as Random walk hypothesis [23] which is another form of the hypothesis of appropriate market, which is based on the assumption that market participants fully utilize all the information on price movements in the past (but do not need to use general information other). 

Technical experts state that EMH theory and the theory of irregular steps, they will override the realities that occur in the market in which market participants act rationally where they could just be greedy, excessive fear of risk, and others. and price movements that occur when the current is dependent on previous price movements 

General Explanation of Forex Technical Analysis

Forex Education Center- General Explanation of Forex Technical Analysis,Technical analyst (or analyst) attempts to identify patron prices and trends in financial markets and seeks to exploit the patron . In the use of various methods or techniques then they put the price chart studies. The analyst tries to find prototypes patrons such as the reversal of the patrons who are already very well known by the English term head and shoulders (patron shaped like the head and shoulders), and also learn a variety of patrons such as price, volume, and moving averages of prices. Some technical analysts also use a psychological indicator of investor sentiment. 

Technical analysts also often use a variety of indicators which are typically mathematical transformations of price or volume. This indicator is used as a tool to determine whether an asset is within a trend and direction of asset prices in the tern. Analysts also studied the correlation between price, volume, and margin in futures trading. These indicators such as relative strength index, and MACD. Another study also using the correlation between the change in the option and a put option / buy and its price. 

Essentially, technical analysis study analyzes two areas of psychology that is investment and market analysis of supply and demand. The analysts attempt to forecast price movements in order to gain success in the trade as well as minimize the risk of loss as well as generate positive returns in the future by way of risk management and financial management 

Many ways of learning technical analysis. The followers of the way of learning different techniques (eg candlestick chart, or more widely known by the term candlestick charts, Dow Theory, and Elliott wave theory often ignores the other approaches, but many are also combining some elements of learning. Analysts usually decide to using learning methods which are appropriate based on experience of what is reflected from an instrument at a particular time and what the meaning of patrons formed in the future. 

Technical analysis is often contrasted with fundamental analysis is the study of economic factors that some analysts believe could influence prices in financial markets. Technical analysts believe that prices already reflect all such influences before investors realize the economy. Some traders use one of the fundamental technical or other exclusively, but some incorporate both in the analysis.