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A pennant is a triangle-shaped chart pattern formed by consolidating price action following a directional market move or trend. Pennants are classified as continuation patterns, meaning their presence acts as a signal that the market is merely taking a pause, and the preceding trend has a good chance of extending its range in the near future. Market Conditions In general, chart patterns have the most predictive value when they exhibit…
In the realm of technical analysis, a "flag" is a chart pattern that illustrates a temporary pause or compression in directional price action. A flag is classified as being a "continuation" pattern, suggesting that price is likely to resume movement in concert with a previously defined trend. Flags are widely accepted by long-term, swing and intraday traders as signals of potential breakouts. In addition, they provide technical traders a means…
Brief History Of Trading By definition, the term "trade" is the act of buying, selling, or exchanging goods with other parties. Dating back to the beginnings of human civilisation, "trade" has been the apparatus by which people have exchanged valued assets in an attempt to prosper or survive. The instrument of trade is credited with linking different cultures and acting as a conduit for the transmission of culture and ideas.…
The death cross and the golden cross are technical indicators that traders use in attempt to predict bearish and bullish market momentum.
The average directional index (ADX) is a charting tool that judges trend strength. It was formulated by market technician J. Welles Wilder and presented in his 1978 book New Concepts in Technical Trading Systems, along with the minus directional indicator (-DI) and the plus directional indicator (+DI). Trading on a price trend can be profitable, but for some it may also be nerve-racking, especially given uncertainties in market movements that…
A golden cross is a technical indicator that investors use to predict bullish market momentum and it forms when a security’s short-term moving average rises above its long-term moving average.
A death cross is a technical indicator that traders use in an attempt to predict bearish market momentum.
The Ichimoku Cloud is a central element of the Ichimoku chart technical analysis system aimed at forecasting price trends through a multi-dimensional visual representation of support and resistance levels. Ichimoku Kinko Hyo Since technical analysis came into common use in the 20th century, numerous charting systems have come into popularity. Many have specific strengths for given situations and purposes, such as identifying trend direction, support and resistance, and gauging price…
In forex, "rollover" refers to the value of accrued interest on a spot currency position during the overnight holding period. Interest rates, leverage, investment horizon and the currencies being traded are instrumental in quantifying rollover. When Is Rollover Calculated? In forex, rollover is calculated for application to an investor's trading account Monday through Friday at 5 p.m. Eastern Standard Time. On weekends, the forex market is closed for business, but…
What Is Forex Arbitrage? Forex arbitrage is defined as "the simultaneous purchase and sale of the same, or essentially similar, security in two different markets for advantageously different prices," according to the concept formalised by economists Sharpe and Alexander in the 1990s. Given the popularity of forex trading, arbitrage strategies are implemented by thousands of participants around the world. Accordingly, someone who practices arbitrage is known as an "arbitrageur." Simply…
When trading in forex (as with trading in any asset), market participants will want to follow the age-old recommendation to "buy low and sell high." To do this, they will clearly need to develop a rationale and trading strategies designed to enter the market when asset prices are low. But what about the other end of the trade? When is it an appropriate time to get out? Many market participants…
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