Technical Analysis

Technical Analysis

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The following cheat sheet will help you to identify the most common technical patterns that appear in forex charts. Click each heading for more information.

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The descending broadening wedge is easily spotted on a chart. It looks like a megaphone with a downwards tilt. It’s equally likely to appear in downtrends as well as uptrends.

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The ascending broadening wedge is a chart pattern that can be traded in several ways; either as a bullish/bearish breakout or with a swing trading strategy.

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A broadening wedge is a range where the price is holding between two trend lines that are moving apart. The pattern is also named a "megaphone" because of its shape.

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When using channels it’s good to know how spot the first signs of a price channel breakout - either if you are trading the range or the breakout itself.

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Both rectangles and price channels appear in virtually all forex charts. Price channels can provide excellent opportunities for trend trades.

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A bullish engulfing candlestick can be a useful buy signal. But in order to trade them we have to be able to recognize reliable patterns from the false ones.

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If you’d blindly traded the bearish engulfing candle over the past decade, you’d probably have done slightly worse than if you’d traded on a coin flip.

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Crossing support and resistance lines meet at so called convergences or confluent areas. Is there anything significant about these areas?

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The first step in trend trading is spotting key support and resistances. This post looks at trend trading with support, resistance and confluence lines.