Classic figures on Forex
- Analyst AZA
Classic figures of technical analysis on Forex
Technical analysis of currency markets is based on the definition of graphic cycles, the most accurate recognition of them. This is valuable for the trader: the ability to accurately recognize the graphic cycles and models helps the player make a price forecast and give an assessment of the price behaviour shortly.Market phenomena of this kind are called forex figures: each of the figures has its characteristics and several graphic features that have been modelled over time. We will study the basics of graphic models of the market in more detail and we will plunge into trading, built on them correctly.So, the figure of classical technical analysis on forex is nothing more than a set of graphical patterns that are created by the price chart. Based on the characteristics, it has several options for developing the trend in the future.The strategy of forecasting the currency market, which is based on price formation and has been successfully used by players for many decades. It has a high level of reliability, as it provides traders with the most accurate entry into the market, understandable levels of loss limitation and profit-fixing zones.All graphic models of the forex market are conditionally divided into three variants of figures:- continuations; This model indicates the continuation of the trend.- turn; The development of the pattern tells us about a change in the trend- breakdown.The signal is formed after a breakthrough: breakdown of the formation boundaries.The reasons for creating figures in the forex market are based on the psychology of the crowd (psychological barriers), which are identified on the charts in the form of movements inside trend lines or forming lines. The barriers themselves are formed in an artificial regime and are based on the actions of large speculators who choose positions (for further operations). Graphic models work out forex quotes because each time the crowd gets under the influence and is conducted to commit the same type of action.1. Figures of the continuation of the trend in the Forex market according to market and analytical laws, continuation patterns are formed in the middle of the trend: the leading formations of this group are flags and a cup with a handle.Such a figure as a flag determines a stop in the trend, that is, a pause in the trend when the price rushes and moves in the corridor between two parallel lines. For the most part, the motion process is carried out in the middle of the trend and continues until the breakdown of the resistance range itself. The price itself forms on the chart a formation: a figure that visually resembles a flag. On forex, flags can be different: be parallel, with a slope (up or down).Acup with a handle is a fairly rare continuation pattern. It is open not so long ago (about ten years ago). The model itself, in form, is similar to the details of the service. It is based on two elements - the base (the market movement is similar to the semicircle and the correction, which is represented in the form of a pen).The pattern allows us to find a clear entry point - if the resistance line breaks (it is created by the upper values of the formation).2. Turning FiguresTurning patterns are graphic models that indicate the plans for a trend to change its direction. In the foreign exchange market, there are four leading figures of the reversal. It's a diamond, a cup, a double top, a head and shoulders. The last two models can be found both directly and oppositely.The double top includes two price extremes that are on the same level and a correctional wave between the given points. This graphic model shows a signal for an input when the line is broken through, which is at the top of the correction. The future price approach is directed down at a distance that is identical to the height of the given vertices. The ratio of risk level to profitability for this figure is 1: 5 and even higher.Head and shoulders. The figure is formed on the chart of the market from three vertices - consecutive points, the average of which is higher than all the others.The inverse model is referred to as an inverted GIP(Head and shoulders). It is this figure that is considered to be wholly formed, and they begin to prepare for determining the entry point in case of breakdown of the base level (necklines ). With the help of this graphic model, you can earn good money, while the level of the stop-loss area will be minimal. Diamond is a model of a rhomboid shape, which is depicted by trend lines (there are 4 of them). It indicates a continuation of consolidation in a limited range. After breaking through, and then retesting the price limits, players enter a position in the opposite direction from the previous trend. It is estimated that profit can be equal to the height between the central points of the pattern. This is quite a rare phenomenon in the markets, but with its uniqueness, the diamond has a high level of signal processing.3. Breakdown patterns/p>They are also popular in technical analysis of the market. The name they deserved by the fact that the price can break one of the two boundaries of the formation. Using market tactics to breakdown, you need to pay great attention to the price charts. The presence of a retest of the broken border tells us about a large reduction in risk (before the opening of the order to breakthrough).So, breakdown models:1) the forex triangle there are such types:-increasing;-symmetric;-outgoing;-divergent.It is triangles are in the ranking of top-end figures on forex, and the model itself is formed on all trading instruments and is considered on the timeframe of at least H1. The creation of this pattern is fully completed after the price goes beyond the most remote extremum of the triangle.Wedge- this figure is a model with a slope (up or down), the range of which is placed between the trend lines, which gradually narrow. In comparison with other figures, the wedge is created more durable, giving traders a chance to be well prepared for opening deals. Once the breakdown is true, then the design will be final.The divergent triangle. This model is formed by price movement in the range of support and resistance lines, which is expanding. This is a rather complex graphic design, especially for a beginner market player: this is because it is not always possible to determine its end as accurately as possible.Figures of the technical analysis of the market are characterized by positive characteristics and capabilities due to reliability, stability and high accuracy of signal processing. The level of losses is almost minimal.Understanding graphic models, you can easily remove worthy earnings from the game on the stock exchange.
The strategy of forecasting the currency market, which is based on price formation and has been successfully used by players for many decades. It has a high level of reliability, as it provides traders with the most accurate entry into the market, understandable levels of loss limitation and profit-fixing zones.