Types of Technical Indicators

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Technical indicators are grouped into two main classifications: oscillators or leading indicators and momentum or lagging indicators. Moving averages, as discussed in the previous section, typically fall under the category of lagging indicators but the parameters can be modified or shifted to allow it to act as a leading indicator.  As the name suggests, leading … Continue reading Types of Technical Indicators

Using Momentum or Lagging Indicators

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As opposed to leading indicators which generate early trade signals, momentum or lagging indicators give confirmation signals when the trend has already found directional momentum. Because of that, lagging indicators are also known as trend-following indicators. One of the most basic examples of lagging indicators is the moving average crossover system. This can employ either … Continue reading Using Momentum or Lagging Indicators

Basic Forex Chart Formations

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Aside from technical indicators and Japanese candlestick patterns, another main component of technical analysis is chart formations. Remember that the concept behind technical analysis is that price patterns tend to repeat themselves, which means that these chart patterns more or less result to the same price behavior later on. The sheer number of classic chart … Continue reading Basic Forex Chart Formations

Elliott Wave Analysis 101

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A combination of repeating price patterns with Fibonacci analysis yields another branch of technical analysis known as Elliott Waves. This is named after its founder Ralph Nelson Elliott who analyzed 75 years’ worth of stock data before formulating and compiling his theories in a book entitled The Wave Principle. He discussed how price movements are … Continue reading Elliott Wave Analysis 101