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Stocks & Commodities V. 33:02 (10-14): Trading Forex: More On Charting by Imran Mukati
Stocks & Commodities V. 33:02 (10-14): Trading Forex: More On Charting by Imran Mukati
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Trading Forex: More On Charting by Imran Mukati
Between The Price Bars
In the fourth part of this six-part series, well look at some of the more common chart patterns, moving averages, indicators, and Elliott wave theory.
In part 3, I touched upon some of the common candlestick chart patterns that you are likely to encounter when looking at currency charts. In this article, Ill continue examining technical analysis by looking at some other tools that can be useful when trading the forex markets.
DOUBLE TOPS & BOTTOMS
The first patterns Ill consider are double tops & double bottoms (Figures 1a & 1b). These patterns share similar characteristics with the head & shoulders pattern. The double top is a bearish signal, formed when a currency pair hits a resistance level, fails to break through, and attempts to break it again. After the second failure, the price falls. The point to which the price falls between these two peaks is the neckline. While it might look like a support line, it really isnt much of onesomething that becomes clear after the currency falls from its second peak and blows right through the neckline.
Between The Price Bars
In the fourth part of this six-part series, well look at some of the more common chart patterns, moving averages, indicators, and Elliott wave theory.
In part 3, I touched upon some of the common candlestick chart patterns that you are likely to encounter when looking at currency charts. In this article, Ill continue examining technical analysis by looking at some other tools that can be useful when trading the forex markets.
DOUBLE TOPS & BOTTOMS
The first patterns Ill consider are double tops & double bottoms (Figures 1a & 1b). These patterns share similar characteristics with the head & shoulders pattern. The double top is a bearish signal, formed when a currency pair hits a resistance level, fails to break through, and attempts to break it again. After the second failure, the price falls. The point to which the price falls between these two peaks is the neckline. While it might look like a support line, it really isnt much of onesomething that becomes clear after the currency falls from its second peak and blows right through the neckline.
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