Technical Analysis Basics Analysis - Trading Alternative methods Examples Discussion.
-
date post
18-Dec-2015 -
Category
Documents
-
view
221 -
download
2
Transcript of Technical Analysis Basics Analysis - Trading Alternative methods Examples Discussion.
The market discounts everything
TA is...
• a research approach, using only historical prices.
• the study of prices, with charts being the primary tool.
• a self fulfilling prophecy.
The market discounts everything
TA assumes that…
• every information is in the market.• we cannot predict the future, but react on the
market.• we don’t ask for the ‚WHY‘, but for the
‚WHEN‘ and ‚WHERE‘.• we don’t want to understand the market, we
just want to make money with it.
Implications:
Effect of disposition
open positionLOSS PROFIT
-100
-2010
20
0
Risk-seeking -> HOLD Risk-aversion -> GET OUT
Simple tools
Retracements
Using the Fibonacci - numbers:0, 0.382, 0.618, 1
often also used: 1/3, 1/2, 2/3
Systems
• defined entry-signals
• winning trades - defined exit-signals
• loosing trades - defined exit-signals
• money management
Fibonacci numbers
• n 1 2 3 4 5 6 7 8 9 10 11 12 13
• F(n) 1 1 2 3 5 8 13 21 34 55 89 144 233
• F(n) = F(n-1) + F(n-2)
• for n: F(n-1) / F(n) = phi = 0.61803…
Elliott Wave Theory
• 5 waves in direction of main trend
• 3 corrective waves
• The underlying 5-3 pattern remains constant, though the time span of each may vary.