Technical analysis provides powerful tools that can be used to explain price movements in markets. Technical indicators are a significant part of technical analysis. Technical analysis may initially seem complicated but learning to use these tools provide you with trading opportunities that can make the sacrifice of studying them more than worth it. Read more
Gold was used as a currency for many centuries. The gold standard-based system of exchange rates called Bretton Woods was established after World War II, but collapsed when Richard Nixon ordered that U.S. dollars would no longer entitle to holders to receive gold. This allowed the U.S. to print money without being limited by their dwindling gold reserves. While much of the world has completely abandoned any backing of their currencies by the metal, gold still has a significant effect on the currency markets even today. Read more
The Euro acts as a sort of anti-dollar in the currency markets. There are many factors that affect its ability to compete against the U.S. dollar. Listed below are some news events that cause the Euro to move against other currencies. Read more
Similar to Bollinger Bands, Keltner channels form bands around a moving average to illustrate the volatility present in the market at a given time. Unlike Bollinger Bands, which use standard deviation to measure volatility, Keltner channels use an indicator called the Average True Range, or ATR. ATR was developed by J. Welles Wilder, who also developed the Parabolic SAR, the Relative Strength Index (RSI) and the Average Directional Index (ADX). Read more
What is Technical Analysis?
Technical analysis is one of the ways traders, in any market, explain and make sense of price. Traders use the principles of technical analysis to help them explain what has happened in the past and also to predict what will happen in the future. The other school of thought in explaining and predicting market action is fundamental analysis. This involves understanding the underlying forces that drive price—such as profits or revenue in the case of a stock, or interest rates and GDP in the case of a currency. This article will focus on one aspect of technical analysis—chart patterns—and we will provide an overview of some common chart patterns and why they work. Read more