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THE USE OF TEHNICAL INDICATORS

Trend Lines

Trend lines identify and confirm the trend. A trend line put together two or more levels of prices and expands in the future to check its support or resistance role. A positive trend line has an ascending inclination and puts together two or more minimum level of prices.The next minimum level has to be higher than the former .The positive trend lines action as a support. A negative trend line has an descending inclination and puts together two or more maximum level of prices.The next maximum level has to be lower than the former one .The negative trend lines action as a resistance.

Moving Average

It is one of the basic and often used indicators by the traders.It helps in checking the present trend,to indentify the increasing trends and to notice if the trends will invert.
-moving average are lines on a graph which show the trend throughout a long period of time.
A trader can create a moving average of a currency for 5,15,30 days and include them on his price graph.To create a moving average the traders can use information,as follows :close price vs.open price vs.max/min/close and so on.After this procedure the lines are created to display the moving average of a currency for 5,15,30 days.
After determining the moving average for a currency, this line can be used as a support or a resistance line.The break of this line could be used as a sign that the currency is going to change the trend.

Stochastic Oscillator

It is an indicator which consists of two lines:
- the main line( %K)
-a second line(%D) which is dashed and is the moving average of %K
Interpretation:
-buy when %K or %D falls under a certain level(20 for example ) and then increase above this level or sell when %K or %D increase above a certain level(80) and then falls under this level.
-buy when %K increase above %D and sell when %K falls below %D.

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Relativ Strenght Index (R.S.I.)

-compares the increase and decrease of prices on a certain period of time.(14 days for example)
It generates 3 types of signals:

Bollinger Bands

-are an indicator which analyze the volatility of prices and consist of 3 moving lines:
a. a simple moving average(SMA) in the middle
b.a superior band formed by SMA +2 standard deviations
c.a inferior band formed by SMA -2 standard deviation
Interpretation
-a moving of prices outside the bands means that the trend continues to increase/decrease.
-in the same time we can use RSI,MFI(Money Flow Market),to confirm the signals given by Bollinger Bands.A level of overbuying given by RSI corroborates with the price on the superior band is a clue of selling and a level of overselling given by RSI and a price which is on the inferior band means to buy.

Fibonnaci Series

-forecast trend changes as the prices are closing by the lines created by Fibonnaci studies.After an important price movement(up or down) the prices will remake an important part of the initial movement.

Support and Resistance

Support :
--is the level of price where BID is strong enough to prevent a depreciation.
Resistance:
-- is the level where ASK is strong enough to prevent an appreciation.

MACD(Moving Average Convergence/Divergence)

It Is a trend indicator and consists of two lines:a continue line(MACD line) and a dashed(signal line)
-if the trend became stronger the difference between the two lines will increase Interpretation:
--buying signal:MACD crosses up the signal line.
--selling signal:MACD crosses down the signal line.
Bearish Divergence appears when prices increase very much but MACD decreases.
Bullish Divergence appears when prices decrease very much but MACD increases.

Elliot Waves

The Elliott wave theory is based on repetitive wave patterns and the Fibonacci number sequence. An ideal Elliott wave patterns show a five-wave advance followed by a three-wave decline.

 
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