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Too many times I hear about new traders opening a trade using the 5-minute chart (not my favorite approach) and when the market moves against them, they move to the 15-minute chart to justify staying in a little longer, hoping that the market will turn around. Then if the market…

One of the more popular technical indicators in use today is Bollinger Bands. Created by John Bollinger in the early 1980s, this tool is essentially a Moving Average with a volatility filter. Volatility can be of great value in an indicator for those times when the market is swinging wildly…

You see that the EUR/USD was moving up strongly, so you bought this pair on the last pullback. But now after another move up, the pair has pulled off of the highs and is moving down and you wonder if there is a way to measure the strength of the…

“The Relative Strength Index (RSI) is such an indicator, offering the best of all worlds,” said Cardwell, president of Cardwell Financial Group, Inc., based in Woodstock, Ga. The RSI “is the cornerstone of my trading model,” he said.

The easy answer to the question is “when it’s not a pattern”. And that really is the real crux of the issue… Let me explain. Let’s take a look at one of the most simple patterns in technical analysis, the Double Top (Bottom). This is the hourly chart of Dollar-Swissie…

When is an overbought RSI reading bullish and when is it bearish? One classic interpretation of momentum indicators is that of overbought and oversold. Normally these are quite good signals when used within a consolidating market although mere oversold or overbought readings should not be used to buy or sell…

Over the past decades, attempts have been made by traders and researchers aiming to find a reliable method to predict next action of the securities. As a result we have a variety of different fundamental and technical analysis methods and many theories today that really work. For the first pace…

Some of the most popular trading strategies in forex markets involve the use of Japanese Candlestick charts. Given a specific pattern in candlestick formations, traders look to buy and sell currencies in anticipation of reversal or continuations in price. Yet testing the profitability of such concepts is easier said than…

Seven years ago when I was about to finish a long time study on how to understand the real meanings of economic concepts and in a shiny day when apparently everything did worked out well , I found myself a leading scientist of economics, someone who will be rich in…

“My work has gotten better due to simplifying my approach,” John J. Murphy, the veteran technical analyst, author and CNBC resident technical analyst, told a group of equities and futures traders attending the Technical Analysis Group (TAG) XVIII trading conference sponsored by Dow Jones Telerate in New Orleans.