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How to Profit from Markets by Technical Analysis?

  • Sep 18
    How to Profit from Markets by Technical Analysis?

    In forex
    markets, most investors use technical analysis. Compared with
    fundamental analysis, technical analysis has many advantages. The most
    obvious one, for me, is that technical analysis can efficiently capture
    short-term trading opportunities and profits. It does not need to spend
    too much time studying the country’s economic data and policy direction,
    which effectively saves traders’ research time and simplifies the
    transaction.To get more news about WikiFX, you can visit wikifx official website.

    How
    to profit from markets by applying technical analysis? In fact, there
    are many different methods of technical analysis. Some people use
    technical indicators to identify market trends and turning points. Some
    use typology to capture the possible future trends of markets. Others
    use pure K-Bar to analyze the strength of the market's rise and fall,
    and to determine the possible trends of markets.

    For these methods, Lewis lists the following instructions for investors' reference:

    First, Technical Indicators

    According
    to the functions, technical indicators can be simply classified as
    trend indicators and swing indicators. The functions of the two
    indicators are different, which is key for investors to learn how to use
    them.

    Trend indicators: mainly to help investors identify market
    trends. The most common trend indicators include Moving Average (MA),
    MACD and Bollinger. These technical indicators can help investors by
    providing good and clear guidance of market directions, but if you use
    trend indicators as a basis for buying and selling, you will find that
    the position of entering and exiting the market cannot be well grasped.
    The main reason is that the core focus of trend indicators is to provide
    directions rather than a reminder of buying and selling signals.
    Therefore, it is easy to buy too late and sell too early. At this time,
    swing indicators must be used.

    Swing indicators: mainly to assist
    investors in identifying turning points in the market. The most common
    swing indicators include KD (Stochastic Indicator), RSI (Relative
    Strength Indicator) and William indicator. The purpose of these
    technical indicators is to help investors grasp key short-term turning
    points. But the biggest disadvantage is that it cannot provide clear
    guidance on the direction of the market trend, that is, it cannot assist
    investors in analyzing the trend direction.

    For investors who
    use technical indicators to trade, Lewis suggests that two different
    types of indicators must be used in analyzing markets and deciding where
    to enter and exit the market. For example, if investors find that the
    EUR/USD is in an upward trend by the MACD indicator, the winning ratio
    can be effectively increased by using the swing indicator of KD
    indicator which pays attention to the buying signal of golden cross.

    Second, Pattern Trading
    Pattern
    is the main trading system used by many traders in the world. The
    so-called pattern refers to the identification of the possible
    fluctuation direction of markets by analyzing a series of K-bar patterns
    and other patterns and summarizing through historical verification.
    Various patterns have proved to be easily recurring graphics. For
    example, many investors pay attention to patterns, such as double
    bottoms, M-shaped heads and box-shaped interval oscillations. Once these
    patterns have a breakthrough or break signal, they provide a very
    significant trading signal, by which investors can make transactions.

    Third, Multiple Time Frame Analysis
    The
    so-called Multiple Time Frame (MTF) refers to the simultaneous analysis
    of the multi-period conditions (D1/H4/H1/M30/M15..., etc.) of the same
    commodity, which gives markets the correct trend points. For example,
    investors can analyze that the trend is upward through the H4 time axis.
    In order to grasp a better entry layout, investors should focus on the
    key entry position layout in a smaller time zone.

    For example,
    once investors find that the price is on an upward trend when observing
    the H4 chart of the gold commodity (XAU/USD), they can find a better
    entry position in H1 and M30. At this time, if they cut into the
    position of gold purchase and look for a key entry position from the
    hour zone, the subsequent winning rate can be effectively improved under
    a long-term bullish situation.

    I’m the core focus of market
    planning through typology, which is assisted by certain technical
    indicators and MTF technology. They prove to be a good trading strategy
    and technology for newcomers as the winning rate can be effectively
    maintained above 75% in the long run. I would suggest that you should
    first use technical indicators to try to capture trading opportunities,
    and then use the advanced multi-period technology of MTF to strengthen
    the winning rate of the operation.

    I think that with a good
    stop-profit and stop-loss strategy, a good technology and a good
    mentality, there will be a chance to make long-term profits from
    markets. Investors who are interested in tracking down roads are welcome
    to follow the Instagram: Lewisforex2020.