The Frontiers Of Trading

by: Ivan Cavric Fibonacci retracement is a popular technical analysis tool that uses horizontal lines to indicate areas of support or resistance at the key Fibonacci levels before the price continues in the original direction. These levels are derived from the Fibonacci sequence and are commonly used in conjunction with trend lines to find entry and exit points in the market. The Fibonacci sequence is a series of numbers in which each number is the sum of the two preceding numbers, starting with 0 and 1. The key Fibonacci levels derived from this sequence are 23.6%, 38.2%, 50%, 61.8%, and 100%. To use Fibonacci retracement, you need to first identify the direction of the trend. This can be done using trend lines, moving averages, or other technical indicators. Once you have identified the trend, you can then draw a Fibonacci retracement from the high to the low of the trend. The horizontal lines at the key Fibonacci levels will then act as potential areas of support or resistance. For...

by: Ivan Cavric The Commodity Channel Index (CCI) is a momentum-based technical indicator that was developed by Donald Lambert in 1980. It is a versatile tool that is used to identify cyclical turns in commodities, stocks, and other financial instruments. The CCI is based on the idea that prices tend to remain within an average range, with deviations from this range being an indication of an uptrend or a downtrend. The CCI measures the number of standard deviations that the current price is from the average price. When the CCI is above 100, it indicates that the price is above the average and could be overbought. When the CCI is below -100, it indicates that the price is below the average and could be oversold. To calculate the CCI, Lambert first identified the typical price of a commodity by adding the high, low, and closing prices and dividing the sum by three. He then calculated a moving average of the typical price and used it to determine the average deviation from the typical pr...

by: Ivan Cavric The Heiken Ashi indicator is a popular tool used in technical analysis to smooth out price data and filter out market noise. Developed by Japanese analyst Goichi Hosoda, the Heiken Ashi indicator can help traders identify trends and make better informed trading decisions. Unlike traditional candlestick charts, which plot the open, high, low, and close (OHLC) prices for a given time period, the Heiken Ashi indicator plots the average price of a security over a given time period. This is done by taking the average of the open, high, low, and close prices and then plotting the resulting value as a new candle on the chart. To calculate the Heiken Ashi candle, the following formulas are used: Heiken Ashi Close (HA-Close) = (Open + High + Low + Close)/4 Heiken Ashi Open (HA-Open) = (HA-Open (previous candle) + HA-Close (previous candle))/2 Heiken Ashi High (HA-High) = max(High, HA-Open, HA-Close) Heiken Ashi Low (HA-Low) = min(Low, HA-Open, HA-Close) One of the main benefits...

  by: Ivan Cavric A moving average is a technical analysis tool that helps smooth out price action by filtering out the “noise” from random price fluctuations. It does this by calculating the average price of a security over a specific time period, and then plotting that average as a line on a chart. There are three main types of moving averages: simple moving average (SMA), exponential moving average (EMA), and weighted moving average (WMA). In this article, we’ll take a closer look at each of these types of moving averages, as well as some strategies for using them. Simple Moving Average (SMA) A simple moving average (SMA) is the most basic type of moving average. It is calculated by taking the sum of the closing prices of a security over a specific number of time periods, and then dividing that sum by the number of time periods. For example, if you wanted to calculate a 50-day SMA for a stock, you would add up the closing prices for the past 50 days and then divide that sum by 5...

  by: Ivan Cavric Bollinger Bands are a technical analysis tool invented by John Bollinger in the 1980s. They consist of a simple moving average and two upper and lower bands that are placed above and below the moving average. The bands are typically set two standard deviations above and below the moving average, although the distance can be modified. The purpose of Bollinger Bands is to provide a relative definition of high and low prices of a security. By definition, prices are high at the upper band and low at the lower band. This definition can aid in rigorous pattern recognition and is useful for comparing price action to the action of indicators to arrive at systematic trading decisions. Bollinger Bands can be used on all time frames, including minute, hourly, daily, weekly, and monthly charts. They can be used on any security with high, low, and closing prices, including stocks, futures, and currency pairs. There are several ways to use Bollinger Bands in trading. One common...

  by: Ivan Cavric The Parabolic SAR (Stop and Reverse) is a technical analysis tool that was developed by J. Welles Wilder Jr. It is designed to identify potential reversals in price trends and can be used by traders to enter or exit trades. In this article, we will explore how the Parabolic SAR can be used to make more informed trading decisions. The Parabolic SAR is plotted on a chart as a series of dots, which are placed either above or below the price bars. The position of the dots indicates the direction of the trend, with dots above the price bars indicating a downtrend and dots below the price bars indicating an uptrend. The Parabolic SAR is based on the idea that as the price of an asset increases, the acceleration of the price increases as well. This acceleration is represented by the SAR dots, which move closer to the price bars as the trend continues. When the dots are close to the price bars, it indicates that the trend is strong and may continue. When the dots are furt...

  by: Ivan Cavric Fractal Indicator The Williams Fractal Indicator is a technical analysis tool that was developed by legendary trader Larry Williams. It is designed to identify tops and bottoms in the market, as well as potential reversals in price trends. In this article, we will explore how traders can use the Williams Fractal Indicator to make more informed trading decisions. First, it is important to understand how the Williams Fractal Indicator works. The indicator uses a series of five consecutive bars to identify tops and bottoms in the market. A top is identified when the highest high of the five bars is followed by two lower highs on either side, while a bottom is identified when the lowest low of the five bars is followed by two higher lows on either side. Once a top or bottom has been identified, the Williams Fractal Indicator will plot a fractal arrow on the chart. This arrow is used to signal a potential reversal in the market, as it indicates that the current trend m...