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- Description of Technical Analysis -
A technical analysis is divided into a Trend following indicator, an Oscillator system indicator, and a piece rate indicator. |
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The fundamental view of each technical-analysis index and usage
are carried. He buys a technical analysis and it shows an analysis person a
sign, a sale sign, a profit-taking target value, a loss cut level, etc. However,
many cheat also exists in an analysis result. It is necessary to discern whether
it is the high sign of the establishment which reduces a cheat and leads to
profits. It is very important work "to analyze" validity of a technical analysis
by the combination of a technical analysis, the back test in each currency pair,
etc. |
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Technical analysis indicator-Trend following indicator-Moving Avegrage line |
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Moving Average line(MA)
Moving averages are average prices for the past few days or months
Moving Average-The kind of Moving Average
- Simple Moving Average(SMA) - Exponential Moving Average line(EMA)
- Relative Moving Average(RMA) - Weighted Moving Average(WMA)
Moving Average is a technical indicator Trend following indicator type for seeing the directivity of a market price etc.
Moving Average is the technical-analysis indicator which can be used as
a support line and a resistance line.
The directivity of a forex market price is judged by the crossing of Moving
Average.
Short-term Moving Average line and long-term Moving Average line are pulled.
When short-term Moving Average exceeds long-term Moving Average upwards
from the down, it can also be judged as a bull market.
When a short-term moving average line is less than a long-term moving average
line, it can also be judged as a bear market.
About a Golden cross/Death cross
IIt is called a Golden cross when a short-term moving average line exceeded a long-term moving average
line.
The fundamental view of a Golden cross judges it as a bull market.
It is called a Death cross when a short-term moving average line lowered than a long-term moving average line.
The fundamental view of a Death cross judges it as a bearish market.
-Golden Cross |
- Death Cross |
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The calculation method of Moving Average. All the calculation period is
five days.
Day closing price=E
Day before closing price=E1
2Days before closing price=E2
3Days before closing price=E3
4Days before closing price=E4
Simple Moving Average(SMA) |
(E+E1+E2+E3+E4)/5 |
Exponential Moving Average(EMA) |
EMA the previous day+a(E-EMA the previous)
a=2/(N+1) (5 is substituted to N.)
-Calculation of the first day
SMA is used when there is no EMA the previous day. |
Relative Moving Average(RMA) |
((5-1)*RMA the previous day+Day closing price)/5
-Calculation of the first day
SMA is used when there is no RMA the previous day.
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Weighted Moving Average(WMA) |
(5*E+4*E1+3*E2+2*E3+1*E4)(5+4+3+2+1) |
About Resistance
- Beyond the Level is Point (Level of Price) Considered to be Hard to Go Up.
About Support
- Below the Level is Point (Level of Price) Considered to be Hard to Go
down.
Relation page of a moving averageThe practical use method of a moving average |
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Forex or Technical analysis Books- |
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(A new exchange trader's guide to a technical analysis) |