Floor pivot points are the simplest type of pivots used in forex.
From the previous period: H = high, L = low, C= close
Pivot (P) = (H + L + C) / 3
Resistance R1 = 2P – L
Resistance R2 = P + H – L
Resistance R3 = H + 2(P – L)Support S1 = 2P – H
Support S2 = P – H + L
Support S3 = L – 2(H – P)
Twin peaks return… here’s a chart, a real life example.
The price has reached a level of resistance, bounced back off it… and then returned to test the idea one more time for luck… It didn’t work and now there’s a pronounced downtrend forming.
This is the double top, and, as usual, what holds true for the double top will also be so in reverse for the double bottom, which is even less polite.
Continue reading »
They’re the end of the trend – and the beginning of reversal, perhaps… The hammer and hanging man look very similar, with long lower shadows, short upper shadows and small bodies (open or filled). They look similar, but:-
A Hammer occurs in a downtrend = bullish reversal, the market’s going up again
A Hanging Man occurs in a uptrend = bearish reversal, the market’s going down…
Continue reading »
Having looked at parabolic sar, and ADX – what about the two forex indicators together? Some people rate it highly as a sufficient system to produce trustworthy signals in itself – I’m not convinced – for the reason that these are both lagging indicators, and just don’t seem to give the more robust signals that, say RSI on its own, can give.
Parabolic SAR default settings (0.02, 0.2)
ADX 50 (with +DI, -DI lines)
Entry rules:
Sell: +DI line is below the -DI line, and Parabolic SAR produces sell signal.
Buy: +DI line is above the -DI line, and Parabolic SAR produces buy signal.
Exit rule: when +DI and -DI lines have re-crossed.
Here’s an example that doesn’t help much:-
A significant area of crisis at present is in the state of the so-called emerging currencies. The Mexican peso and Brazilian real are now shedding value rapidly, leading to real economic problems in those countries. Since 1st August, the peso, for example, has dropped 25% against the US dollar.
Companies in these countries have been making extensive use of derivatives – it’s that word again – in recent years, essentially betting on the value of their home currency.
Continue reading »
13:00 GMT today comes the Norway interest rate statement – liable to a significant cut from 5.75%, maybe 1/2%. If you follow EUR/NOK, it may well be edge-of-your-seat stuff… USD/NOK and GBP/NOK would also be interesting to observe.
Continue reading »
Here’s a 5-3 Elliott wave (maybe) in the wild – the pros would call it a subminuette, on a 1 hour chart, range of 40 pips.
Is it an Elliott wave? Sure looks a bit like one should look.
Continue reading »
On a candlestick chart, Doji form when the opening and closing prices are virtually equal. They may be open or filled, ie slightly up or down, but the body of the candlestick will be very small to non-existent.
Their upper and/or lower shadows may be pronounced – that is, there may have been significant movement during the session, but the important factor is that when the dealing’s done everything has gone back to where it started.
Doji indicate indecision in the market. Prices move above and below the opening level during the session, but close at or very near this level. So there’s an equilibrium in the final result, neither bulls nor bears could take over the market and create a trend.
Continue reading »
South Africa’s 12% main rate has made the rand a favorite of the carry trade – where investors take advantage of a disparity in the interest rates associated with a pair of currencies – for some time now. But a successful carry trade can be wiped out by a simple fall in the pair.
The Rand 
ZAR has not been what you might call strong in a long time – but in the last few months, it has plummeted, shedding almost 20% against 
USD to reach a five-year low.
Continue reading »
A dodgy alliteration, but now the heat has turned on Hypo – so what does the German government do, rushes to the rescue, guaranteeing savings everywhere. Other countries in the Euroland won’t be too unhappy about this, but the UK definitely will be.
This is now socio-political concerns completely overriding the economic forces – ie. very definitely not a free market and not capitalism.
Continue reading »
Comments(1) 
Loading ...