Market Analysis

How have the main currencies behaved during 2018?

by

The year 2018 has been marked by tensions and uncertainty. The commercial war between the United States and China has been carried to its maximum level, the rise of interest rates and QT (quantitative tapering) has continued in the US and in Europe the QE (quantitative easing) has been ended. Towards the end of the year the atmosphere is even more tense with the “gilets jaunes” (yellow vests) in France, the political escalation between the US and China and the fall of the world stock markets. On the other hand, the price of oil is practically at a minimum, although it seems to start to rise, which has helped to reduce the increase in global political-economic tensions.

On the one hand, the low price of oil contains inflation, which reduces the pressure towards the contraction of the monetary stimuli of the main world banks and on the other hand supposes an injection of disposable income for consumers.

Read more

Long-Term Prediction Models of Exchange Rates in the Forex market

by

In this article we will examine the different models used in fundamental analysis to predict changes in currency prices which are used by analysts of the most important investment banks. These models may be of interest to all traders who want to increase their knowledge regarding fundamental analysis applied to the Forex market. Currently there are seven main models for forecasting exchange rates:

Read more

Three White Soldiers Candlestick Pattern

by

The candlestick pattern Three White Soldiers is a highly reliable formation which occurs in both downward and upward trends and indicates that there is a high probability that the market continues to trend upward (continuation pattern) or reverse the downward trend that was dominating the market so far (reversal pattern). This pattern can be identified as follows:

  • The current trend may be bullish as bearish. If the trend is upward, there is usually a decline (previous price movement in bearish) or a period of price consolidation before the market resumes its upward move through this formation.
  • The price profuce three consecutive white candles.
  • Each candle produces a new high.
  • The opening of each candle is inside the body of the previous candle.
  • Each candle closes near the peak.

    Read more

Engulfing Bearish Candlestick Pattern

by

The candlestick formation Engulfing Bearish is a highly reliable trend change pattern that is formed in bull markets and indicates that there is a high probability that the market will change its direction from bullish to bearish. Sometimes it could be the beginning of a bearish trend. This pattern can be identified in the following way:

  • First we have a candlestick with a small white real body, followed by a black candle with a long real body that encompasses in its entirety the white real body of the previous candle. In other words, the range of the first candlestick is within the range of the second candlestick.
  • The previous trend of the market must be bullish.
Engulfing bearish pattern

 

Read more

New Home Sales Indicator

by

General Definition

The “New Home Sales” is an economic indicator that measures sales of newly built homes. This is a monthly published data, which always refers to the previous month in which the Department of Commerce’s Census Bureau published the report. This report includes both the quantity and price statistics. It is considered a lagging indicator of market demand and also affect interest rates on mortgages.

It is considered as a sale of a new home any deposit or signing a contract, either in the year in which the house was built or the year after construction.

Force Index Indicator

by


The Force Index is a trend-following oscillator that quantifies the movement of the market. It combines three basic elements such as the direction of movement, scale and market size. It relies on an auxiliary line to provide greater clarity so that it indicates a dominant bullish trend when the indicator remains above this line and a bearish trend when the indicator remains below.

Like all good indicators, the Force Index, has a very simple construction. This is simply to plot the slope between the last two prices and multiply the result by the volume involved. Once we have calculated the oscillator, the peaks are smoothed using an exponential moving average, because in its original form, these peaks can be very steep making it difficult to use in a trading system. The formula to calculate this indicator is the following:

Read more

Forex Position Size Calculator

by

A key aspect when an investor trades in financial markets like Forex is the application of appropriate monetary and risk management. This includes the use of an appropriate position size based on the total capital account, the risk level accepted by the trader, the level of leverage, the stop loss used, and the volatility of the instrument in which the … Read more

Fundamental Analysis in Forex

by

Fundamental Analysis of the Forex Market Forex fundamental analysis is a type of market analysis that identifies and measures factors that determine the intrinsic value of financial instruments such as economic and political environment. It is included in the fundamental analysis any factor affecting supply and demand of the instrument traded. For example, a study of fundamental analysis for a … Read more

Common uses of Bollinger Bands

by
The Bollinger Bands is a technical analysis tool developed by John Bollinger in the early 1980s.
 
Bollinger bands consist of three curves drawn in relation to the price. These three curves are the upper band, the lower band and the middle band. The middle band is, as a rule, a simple moving average and therefore provides information on the trend. From the midband the upper and lower bands will be calculated using a standard deviation. The interval between the upper and lower bands gives information on the volatility or market activity. By default, the parameters used are a simple moving average of 20 periods and 2 standard deviations to calculate the upper and lower bands.
(Note: on some platforms and graphical analysis software the midband is not shown).

Read more

Stages that characterize a bullish or bearish market

by
The phases that characterize the bull and bear markets are as follows:

– Bull Market

This type of market is produced when the advance of prices reaches a level higher than the previous advance. Likewise, when no secondary trends become established below the latest peak. We can identify three phases in a bull market:
  • Accumulation phase: At this stage falls occur in the market as the investors sell because the economic news are mostly negative. There is a moderate activity that begins timidly to recover.
  • Recovery or expansion phase: In this case the activity begins with a modest progress and it produce a shy rising in market prices.
  • Distribution phase: There is great activity in the market. There are major upward movements in market prices and trading volume and investors take long positions without objection.

Read more

+ More