Tag: chart patterns

Breakout Trading Strategies

Breakout Trading Strategies

Trading Strategies
Breakout trading strategies are quite popular just as trend trading strategies. In fact, compared to trend trading, breakout trading strategies are likely to come out higher. This is due to the fact that the markets tend to be in a range most of the times. The profit potential from break trading strategies are bigger and quicker, compared to trend based methods. With trend based methods, profits are not quick to come by. With a trend based trading strategy, you will have to hold on to your position for a prolonged period of time. The main benefit of using a breakout trading strategy is to capture the big gains based on the volatile breakouts. Despite the quick gains, breakout trading strategy can also result in significant losses. To avoid this, find an edge by getting familiar wi
AUDNZD – A potentially juicy trade setting up

AUDNZD – A potentially juicy trade setting up

Technical Analysis
The Aussie dollar has been prone to some wild swings this week. It all started off few weeks ago with the RBA Governor Glenn Stevens giving a speech to the Australian American Association in New York. In his comments, the RBA Chief made indirect reference to the 'high exchange rate' of the Australian Dollar and that further rate cuts were on the table and something which the Australian Central Bank could dig into if need be. These remarks sent the Aussie plummeting sharply and once again arousing speculation of May rate cuts. You can read The World Economy and Australia from the RBA website. Then a couple of days, sentiment in the US soured and with the GDP numbers disappointing for the quarter (they weren't really, if you consider the bigger picture, but that's a different story), t...
Easy trading strategies with Renko Charts

Easy trading strategies with Renko Charts

Trading Strategies
Renko charts, as written in our previous article is purely based on price action and is independent of time. Due to the nature of renko bricks, it is therefore easier to use various charting analysis such as trend lines, chart patterns, support & resistance. Unfortunately, most trading strategies based on Renko tend to focus on indicators such as moving averages, oscillators et all. In this article, we give a brief outline into the basics of trading with Support/Resistance levels. Short Term Support & Resistance Perhaps the most easiest of all, traders can identify support and resistance levels with renko charts with much more ease than with using any other chart types. The chart below is that of the NZDUSD, 10 pip renko move. The horizontal line plotted shows clear resista...
Trading with Ascending and Descending triangles

Trading with Ascending and Descending triangles

Trading Strategies
In our previous articles on chart patterns, we covered the Head and Shoulders pattern, the flags pattern (bullish and bearish flags). In this article, we explain the ascending and descending triangle chart patterns. These patterns work on the basis of breakouts. A break out is defined as price trading in a range and consolidating. When enough momentum is built, price tends to break out or break down with force. Break out trading is one of the many ways to trade although traders tend to get caught more than often. One of the most typical price action with trading break outs is that price often makes false moves before carrying on in the intended direction. When such a move occurs, most of the traders who went in early often get stopped out. While one might argue to wait for a break out t...
Trading the Flag patterns the right way

Trading the Flag patterns the right way

Trading Strategies
In the realm of the many different types of chart patterns, the flag patterns presumably fall into the category of one of the most safest chart patterns to trade. The reasoning behind this statement comes from the very definition of flags (and pennants). Definition of the Flag Pattern A flag (Bullish or Bearish) is indicative of a continuation of the prevailing (underlying or the main) trend. When a flag pattern is identified on the chart, it usually points to a pause in a rally creating a tight range type of price action. This pause usually results in a break out as price tends to resume its previous trend. Unlike other chart patterns such as the famous Head & Shoulders, which generally points to a reversal of trend (or in some cases as a continuation pattern), it is relatively d...