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Forex Chart Analysis

Analyzing the chart may be part of the first confusing in forex beginners, including me at the start in business. I prefer to call this forex as a business. So, I respond and do it like a business.

Many ways in which traders analyze the charts for both fundamental and technical analysis in which it is later used to conduct transactions with the open position Buy or Sell or may refrain from doing deals first. Waiting for the moment or is the term usually temen-temen ....

Where or how to analysis technique is best? I prefer to say that all the techniques or in any way in the chart that is used to analyze each trader and able to make it produce a correct decision is the best way.


What way I use? I use pure technical analysis ... means I only use mathematical and statistical analysis to analyze price movements.

Well .. to analyze the results of this analysis so that we can later use to make decisions in a transaction that we do, what should we make of our analysis? Just really simple, there are only two data we need to get from the analysis we do. Anything? First, we have a prediction where the price will move (up or down, up or down, up or down) and Second, we have a prediction to which this price will move.

Prediction? Yup ... all the results only predictions because somehow we need to realize that no one knows where prices will move and to which the price will move. But the results of our analysis of these predictions are not generated randomly .. There basically. What bottom? well mathematical and statistical calculations or based on fundamental analysis using this technique. So in sum prediction that we will do as well as the experts in Meteorology estimate when the rainy season or summer comes with using the temperature data, atmospheric pressure, wind direction and so on. Only in forex because we will use technical analysis, we will use price data that have been formed to analyze and predict the next price movement.

Past data Lha's not anything to do with the future? (This may be common questions). I disagree, because I believe in the past, present and future are interconnected. For example, how we are today is the result of the past. How do we walk, how we speak, behave and even our ahlak is the result of our past. So if we want to know how we are today and where we later .. heaven or hell .. we can analyze it by looking at past and current conditions .... so about the analogy.

Where the price trend will move? or where it nih trend? Maybe it's a question we often ask ourselves when I first saw the chart. The term of this trend is often a debate traders, especially defenisinya. Well, we're not going to argue about the trend here ... uniform understanding so let me start this thread now in the "trend" we defenisikan as the price trend based on units of time .. why? because we will see time as one basis of our analysis later. clear kok .. hehehe wong on the chart there are two data cuman "price" and "time" doang ....


So how do we determine the trend? Many do ... The easiest way is when we see a chart .. let's see the value "price" on the far left of the candle of our charts and see the value "price" on the last candle on our chart. Compare the value, if the value "price" on the left is less than the value "price" of his final ride the trend .. and its down trend if otherwise .. easy right? hehehehehehehe.. But we do not use this way is .... hi .. hi .. hi ... hi. We'll see the trend mathematically ...

Well, we'll see the trend by using data available on the chart that we use. What are the data that's available on our chart? Existing data on the course we chart containing only the price data and time. For example in Time Frame H1, note that there is one candle in this H1 TF. Each candle describes the price movement range for an hour, and wrote the price movement during this hour only four values represented by the price value High, Low, Open and Close (HLOC). High value where value represents the highest price, low values represent the lowest value, the value of the initial value representing the Open, Close values represent the final value in the range of one hour. Well, if we look at other TF HLOC values in each of these candles is the price value that occurs within the period in accordance with which the TF candle is located.

What we can see from here? Grouping of data .. yup bener banget. So the price data in the form of candle that we see in every TF chart that we open is the picture price data are grouped in a certain time, and each group of data by this time represented only by 4 (four) price values that occur during a specific time frame. Well, from here clear that TF describes the data. So if the TF W1 means each candle representing a range of price movement for a week, where the price movement this week in the TF W1 were represented by four of his HLOC value alone. Understanding of the TF and the data on each of his candle was useful when we choose how we analyze TF chart later. Lack of unfamiliarity about this, too often we can either analyze lho ... So with very compelled me to translate it in here ... (sorry to the master if you have read these basic things ...)

Then how can we see the direction of price movements that have been and are going to use the data on each candle is this? Then the price of four values (HLOC) found on each candle, value price which should we use to analyze?

We started to go a bit in here ... we start from the second question first. Value price which will be used in the analysis? My answer is everything. Four price values contained in each candle is the same important values. Why? because the four values in each candle HLOC depicts or represents the price values that occur within a certain time frame. Logically this, let's look at a candle in the TF MN (Monthly) ..

Now from this candle just try to take one example from his HLOC value. Tell us take his score just Close. Let our simple example demonstrated the value of candles Close price USD-JPY in November 2007 was 111.10.

What can we read from the value of this Close it?
Whether we can obtain more information than just the value of this Close?
What is clear we only know that the price value at the end of the month in November 2007 with a value close to USD 111.10 price-JPY. That's it! Now try if from a candle that we also see the value of High, Low and Open it also, so that information can we catch or read from a candle that will be different is not it? More information can we describe the data rather than 4 data 1.

Well go from here develops the use of data on this candle for analysis .. so we know there is data Median ((H + L) / 2), Typical ((H + L + C) / 3), Weighted ((H + L + C + C) / 4) and others. But many traders who only use one candle for the data in the analysis, whether this be? legitimate because the electoral data in every candle that we shall use the mathematical and statistical analysis that uses preogratif rights and users also will have their reasons why he uses the data in the analysis.

Back to the first and second questions above, we will analyze the data, using the moving average by taking the weighted data on each candle to see the price movement within a certain time frame. Well, lucky plaform current trading is mostly already provide this facility be ready indicator known as the Moving Average (MA). In analyzing my data more often use the MetaTrader platform because it looks interesting and easy to use.

What is Moving Average? wuih ... dijabarin reply will be meticulous with the formula ni thread, but for details temen-temen can read and read about the formula and details about this MA in such sites or www.babypips.com www.belajarforex.com or asked to mbah Google aja .. hehehehehe ... But a clear brief to calculate the value of MA is the moving average of a number of specific data. Method calculates the average value of this move was a variety of ways and its formula we know there sehinggak Simple Moving Average method, exponential Moving Average, Linear Weighted Moving Average, etc.. Well let me not dizzy ... then we only use the method Simple Moving Average (SMA) and the data from each candle we will use the data type is Weighted (HLCC / 4).

Why do we use the method to see the school moving average of price movements will we observe? The main reason we use it is the simplicity of the formula high school itself, because eventually this will help us a lot in understanding the characteristics of the movement formed by this formula. SMA calculate the average value of a needle in a general way, for example, say we have a value of 6, 8, 9, 4 and 3 high value is (6 +8 +9 +4 +3) / 5 = 6 where the value of divisor 5 is the amount or the amount of data that calculated average. Simple right?

Well, how high school picture on the chart that we'll actually just the same as in examples .. Tell us use the high school with his applied Weighted price (HLCC / 4) and period 9. This means that high school formula will automatically calculate the average value HLCC / 4 of the 9 fruit of the last candle. So every time a new candle is formed school will calculate the average value and the platform that we use everything is displayed as a line .... (hehehehe ... i love technology because it had to be in the count and the manual image)

So let me understand better, let us look at the picture below ...

Well ... now I'm trying to reduce this chart picture ...
about the same no cursory analysis of our results by looking at the first chart again?



Interesting is not it? Imagine, just down the chart view, we can obtain different information ... What does this mean? means that the broad range we see or look at something will produce a different perception on our heads .. why? of course, because the more widely we see something, the more information we will get. And the amount of information that we have here then that will make our understanding more clearly.

Well .. back to the discussion. Consider the chart of GBP / USD Time Frame (TF) on the H1 ... What information can we catch from this chart?
What has happened to the movement of this GU? Where direction?
What is happening with the current movement? Hell ya what are you doing GU?

As a trader, the first thing we should do before doing the analysis is to make a number of questions whose answers we need to make a decision based. of course-related questions of our activities well ... namely trading. Where the question is will we ask? To chart ... the graphics on the screen monitor or laptop pc us ... not to anyone .. in the chart in front of us was all the answer we want to ask then is the answer .. hehehe

Well ... musing on this and previous writing .. Try to arrange your answer some questions or information we'll need to make an analysis. Tulis sebanyak mungkin.... [I hope you'll do it right now ... and write in your notebook .. then later we see at the end of this discussion is all the information we need is the answer or not ...]

After looking at the chart ... what can we catch the movement of candles on the chart formed by the GBP / USD it?
Observe that the movement is only set up three basic patterns of the pattern of UP, DOWN (Up and Down) and such or FLAT lah .. hehehe ... everyone also knows well? But surprisingly many are forgetting the three movement patterns of this ... kok bisa yah? Talk about this movement pattern ... trader who breaks it down too much more than three patterns ... but in this thread we will only see and share price movement patterns with these three basic patterns. UP, DOWN FLAT adan ... These three alone.

The question is how do we know the prices now are Up, Down or Flat? Try not observed when we look at the chart above and make conclusions up, down or flat is because we compare the price value that we observe with the previous price values ... nah it is here that causes many traders look different perceptions about trends .. someone said that up .. and some say down at the same time ... not really anything wrong .. because the conclusions it up or down depending on how the trend is seen ... Examples like this ... Consider the picture below (still chart GBP / USD which was )....


How do we know the current trends in the point C?
If we observe this point C from point B then we will call this trend is down ... but if we watched from point A then we say that the trend is still up ... So we can see that the point of reference with which we can produce different conclusions ....

This reference point is very important ... picture of the above is simply describe the difference that the information we get just by looking at an observation point from a different place. Titiknya same but different observations where the outcome was different ... Now, back to this chart .. points A and B is the observation that we do that distinguished the time .... So when we look at point C from point B, we actually observe the price at point C and compare them with prices in the B form. Because in our chart there are only two parameters is Price and time we actually observed price changes based on changes in time ....

Point of reference we will use later in this analysis is the time ... And this means that we must menstandardkannya .. well obviously dong, whose name should be the standard reference point and does not change, kalo enggak also different observations dong ... hehehehehehe and Standard means must be generally accepted and have a logical reason ... not vain ... (mathematical banget ... yah?). In short time we will share this general reference from the annual, monthly, weekly, daily and 8 hours. The timing of this reference will be used later in the use of indicators-indicators that we use in analyzing.

Now back to the chart of GBP / USD today ...
We've talked in the beginning of the Simple Moving Average .. well let's take advantage of this high school indicator to see the average price GBP / USD for 1 day back. 1 day, then we use a reference point for observing one-day price changes ... Time Frame ever because we are the H1 chart to see the high value of 1 day then we will calculate the average of the 24 candles on H1 TF. If you are using Metatrader, open the Moving Average indicators and sets of period 24, MA Methode Price Apply simple and weighted closed (HLCC / 4) ... the chart GBP / USD will look like the image below:



Before we proceed, I want to discuss a bit about the time this reference. As I've mentioned before the time of reference we will use is an annual, monthly, weekly, daily and 8 hour's. Why do we use this time as a reference, in fact logical reason ... this, is the world's Forex trading is driven by humans as the main perpetrators. And as we know the business or trade to work with time constraints as a reference ... hence we often hear there are annual reports, monthly, weekly and daily. This means that the reference time we will use the time we adjust the reference business world ... let line ... that's the reason deh .. let me clear hehehehehe ...

Back to chart GBP / USD which we add the high school period of 24 to view the price movements during the last 24 hours (1 day of his last per hour). What can we see here? Consider the movement of SMA from point 1 to 2, seen here 24 high school rose sharply. So we can say that the daily trend in point 1 to point 2 is up trend. And from point 2 to 3 shows that high schools tend to be 24 that forms a flat, so at this point we can say that the trend of point 2 to 3 is Flat. Then from point 3 to point 4 of his high school trend back 24 UP. From point 4 to point 5 of his high school fall 24 trends. From point 5 to point 6 of his high school 24 the trend back up, and from 6 points to close yesterday juma't his high school fall 24 trends.

For more details, see the picture below ....



Well .. from high school we have 24 plots on the chart of GBP / USD H1, so far we got information about the daily movements occurred on GBP / USD. Is this information enough? hehehehehehe .. As I've mentioned in a previous post also we can not only use the information we get from one point of reference. We need some reference point to see and get information that very clear ...

For that we will use some reference point which we have already set and agreed upon before .. Now, in addition to daily reference point, we will also see the movement of GBP / USD from the point of reference Weekly and Monthly. Because we use the high school, then to see the weekly movement of the GBP / USD we will use the high school with 120 in the TF period H1. Why 120? Because one day equals 24 hours, and one week is five days a week is equal to 120 hours. Well, because we use the TF is H1 then the period we use is 120.

Then to describe the monthly movement of the GBP / USD how many high school period we will use the TF H1? hehehehehehe ... certainly lived 120 hours in 4 times a week, so the same with 480. So to see the movement of monthly GBP / USD at TF H1, we will use the high school with 480 periods. For more details, see the picture below. Weekly movement represented by the 120 SMA line SlateBlue color, and the monthly movement represented by the 480 SMA line is yellow.

Try to observe the movement of this Weekly and Monthly .... information what else can we get?

Weekly price of GBP / USD at TF H1 we can see that from point A to point B movement of his weekly trend up. Then from point B to point C weekly price moves down, and since the point C to yesterday's closing price Friday movements per week GBP / USD trend was rising. Then if we observe the movement of monthly (yellow school lines) we can see that the movement of monthly GBP / USD tends to Flat.

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