{"id":3485,"date":"2016-09-06T11:35:06","date_gmt":"2016-09-06T11:35:06","guid":{"rendered":"http:\/\/staging.forexanalytix.com\/blog\/?page_id=3485"},"modified":"2020-10-23T08:38:50","modified_gmt":"2020-10-23T08:38:50","slug":"basic-technical-analysis","status":"publish","type":"page","link":"https:\/\/www.forexanalytix.com\/blog\/education\/basic-technical-analysis\/","title":{"rendered":"Basic Technical Analysis"},"content":{"rendered":"<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:0px;font-size:20px;' class='av-special-heading av-special-heading-h2  blockquote modern-quote  av-inherit-size '><h2 class='av-special-heading-tag '  itemprop=\"headline\"  >Basic Technical Analysis in Trading &#8211; Forex <span class='special_amp'>&amp;<\/span> Other Instruments<\/h2><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>The Japanese began using technical analysis to trade rice in the 17th century. While this early version of technical analysis was different from the US version initiated by Charles Dow around 1900, many of the guiding principles were very similar:<\/p>\n<ul>\n<li>The \u201cwhat\u201d (price action) is more important than the \u201cwhy\u201d (news, earnings, and so on).<\/li>\n<li>All known information is reflected in the price.<\/li>\n<li>Buyers and sellers move markets based on expectations and emotions (fear and greed).<\/li>\n<li>Markets fluctuate.<\/li>\n<li>The actual price may not reflect the underlying value.<\/li>\n<\/ul>\n<p>Basic technical analysis (BTA) is a very important analysis method that has been used increasingly in the markets over the past decades. In essence BTA is simply a study of supply and demand and comprises of a set of tools that attempt to determine which direction markets are most likely to follow.<\/p>\n<p>Trading is based on human psychology and BTA uses well-tested and proven patterns that try to maximise potential trade success. It\u2019s important to note that the presence of a particular BTA pattern doesn\u2019t guarantee a successful outcome; rather it skews the probability of success slightly in its favour. A trader who uses BTA as an analysis tool should always be aware of the potential risk\/reward associated with a particular pattern. Trading is a game of probabilities and risk management, and traders can use BTA as an excellent tool that helps them gain an edge.<\/p>\n<\/div><\/section><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_0\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"0\"] <\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:0px;font-size:20px;' class='av-special-heading av-special-heading-h2  blockquote modern-quote   av-inherit-size '><h2 class='av-special-heading-tag '  itemprop=\"headline\"  >Fundamentals of Technical Analysis<\/h2><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Trending Market<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_1\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"1\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A trending market is one that generally moves in one direction for a prolonged amount of time. The movement (filtering out spikes either way) is consistent and it\u2019s characterized by a distinct pattern in highs &amp; lows. In an upward trending market, we tend to see higher highs and higher lows; conversely in a downward trending market it\u2019s lower highs and lower lows.<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3    '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Uptrend<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_2\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"2\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>An instrument is said to be in an uptrend simply if its overall direction is upward. This is visually demonstrated in a chart by a succession of higher peaks and troughs.<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Downtrend<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_3\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"3\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>An instrument is said to be in a downtrend if its overall direction is downward. This is visually demonstrated in a chart by a succession of lower peaks and troughs.<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Ranging Market<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_4\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"4\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>In contrast to a trending market, a ranging market is described by broadly sideways action. Such markets usually make the same highs and lows several times. In a ranging market support and resistance levels tend to have a high probability of holding, and traders often try to take advantage of this.<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Market Support<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_5\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"5\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Market support is an area where you expect an instrument to find increased difficulty to penetrate through (essentially where you expect selling interest to emerge). That can be a T\/L (trend line), a Fibonacci retracement or a horizontal zone. If volume increases, then the chances of successful support also increase and hence the instrument will find support higher within the zone.<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Market Resistance<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_6\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"6\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Market resistance is an area where you expect an instrument to find increased difficulty to penetrate through (essentially where you expect selling interest to emerge). That can be a T\/L (trend line), a Fibonacci retracement or a horizontal zone. If volume increases, then the chances of successful resistance also increase and hence the instrument will find resistance higher within the zone.<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Confluence Zone<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_7\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"7\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Confluence is when several key levels (resistance, support, fibonacci retracement etc) are in close vicinity. This makes the probability of resistance or support much greater than normal. Traders usually look for areas of confluence where price action usually becomes more predictable.<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Fibonacci Retracement-Extension<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_8\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"8\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Fibonacci retracements and extensions are mathematical ratios used to derive resistance and support levels. They are very popular with traders and are also used to predict the extent of corrections or pullbacks in technical analysis. As a side note, harmonic trading patterns are almost exclusively based on them.<\/p>\n<p>The basic Fibonacci retracement ratios are: 0%, 23.5%, 38.2%, 50%, 61.8%, 100% and the most popular ratio is the 61.8%.<\/p>\n<p>Fibonacci extensions are used to project an existing move to another point on a chart and hence connect 2 separate moves with each other. Traders frequently use them in most forms of technical analysis and especially those using harmonic patterns and Elliot Wave theory. Classic examples are measuring the equality of 2 legs of a move AB = CD for harmonics or the projection of a Wave 1 to Wave 5 expecting wave 5 to be a ratio of Wave 1 (usually 61.8% or 100%) for Elliott Wave theory.<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Channel<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_9\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"9\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A channel is a chart structure that is bound by two parallel trend lines (the lower trend line and the upper trend line).<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Gaps<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_10\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"10\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A gap is a part of the chart where there are no trades at all. This usually occurs when new market-moving information becomes available when a market is closed; the price gaps up or down when the market subsequently reopens. Another cause of gaps is when some major news\/data\/event comes out and causes a violent repricing of an instrument (e.g. 9-11, the removal of the EURCHF SNB floor etc).<\/p>\n<p>Price action often returns to revisit the initial point of the gap break (called \u201cfill the gap\u201d) and for this reason gaps are usually used as reference points or targets by traders.<\/p>\n<p>Two specific types of gaps are of particular interest:<\/p>\n<ol>\n<li>\u201cRunaway gaps\u201d \u2013 these are gaps that exhibit a significant price continuation following the gap and are sometimes characterized by higher volume. These gaps usually follow a substantial and real change in fundamentals of an instrument.<\/li>\n<li>\u201cExhaustion gaps\u201d \u2013 these are gaps that usually occur near the end of a prolonged price move and signal the start of a reversal. This phenomenon is deeply linked with human psychology, as it is the manifestation of deep euphoria or pessimism near tops &amp; bottoms.<\/li>\n<\/ol>\n<\/div><\/section><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:0px;font-size:20px;' class='av-special-heading av-special-heading-h2  blockquote modern-quote  av-inherit-size '><h2 class='av-special-heading-tag '  itemprop=\"headline\"  >Basic Chart Patterns<\/h2><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Flag<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A flag pattern is a continuation pattern which is described as a short sloping rectangle bounded by two parallel trend lines. This is a typical consolidation after a strong move, which has to be less than 50% of the initial impulsive move (the \u201cpole\u201d). If it exceeds that it\u2019s more likely to be a channel forming, rather than a flag.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><p><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-01.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-01.png' alt='' title='patterns-1-01'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_11\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"11\"] <\/div><\/section><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-02.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-02.png' alt='' title='patterns-1-02'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Pennant<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A pennant pattern is a continuation pattern which is described as an initial large movement followed by a consolidation period with converging trendlines. It tends to be followed by a breakout in the direction of the strong (current) trend and is usually a consolidation where the price action takes the form of a symmetrical triangle. If it\u2019s consolidating after a strong move higher\/lower, it is likely a pennant pattern.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><p><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-03.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-03.png' alt='' title='patterns-1-03'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_12\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"12\"] <\/div><\/section><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-04.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-04.png' alt='' title='patterns-1-04'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Bullish\/Bearish Wedge<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A wedge pattern is described as a pattern whose trend lines above and below converge into a triangular shape. A bullish wedge is usually defined by \u201cconsistent highs and higher lows\u201d. A bearish wedge is usually defined by \u201cconsistent lows with lower highs\u201d.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><p><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-05.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-05.png' alt='' title='patterns-1-05'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_13\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"13\"] <\/div><\/section><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-06.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-06.png' alt='' title='patterns-1-06'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Ascending\/Descending Wedge<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Also known as a rising or falling wedge, these are patterns where price loses momentum in the current trend. They are reversal patterns that tend to have an explosive move once the trend line is broken and subsequently provoke a counter trend move. A minimum target is usually the 38.2% retracement of the previous trend.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><p><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-07.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-07.png' alt='' title='patterns-1-07'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_14\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"14\"] <\/div><\/section><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-08.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-08.png' alt='' title='patterns-1-08'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Channel<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A channel is a chart structure that is bound by two parallel trend lines (the lower trend line and the upper trend line). A channel is defined by at least 4 points of contact (support and resistance). Channels can be rising, falling or horizontal. Occasionally channels evolve over time to triangles as traders attempt to undercut each other within the channel range.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><p><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-09.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-09.png' alt='Bullish Channels pattern Forex' title='patterns-1-09'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_15\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"15\"] <\/div><\/section><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-10.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-10.png' alt='Bearish Channels pattern Forex' title='patterns-1-10'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Double Top\/Bottom<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A double top is a chart pattern described by two distinct, well-defined peaks which occur at around the same price level. Conversely, a double bottom is described by two distinct, well-defined troughs which occur at around the same level.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><p><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-11.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-11.png' alt='Double Tops pattern Forex' title='patterns-1-11'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_16\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"16\"] <\/div><\/section><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-12.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-12.png' alt='Double Bottoms pattern Forex' title='patterns-1-12'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Triple Top\/Bottom<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A triple top is a chart pattern described by three distinct, well-defined peaks which occur at around the same price level. Conversely, a triple bottom is described by three distinct, well-defined troughs which occur at around the same level.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><p><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-14.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-14.png' alt='Triple Tops pattern forex market analysis' title='patterns-1-14'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-13.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-13.png' alt='Triple Bottoms pattern Forex' title='patterns-1-13'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_half  no_margin flex_column_div av-zero-column-padding first  \" style='margin-top:10px; margin-bottom:10px; border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Latest educational blog posts<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<div id='av-magazine-1' class='av-magazine    ' ><div class='av-magazine-group sort_all'><article class='hentry av-magazine-entry av-magazine-entry-id-12720 av-magazine-format-standard av-magazine-type-post av-magazine-entry-1 av-magazine-entry-small av-magazine-no-thumb'  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='av-magazine-content-wrap'><header class='entry-content-header'><time class='av-magazine-time updated'  itemprop=\"datePublished\" datetime=\"2025-12-15T08:55:25+00:00\" >15 December 2025<\/time><span class='av-magazine-text-sep text-sep-date'>\/<\/span><span 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class='av-magazine-content-wrap'><header class='entry-content-header'><time class='av-magazine-time updated'  itemprop=\"datePublished\" datetime=\"2025-12-10T10:02:36+00:00\" >10 December 2025<\/time><span class='av-magazine-text-sep text-sep-date'>\/<\/span><span class=\"av-magazine-author minor-meta\">by <span class=\"av-magazine-author-link\"  itemprop=\"author\" ><span class='av-magazine-author meta-color vcard author'><span class='fn'><a href=https:\/\/www.forexanalytix.com\/blog\/author\/leandro\/ title=\"by Leandro Conde\" rel=\"author\">Leandro Conde<\/a><\/span><\/span><\/span><\/span><h3 class='av-magazine-title entry-title'  itemprop=\"headline\" ><a href='https:\/\/www.forexanalytix.com\/blog\/ethusd-20251012-1-1-1-2\/' title='Link to: Ethereum \u00bf que esperamos antes del FOMC ?'>Ethereum \u00bf que esperamos antes del FOMC ?<\/a><\/h3><\/header><\/div><footer class='entry-footer'><\/footer><\/article><article class='hentry av-magazine-entry av-magazine-entry-id-12702 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pron\u00f3stico actualizados.'>USDCHF FOREX An\u00e1lisis y pron\u00f3stico actualizados.<\/a><\/h3><\/header><\/div><footer class='entry-footer'><\/footer><\/article><article class='hentry av-magazine-entry av-magazine-entry-id-12698 av-magazine-format-standard av-magazine-type-post av-magazine-entry-4 av-magazine-entry-small av-magazine-no-thumb'  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='av-magazine-content-wrap'><header class='entry-content-header'><time class='av-magazine-time updated'  itemprop=\"datePublished\" datetime=\"2025-12-05T10:08:49+00:00\" >5 December 2025<\/time><span class='av-magazine-text-sep text-sep-date'>\/<\/span><span class=\"av-magazine-author minor-meta\">by <span class=\"av-magazine-author-link\"  itemprop=\"author\" ><span class='av-magazine-author meta-color vcard author'><span class='fn'><a href=https:\/\/www.forexanalytix.com\/blog\/author\/leandro\/ title=\"by Leandro Conde\" rel=\"author\">Leandro Conde<\/a><\/span><\/span><\/span><\/span><h3 class='av-magazine-title entry-title'  itemprop=\"headline\" ><a href='https:\/\/www.forexanalytix.com\/blog\/usdmxn-forex-analisis-y-pronostico-actualizados-12052025\/' title='Link to: USDMXN FOREX An\u00e1lisis y pron\u00f3stico actualizados.'>USDMXN FOREX An\u00e1lisis y pron\u00f3stico actualizados.<\/a><\/h3><\/header><\/div><footer class='entry-footer'><\/footer><\/article><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_17\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"17\"] <\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  no_margin flex_column_div av-zero-column-padding   \" style='margin-top:10px; margin-bottom:10px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/pricing' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/ForexAnalytix_Banner_400x333-1.gif' alt='10daysOffer-400x333' title='10daysOffer-400x333'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div><div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Heads and Shoulders<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A head and shoulders pattern is described by three peaks that comprise of a middle peak (the \u201chead\u201d) and two peaks on either side (the \u201cshoulders\u201d). The \u201chead\u201d is always higher than the shoulders in a regular H&amp;S pattern, and lower in an inverse H&amp;S pattern.<\/p>\n<p>A head and shoulders pattern is a reversal pattern, not a continuation pattern. In other words, when trending higher, traders look for a regular H&amp;S pattern and when in a downtrend, for an inverse one.<br \/>\nIn a regular H&amp;S pattern, the entry is typically just below the neckline, and the stop is above the right shoulder. For an inverse H&amp;S pattern, the entry is typically just above the neckline and the stop is below the right shoulder. The measured target from the entry point is equal to the distance from the top of the head to the neckline.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><p><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-15.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-15.png' alt='head and shoulder&#039;s pattern' title='patterns-1-15'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_18\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"18\"] <\/div><\/section><br \/>\n<div style='height:15px' class='hr hr-invisible  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-16.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-16.png' alt='Inverted head and shoulder&#039;s pattern' title='patterns-1-16'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div  class='hr hr-short hr-center  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3     '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Cup and Handle<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>A Cup and Handle pattern has the shape of a cup profile, with the handle always on the right side (regardless whether it\u2019s a regular or inverse C&amp;H pattern). It is formed by: (a) a gradual counter-trend move (the beginning of which is the first point of a neckline), (b) a return to the neckline, (c) another counter-trend move which is always smaller in magnitude, and finally (d) another retest &amp; break of the neckline.<\/p>\n<p>The breakout past the neckline usually is powerful as it triggers stops of traders who had built counter-trend positions anticipating a possible reversal. When trading a C&amp;H pattern the entry is just beyond the neckline and the measured target is equal to the distance from the extreme of the cup (note: not the handle) counter-trend move to the neckline.<\/p>\n<\/div><\/section><\/p><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding first  \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-18.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-18.png' alt='Cup and Handle Pattern' title='Cup and Handle Pattern'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div class=\"flex_column av_one_half  flex_column_div av-zero-column-padding   \" style='margin-top:0px; margin-bottom:0px; border-radius:0px; '><div class='avia-image-container  av-styling-    avia-align-center '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><a href='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-17.png' class='avia_image'  ><img class='avia_image ' src='https:\/\/www.forexanalytix.com\/blog\/wp-content\/uploads\/2016\/09\/Patterns-1-17.png' alt='Inverted Cup and Handle Pattern' title='Inverted Cup and Handle Pattern'  itemprop=\"thumbnailUrl\"  \/><\/a><\/div><\/div><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  \" style='border-radius:0px; '><p><section class=\"avia_codeblock_section  avia_code_block_19\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"19\"] <\/div><\/section><br \/>\n<div style='padding-bottom:0px;font-size:20px;' class='av-special-heading av-special-heading-h2  blockquote modern-quote  av-inherit-size '><h2 class='av-special-heading-tag '  itemprop=\"headline\"  >Common Technical Indicators<\/h2><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3    '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >RSI<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_20\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"20\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>The Relative Strength Index (RSI) is an indicator that shows momentum. It measures the magnitude and timing of up or down moves of an instrument. The definition is the following:<br \/>\nRSI = 100 \u2013 100 \/ (1+RS)<br \/>\n(Where RS is equal to the average gains divided by the average losses for that specific period)<\/p>\n<p>The RSI is a relatively simple indicator, but a very powerful one. RSI values below 30 are considered to be oversold (i.e. the instrument may be undervalued) and conversely RSI values above 70 are considered to be overbought (i.e. the instrument may be overvalued).<\/p>\n<p>The RSI can often \u201clead\u201d the price action of the underlying instrument, in which case it\u2019s said to have RSI divergence. For example, if an instrument\u2019s price is going higher but the RSI is dropping, that often indicates that the instrument\u2019s price will soon follow lower.<\/p>\n<h3><\/h3>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3    '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Moving Averages<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"avia_codeblock_section  avia_code_block_21\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_codeblock '  itemprop=\"text\" > [avia_codeblock_placeholder uid=\"21\"] <\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Moving Averages (MA) are widely used indicators for an important reason: by filtering out short-term price fluctuations, they smooth out the price sequence and hence make it much clearer to see the bigger picture.<\/p>\n<p>The calculation of MAs is very simple \u2013 every data point is the average of the specified number of previous data points (for example, a 100-day MA averages the latest 100 days of daily data points in order to produce the next one). There are two popular types of MAs:<\/p>\n<ul>\n<li>Simple Moving Average (SMA) \u2013 the simple average of the data points.<\/li>\n<li>Exponential Moving Average (EMA) \u2013 an average of the data points that gives more weight to the most recent points.<\/li>\n<\/ul>\n<p>At ForexAnalytix we usually track the 50-day and 200-day SMAs, which are the most commonly used MAs in the market. These particular MAs are very useful indicators when looking at the medium term view of an instrument.<\/p>\n<p>An important event that many analysts look for is when two MAs cross. This can often indicate a substantial change in the general trend of an instrument. The most popular of these is the \u201cGolden Cross\u201d, which occurs when a short-term MA breaks above a long-term MA (for example the 50-day MA crosses above the 200-day MA).<\/p>\n<\/div><\/section><br \/>\n<div style='padding-bottom:10px;' class='av-special-heading av-special-heading-h3    '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Volume<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Volume is an often overlooked but important indicator. It shows the associated volume for every price change, and this can be used to interpret the relative strength of the move.<\/p>\n<p>For example, a rising market should in theory be accompanied by rising volume and vice versa. Low-volume moves tend to have a higher probability of being reversed at a later stage. This is because a legitimate move higher (or lower) should be accompanied by an increased level of interest by market participants, indicating that something has changed in the fundamentals of the particular instrument.<\/p>\n<p>An interesting phenomenon near market extremes is that of market exhaustion. This is where price moves are usually very sharp in magnitude, with increased volume and short duration. This reflects human psychology where investors either try to get into a market uptrend in fear of missing out, or getting forced out in a downtrend.<\/p>\n<\/div><\/section><\/p><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":0,"parent":1016,"menu_order":3,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-3485","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Basic Technical Analysis - ForexAnalytix - Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.forexanalytix.com\/blog\/education\/basic-technical-analysis\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Basic Technical Analysis - 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