Translated from Russian by Google Translate
24 Сентябрь 2008

Figures of technical analysis. Introduction

Forex Market was not always as it is today. Numerous innovations introduced at the request of time radically changed the whole system of currency market. This same type of Forex market has gained in the late 70-ies of the XX century. The changes occurred as a result of the transition from the Bretton Woods system to a system of floating rates. To date Forex market - this is the only market of global proportions, which operates around the clock. For ordinary investors a unique opportunity to carry out trade transactions in the financial markets in different regions of land in the markets of Europe, America, Asia, thanks to the emergence of a global communications network. Twenty-four-hour access to the currency market allows transactions at any convenient time trader. In general, some convenience.


But it was not always the case. At a time when computer technology has yet to make their first steps on the path to perfection, traders had to apply for the technical analysis of primitive techniques. Reliable pointers market movements at the time were the graphic figures, which were important guidelines for any investor that time. The reality today is such that a trader willing to help reach the many elements of technical analysis. As for the graphic figures, it seems unwise to neglect, as well as analyzing them can be obtained much useful information. It is for this reason that any experienced trader, regardless of the trading scheme and preferences of technical analysis is unlikely to ignore those attributes that are time tested.

The advantage of the technical pieces that they can work in any market, whether the stock market or currency market. With regard to temporary periods, there also are comparable. Graphic figures perfectly fit into any time intervals, providing investors the information on a given period of time.

But let us return to those times when it has not yet been advanced software, and technical analysis was conducted using pencil and ruler. In those days, traders preferred to long term, so the analysis of financial markets was held for the longest time interval. Therefore, all pieces of technical analysis that were used at the time were opened to long-time intervals. They later proved the appropriateness of their use in these intervals. In fact, while most were subjected to analysis of longer intervals, starting daily schedules to monthly. Think about yourself, what was the meaning to carry out manually on paper are applied to build a short time interval, for example, build time schedules. It would take a long time, and the work it would be very routine and hardly lived up to its use. Therefore, all actions carried out on a long slots from daytime schedules.

Later came software, which allows for actions in a short time interval. With the help of modern software can be implemented for constructing any time interval, prilazhivaya for the least effort. At this point it makes no labor to build pieces of technical analysis for a short period of time, whether minute or pyatiminutnye graphics. It is a global computerization of the market, he divided into supporters of trade on the short time interval, called Intrada (vnutridnevnaya trade), and supporters of trade at long intervals.

Basically, trade Intrada prefer to individual investors. This is due, firstly, that for the short-term trade requires a much smaller deposit than for long-term. Secondly, many traders trade on the Forex market is not the main place of work, so these traders primarily focus on quick profits than long-term forecasts calling for a more serious approach to the study of the trade.

In trading on the daily chart a trader has to take risks off for protective orders, it turned out the order of 250-300 points (when trading large lots). This suggests that the trader risked much of their capital. Regarding vnutridnevnoy trade, it is much easier. The size of the stop-Lossov normally not exceed 50 points (all depends on the volatility of the currency pair), for certain currency pairs, with greater volatility this figure may be increased to 100 or even up to 150 points. In any case, the figure is much lower than when trading-oriented long term. If you look at this issue in context, it can be concluded that all elements of technical analysis to the application in different markets and different time intervals. But do not forget that many elements that are compatible with the time schedules will be totally unsuitable for analysis day graphs. This suggests that some elements of technical analysis is strictly uzkoprofilnymi and are applicable only in certain circumstances.

Regarding the use of graphics in trade figures, there are not so simple as it might seem at first glance. Various literature, means divorced now quite a number of widely sanctifies all aspects of technical analysis. But the problem is that the literature describes a purely standard patterns of different elements. This suggests that there is no ideal model, there is only a stereotype, example. And, knowing this pattern, a trader may recognize this or that figure, even with its heavy zavualirovannosti. Hence the conclusion: there is no ideal model that could work equally well in all the schedules and time intervals. There is a standard model, pattern, knowing that we can come to the conclusion that there is a timetable for a figure.

To date figures of technical analysis are widely used in commercial systems. This application provides a dual effect. On the one hand, these features gives a good signal for the continuation or turn the trend. On the other hand, the definition of figures is quite a challenge for mechanical trading system, because sometimes (as noted above) they are quite disguised, and to determine their possible only with the direct analysis of the situation by the trader. This suggests that the trading system - this is only a mechanic, devoid of the human factor.

In summary, it is worth noting that to date figures of technical analysis is a reliable informative element of which is due to the need to obtain timely information on changes in market conditions. It is therefore studying the matter, in our view, is quite an effective way to study the behavior of the market in an ever-changing environment.

The article reviewed the fundamental provisions relating to the figures of technical analysis. A more detailed examination pieces of technical analysis, we podvergnem in our next articles.