Forex Trading Education

Overview

A Descending Triangle chart pattern is a continues price formation; when combined with a Demand Index Indicator properly, over 75% of our trading positions will be profitable. By definition, the Descending Triangle chart pattern indicate a sell pressure; You can see visually that the sellers sell at lower prices as time progress (A,B and C).

Professional trader will use Demand Index indicator in several ways. I will focus on this indicator ability to predict trend strength, so, if the indicator stays near the level of zero for any length of time (see blue rectangle in chart - lower window) we can anticipate a price breakout.

Case study - NASDAQ-100 Index Tracking Stock ETF (QQQQ) Bar Chart

Indicators and Parameters:
Descending Triangle chart pattern - continues (red) - normally formed in a few week period, and consist from an upper descending resistance line (A-B-C) and support line (2).
Demand Index (red; lower window) - calculated by the change in price and volume alike.

What Does It Mean?

Average True Range (ATR) Technical Indicator is an indicator that shows volatility of the market. It was introduced by Welles Wilder in his book "New concepts in technical trading systems".

This indicator has been used as a component of numerous other indicators and trading systems ever since.

Putting It To Use

Wilder has found that high ATR values often occur at market bottoms following a "panic" sell-off.

Overview

We usually combine swing trading with pivot points to do short-term technical analysis; nevertheless, the study and definition of swing trading, trend direction and pivot points in the market is essential for further use in forex trading studies (with or without technical indicators).

Lets focus on explaining the following terms:

• Up swing - changing direction from down swing and marking support line (pivot point).
• Down swing - changing direction from down swing and marking resistance line (pivot point).
• Double Top formation
• Double Bottom formation (opposite from double top)

Chart #01	Chart #02

Indicators and Parameters:

Bar Chart (black) - open, high, low and close; only the highs and lows are important.
Support Line (red) - drawing a support line (pivot point) after a valid change in direction from down-swing to up-swing.