The GKFX webinar "The Trading Sessions: With simple patterns to win" on August 16, 2018 at 6 p.m. deals with statistical evaluations on the DAX, the S&P 500 and gold. In addition to discipline, risk management and the right strategy, such statistics can be of great help in identifying entry and exit points. Recurring patterns can be observed in the markets, which can also be backtested. In this GKFX webinar , expert David Pieper will present various patterns on stock indices and gold. These can be traded easily and profitably.
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Chart analysis as a basis for decision-making
The chart analysis gives traders an important decision-making basis. In contrast to fundamental analysis, the chart analysis only refers to the course of prices and sales. Economic aspects such as labor market data or economic growth figures are not considered. In chart analysis, it is assumed that all important data and information is already included in the courses. Historical price trends are used to try to obtain information for the future and assume that certain patterns in the markets are repeated regularly.
Recognize rising and falling prices in the chart
With rising (bullish ) Prices there is an excess of demand. Falling (bearish) prices represent a supply surplus. In chart analysis, the reasons for rising or falling prices only play a minor role. The analysis of charts can also be used as an early indicator of the fundamental situation. Certain price trends can signal a future development that will only show up later in economic data.
In chart analysis, graphic representations of prices, the so-called charts, are used. The line chart is the simplest form of representation. Here the individual course points are connected by lines. Certain time periods can be set in the chart. A line chart is very clear and shows market formations in a simple, easy-to-understand way.
Bar charts and candlestick charts with more information
The bar chart was developed as a further development of the line chart, in which traders receive a lot of important information from a specified time interval. A trading day can be shown here as a single bar. Traders can then see, for example, the highest and lowest price points on a trading day. This makes the bar chart more meaningful than the line chart.
The candlestick chart, which shows price trends as a candle, offers even more information. Here, traders also receive information on volatility in the desired period, for example. For example, certain patterns now help traders recognize whether a trend will reverse or continue.
Recognize bearish and bullish chart patterns
With a little practice and experience in dealing with charts, traders can Now identify ideal entry and exit points for trades using the respective chart pattern. The best-known patterns can be divided into bullish, bearish and neutral patterns. Trend reversal and trend following patterns are also known.
Bearish patterns could indicate to traders that their investment has been sold or that a position has been withdrawn. Well-known bearish patterns are double highs, triple highs and the shoulder-head-shoulder formation. Double and triple highs are clear indications of falling prices and signal the reversal of a trend. After a price rise to a new high point, the price falls. Then the price rises again, but to a lower high point than before. At the triple high, the price goes down again and then rises again to a lower high point. In both formations there follows a significant decline in the price.
Chart pattern for falling prices
The shoulder-head-shoulder formation is considered special reliable pattern to signal the reversal of a longer trend. The chart pattern shows a downward movement. After a first but weak high, there is a clear high point and then another weaker high. The inverted triangle is considered a particularly negative chart pattern. Several triangles end on the same neck line after a course loss. If the bottom line of the triangle is broken, this is an indication of whether to sell his assets.
Chart patterns with buy signals
Bullish patterns give traders a hint to buy an asset. Well-known patterns here are the double and triple depths as well as the shoulder-head-shoulder-bottom formation. Double and triple lows indicate rising prices. A trend reversal is imminent. First, a price falls to a new low point, then goes up to then fall again to a low point. However, this is not as low as before. At the triple low, the price now goes down a bit. After that, however, a significant increase in the price is announced.
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Long-term trends end
The Shoulder-head-shoulder-bottom formation indicates that a long-term trend is coming to an end. In the long term, a price increase can be assumed. The shoulder-head-shoulder-bottom formation is considered a particularly reliable pattern for a price increase. First, a course goes down slightly. This is followed by a more pronounced low and, after an increase, another lighter low. However, after these three movements, the price goes up in the long term.
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Patterns show sideways trends
In addition to these price formations, which indicate rising or falling prices, there are also neutral patterns that signal a sideways trend. When moving sideways, a course does not go down or up. Chart patterns that show sideways movements include the rectangle and the symmetrical triangle. If a price fluctuates between a support line and a resistance line, this can be shown in a rectangle. If a course fluctuates up and down again and again, this can be represented as a symmetrical triangle. A symmetrical triangle gives no indication of whether the trend continues or swings in the other direction. In contrast, a rising triangle indicates a positive trend; a falling triangle a slightly negative trend.
Trend reversal or trend continuation
Via Trend continuation pattern, traders can see whether an existing trend will continue to develop in the same direction. The trend continuation patterns include the flag and the pennant. With the flag pattern there is a short-term correction movement in the opposite direction of the actual trend. This pattern shows when a trend is interrupted for a short time and occurs after strong price movements. This also applies to the pennant pattern, in which a small, irregular triangle can be seen. The pennant is a so-called consolidation pattern.
Pay attention to trend lines
In addition to analyzing the individual patterns, traders should also pay attention to high and low points and trend lines when interpreting charts. If a trend line goes up, one speaks of a upward trend line. The downward price trend is a downtrend line. With such trend lines, traders can identify favorable times for a trade, but they should always fit their own strategy.
Resistance and support lines are also important. A support line is always below the current price in the chart. It indicates that a price is high enough to exceed buyers' interest. A resistance line lies above the current price. It indicates that the interest of the buyer exceeds the actual buying interest. A previous price increase is ended. Breaking a resistance line can turn it into a new support line. If the price breaks the support line, however, this may indicate that you should sell your investment or end your trade.
CFD trading in stock indices at GKFX
GKFX offers its traders the opportunity, among other things to trade CFDs on stock indices. If you choose the DAX as the underlying, you can trade it from ten cents per point. For this, the trader deposits a margin of two percent. The spread in CFD trading with the DAX is one point. With a transaction volume of 0.1 lot, the trader pays spreads of ten cents. Newcomers can gain initial experience in CFD trading at GKFX via a free demo account.
CFDs on gold at GKFX
In addition to other raw materials such as silver or crude oil, GKFX also offers CFD trading on gold as the underlying. Traders do not have to buy the raw material directly, but trade its price changes. Gold is popular among traders, among other things, to diversify the portfolio and hedge other positions. In CFD trading in gold, every trader deposits a margin with GKFX and can start trading from a trade size of 0.1 lot. The broker supports its traders with numerous tools and indicators for chart analysis.
Conclusion: Recognize entry and exit points in chart patterns
GKFX speaker Daniel Pieper dedicated on August 16, 2018 at 6:00 p.m. in the webinar "The Trading Sessions: With simple patterns to win" Statistics on the DAX, the S&P 500 and gold. These can be helpful for traders and represent a useful addition to the trading strategy. David Pieper presents chart patterns that are easy and profitable to trade. This can be a promising opportunity for traders to make a profit.
Chart analysis is very important for traders. Certain well-known chart patterns can give indications of buying or selling an investment instrument. Chart patterns show whether a price will go up or down and whether trends continue or reverse. Sideways trends can also be seen in chart patterns. In addition to the individual chart patterns, traders should also pay attention to trend lines as well as support and resistance lines when interpreting charts.
The chart analysis assumes that all important information on prices and price trends is already integrated in the prices themselves are. The analysis of other economic data is therefore not necessary. Often, the results of the chart analysis also affect other economic events and data later. Therefore, the chart analysis can also be used as a early indicator for the fundamental situation.
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