Post on 17-Aug-2014
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circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
An introduction to
PICKING DIRECTION
circletraders
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Most trading decisions are made by understanding the direction of the underlying asset.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
There are two main forms of price movement analysis…
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Technical Analysis
Fundamental Analysis
In a nutshell, technical looks at price and fundamental
looks at value.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Technical Analysis considers:
Price
Current price
Historical price
Price trends & patterns
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Technical analysis is looking at the price, without taking into consideration what the company is and does.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Fundamental Analysis considers:
Value
Company results
Industry reports
Product/service demand
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Traders tend to use technical
analysis to make decisions.
Why?
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Technical analysts believe past price movements and sentiment can give insight into future movements.
We analyse the price by using charts.
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circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Charts visually represent the price movement of a stock.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
These movements can allow traders to interpret direction through patterns and formations.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
To interpret a chart, traders first determine where support & resistance are...
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Support is the lowest price traders are willing to sell before the buyers come in and start buying the stock.
Support
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Resistance is the highest price traders are willing to buy before the sellers come in and start selling the stock.
Resistance
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
The trend is the overall direction of the stock over a longer period of time.
Trend
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Sometimes a stock moves neither up nor down, but channels between its support and resistance.
Channel
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Technical analysts look at different charts depending on what they need to know.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Open High Low Close Chart The daily OHLC price bar represents one day of trading.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
A closer look at the OHLC price bar...
Highest Price
Close (Current Price)
Lowest Price
Open Price
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Candlesticks Charts show the same information as OHLC, but highlight the relationship between opening and closing prices.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
They show a clearer picture of who is in control of the stock, and reveal patterns that other charts don’t show.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
A closer look at candlesticks...
Highest price Highest priceClosing price
Closing priceOpening price
Opening price
Lowest price Lowest price
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Line charts are a simple way of viewing price movement, and are helpful to identify support, resistance and the overall trend.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
By using technical analysis, you can look at price movement objectively...
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
And develop a systematic and methodical approach to picking direction.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
But ensure that you understand and practise it before using real money.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Would you like to learn how a professional trader uses Technical Analysis to pick direction?
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Register your details to learn more about our trading courses.
Learn the step-by-step approach a professional trader uses to pick direction...
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Warnings and important information.Any advice contained in this communication is general only and does not consider your objectives, financial situation or needs, and you should consider whether it’s appropriate for you. If you are thinking about acquiring a financial product, you should consider our Financial Services Guide (FSG) at www.traderscircle.com.au and the relevant Product Disclosure Statement (if there is one available) first.
Trading options is not suitable for everyone. There is a risk that you can lose more than the value of a trade or its underlying assets. You should only act on our recommendations if you are confident that you fully understand what you are doing.
Past returns do not reflect future returns, and it is also possible to make significant losses. We employ expert traders and use strategies that maximise returns and minimise risk. However, there is always a risk of loss when trading and investing. This is general information, and is not prepared for your specific investment objectives, financial situation or needs. Consult a licensed investment adviser before making investment decisions. TradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041.
circletradersTradersCircle Pty Ltd, ABN 65 120 660 497 is a corporate authorised representative of OzFinancial Pty Ltd, AFSL number 241041
Register your details to learn more about our trading courses.
Learn the step-by-step approach a professional trader uses to pick direction...