Foundations of Technical Analysis: Building a Trading Strategy
See these tools & methodology used in practice, Join Michael for his Weekly Strategy Webinar on Monday mornings.
In this educational series on the Foundations of Technical Analysis, we piece together the anatomy of a swing trade and discuss the tools along with the methodology used to construct a basic trade setup. Each week we focus on a core concept in technical analysis and how to implement these tools in your trading strategy. Technical analysis on whole is an extremely broad discipline and while there is no one right way to trade, certain practices can increase your chances of success overtime.
Foundations of Technical Analysis Series
- Part 1: Introduction to Basic Trendline Analysis - In part one we focus on identifying, constructing and utilizing simple trendlines -the simplest and single most important (and largely underutilized) tool in your trading arsenal.
- Part 2: Introduction to Basic Pitchfork / Median-line Analysis -The pitchfork is a simple and often misunderstood method of trendline analysis. The objective is to correctly identify the slope or gradient of a market in an effort to identify key areas of support / resistance within a given trend.
- Part 3: Introduction to Multi-Time Frame Analysis –In this guide we highlight examples of how we can implement the concepts reviewed in parts 1 & 2 across multiple-timeframes. The objective is to gain a broader perspective on where price is trading with respect to the larger trend.
- Trendline & Slope Analysis –An introduction to utilizing slope-lines and simple multi-timeframe analysis to construct a basic trade setup. Review the best practices of objective trendline analysis.
- Identifying Confluences & Opening Ranges - Identifying areas of technical confluence in both price and time can be extremely helpful in pin-pointing when & where to position your entries / stops.
- Fibonacci & RSI - An introduction to the origins and methodology of using Fibonacci and momentum in your trading. Review real-market examples of how to utilize these tools to develop a simple trade setup.
- Managing Risk – Sometimes a subtle shift in how we approach risk management (specifically stop placement) can make all the difference. A discussion on keeping your focus on the technical levels that matter, rather than an arbitrary stop and remaining discipline to a given risk/reward ratio.
- Mistakes to Avoid- We reflect on behaviors / habits to be mindful of to avoid the common pitfalls of day to day trading. While some of these concepts may seem rudimentary, they are essential in developing a more objective trading strategy
- Trade Execution- A discussion on the intricacies of trade execution. Concepts reviewed include identifying your levels, knowing when to operate, examining price action, ascertaining exhaustion / pullback plays and scaling out of positions. Click here to downloard the Lot Size Calculator used in this webinar.
- Real World Applications- Live examples of our trading methodology in practice and an outlook for the week ahead. These setups further exmiplify our technical approach and touch on key concepts disussed in this series over the past few months.
- The Power of Parallels & Analogs- An in-depth look at the USD breakdown and a discussion on the application of anaologs to identify price patterns.
- Trading the Turn- A discussion on key principles in identifying price exhaustion / turns within the broader context of the dominant trend.
- Trading Event Risk - Should event risk change the way we trade? A review of our technical approach and how to best approach trades during times of expected high volatility.
Join us for the next Foundations of Technical Analysis bi-weekly webinar on Fridays at 9:30AM ET. Click here to register free! Keep this page handy as we’ll be updating the webinar archives here.
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---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex contact him at firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.