The Psychological Utility of Technical Analysis

Technical analysis is sometimes studied as if it contains a grain of secret knowledge or portrays an intrinsic truth about currency movements. Often it is said that a specific chart formation will produce a specific price movement. Technical analysis does nothing of the sort. A chart is a reflection of…

Correlation in the Forex Market

Statistically speaking, correlation is the measured relationship between two units over a series of time. Correlation is measured on a range of -1 (perfect negative correlation) to 1 (perfect positive correlation). A positive correlation implies that the two units move in similar directions, the higher the correlation the closer and…

The Art of Contrarian Trading: Volume, Consolidation, Distribution, Headlines

Traders are at a stage in the market cycle that is one of the most frustrating to deal with, and where the most money gets squandered trying to work things out. This stage is when we go through a phase of consolidation, moving sideways consolidating the recent moves made, while…

This Week’s Market Outlook

The moves this week should convince anyone that had any doubt, that the correlation between equity markets and currencies remains alive and well. It was a rollercoaster, with EUR/USD oscillating between 1.4800 support and 1.5000 resistance for the better part of the week. The S&P 500 meanwhile continued to find…

Weekly Market Wrap

In currency trading, the greenback has only benefitted from lower equities and generally supportive comments from a variety of sources, with the exception of some non-conciliatory rhetoric out of the Sino-American summit. Traders were fixated all week on an alleged defense of a binary option with a range of 1.48…