The trendline is a very common tool used in technical analysis. In fact, its role is very important, because most good trading strategy it is a trend-following trading price movement. If we can draw a trendline correctly, then these lines can be as accurate as other methods of trading. So prepare yourself to better recognize simple line called this trendline, which unfortunately a lot of overlooked by traders. Lots of traders are still wrong in drawing a trendline, whereas simple lines are the core of technical analysis along with support and resistance.

 

OK, before going any further, we will discuss the types of trends first. Basically, there are only three trends: rising (uptrend), down (downtrend) and flat (sideways). We will discuss them one by one.

 

1. The upward trend (uptrend)

It’s simple: the ascending trend (uptrend) is the state when prices are moving up. But still, there are prerequisites to determine that the market is in an uptrend. Consider the following picture.

Caption: P = Peak (Peak), L = Valley (Trough)

 

Prerequisites uptrend is their series of PEAK (peak) of the higher and TROUGH (valley) were also higher. Because of the word “series”, there should be more than one. That is, there must be a minimum of two peaks in the two valleys MORE AND HIGH.

 

Examples uptrend in the candlestick chart:

 

2. Downtrend (downtrend)

Unnecessarily complicated-complicated: down trend (downtrend) is the state when prices are moving down. But as the uptrend, there are also prerequisites.

Caption: P = Peak (Peak), L = Valley (Trough)

Prerequisites downtrend is their series of PEAK (peak) increasingly valley and TROUGH (valley) were also lower. Because of the word “series”, then there should be more than one. That is, there must be a minimum of two peaks in the two valleys MORE AND LOW.

Example downtrend on a candlestick chart:

 

3. Flat (sideways)

Well, this is too simple. It means not sideway movement uptrend and downtrend instead. What does it mean? Yes, flat course. Remain there up and down but is limited in a certain range. In other words, there must be on the uptrend or downtrend can not be found.

Caption: P = Peak (Peak), L = Valley (Trough)

 

Example sideways on a candlestick chart:

MACD and Parabolic SAR

 

At this time, we will try and analyze a forex trading strategies using the indicator MACD Crossover with Parabolic SAR indicator in chart 1 hour late. The second indicator is a standard technical tool owned by Metatrader.

 

In the example graph below, the pair that will be used is the EUR / USD with a 1 hourly chart which at the bottom of the chart is the MACD indicator, while at the top of the chart is the Parabolic SAR indicator with the green dotted line.

 

 

In the graph above, there are two scenarios that must be considered based on the strategy that we will discuss. Starting from the left side, and around 05:00, June 27, 2014, we see the indicator MACD signal line penetrates from the bottom to the top which indicates the price will move up, and added a few moments later Parabolic SAR indicator also gives an indication will move to the top which is marked by the dot indicator is below price.

 

With anticipation, the price will continue moving upwards until about noon on June 30, 2014, when the dot parabolic SAR indicator is above price start giving confusing signals.

 

For this trade MACD indicator has done a crossover on the signal line and confirmed by dot parabolic SAR indicator moves above the price which are the exit point which gives a potential 70-point advantage.

 

Some time later, on July 2, 2014, shows that the Parabolic SAR indicator moves above the price which are followed by the MACD indicator moves down through the line signal and generating price moves in line with expectations when the Parabolic SAR indicator moves below the price. The result was a profit of about 80 pips, with the profits to be taken when a signal of price moves back below the Parabolic SAR indicator.

 

Easy … right? But be aware that this strategy should be tried first on a demo account so that we can have the right feel when we use.

 

MACD Divergence or Convergence

 

This strategy is the most basic strategies for utilizing the indicator MACD crossover by using a divergence or convergence between price and indicator is a signal that is considered important by technical analysts and consequently regarded as a great opportunity when the signal has been identified.

 

In the 4-hourly chart, the pair EUR / JPY

 

 

The MACD indicator successfully made the highest bar on 4 April 2014 and started moving downtrend around June 9, 2014. On the other hand, the price continues to move higher and higher even against the MACD indicator which consolidate into a triangular pattern on the side of creating a pattern of divergence with the MACD.

 

Furthermore, the MACD indicator continues to move downwards to penetrate the signal line on June 10, 2014, and finally, downtrend and the price moves MACD indicator confirms movement breakout move down the final profit of about 130 points if a trader opens position near the entry to crossover.

 

Indeed, the divergence between price and indicator signals a change in the long term, as seen by the movement of prices in the chart above.

In the world of forex trading, when people talk about the technical analysis that first comes to mind is a graph (chart). The technician usually do use charts because it is the easiest way to visualize the data of price movements over time. We can draw a graph to help us identify trends and find patterns that could potentially lead us to achieve an incredible opportunity.

 

There are three types of charts in technical analysis,  will be explained one by one.

 

1. Line chart

Line chart is a graph of the simplest depicted as a line connecting the closing prices. For example: in a few days in a row trading closed at a price of 100, 200, 150, 250 … then the price levels are connected by a straight line. With this graph we can see the general price movement within a specific time period.

 

An example is shown below:

 

2. Bar chart

The bar chart is slightly more complicated than the line chart. Chart provides information on the type of the opening price, closing, highest and lowest prices within a certain time period. Because it has such information, this chart also called OHLC chart (Open-High-Low-Close). Here is the basic form of a bar chart:

 

 

 

The lower end of this chart is the lowest price ever traded within a specific time period, while the upper end is the highest price. The vertical lines represent the range (range) price in that time period. Small horizontal line which is located on the left is the opening price while those on the right is the closing price. In the above example, the opening of the nutrient are lower than the closing price. However, the opening price may be higher than the closing price.

 

Examples bar chart in the chart is as follows:

 

In simple terms we can say that the bar is a period of time, whether it be one month, one week, one day, one hour, or even minute. Depending on the time frame of how long we plot the chart.

 

3. Candlestick chart

Named the “candlestick” because it looks like with a candle. His full name is “Japanese candlestick chart” because supposedly he comes from Sakura country. Chart of this type provides the exact same information with a bar chart, only “posture” over her “sexy”.

 

 

The basic shape and how to read is as follows: