MEGFI D Technical analysis. Technical analysis of financial markets. Full handbook on trading methods and practice. List of basic moments in technical analysis of futures markets
Technical analysis Merphy - The phrase, familiar to every trader who ever wondered the search for better literature on technical analysis. Many of his work acquired world fame for the simple language of the presentation of complex things. John Murphy Books "Technical Analysis financial markets. Theory and Practice "and" Intermal Technical Analysis "read each self-respecting trader.
John Murphy combined the people of two professions - a talented writer and an experienced trader who did not trade only when the market was closed. Books written by John will be relevant both for traders and long-term investors. In his works, he explored all issues relating to technical analysis. Indicators, resistance / support levels, trends, Elliota waves, - All this is reflected on the pages of books written by him. For their achievements, Murphy was awarded various awards. The most important reward - from IFTA - International Federation Technical analysis (yes - yes, there is also such a), which he was awarded to contribute to the development of technical analysis science.
John Murphy "Technical Analysis of Financial Markets" (reissued)
Book of Murphy "Technical Analysis futures markets. Theory and Practice "is currently considered to be the Bible of Technical Analysis and is recommended for reading everyone who is related to trading and investment.
On the pages of the book translated into many languages \u200b\u200bof the world, the material about the applicability of technical analysis to all areas where there are price movement schedules. A book consisting of 16 chapters gives a reader full information About technical analysis, about narrow areas of analysis with a rather large set of cases. No topic from the field of technical analysis that has not found its reflection on the pages of this book. The book begins with the technical analysis philosophy, in the second chapter, the writer describes the main postulates from the DOU theory, after smoothly proceeds to the issue of building graphs with a detailed description of the features and disadvantages of each type separately. The remaining chapters discusses trends, models of fracture and continue trend, the significance of volumes, moving averages: everything that needs a trader to work in the market.
Laws of John Murphy
For competent work on rule Trend Is Your Frend Murphy formulated 5 basic rules. To begin with, he recommends mapping a trend. To do this, it is necessary to understand that now on the market is the main movement or corrective. An increase in scale will help identify the main trend, which is important for all categories of traders.
On this graph of gold (M30) we see the fleece movement.
But in the following figure (H4) you can observe a downward trend. Therefore B. current situation It is better to open positions only from the upper limit on the decline, and not work in both directions.
Gold graph H4. The following rule shows that it is necessary to follow the selected trend.
On the chart below the upper border of the channel can be used to open the position to reduce.
Murphy warns that there are always kickbacks on the market. In his book, he recommends using classic resistance levels along with Fibonacci levels. Fibonacci levels are preferred when determining kickbacks.
On the chart below, you can observe triple confirmation of the upward trend in a pair of USDCAD.
The last rule is associated with the use of support and resistance levels. As a rule, the schedule stops its movement, reaching any important level. The accumulation of several lines of one point is a good moment to open the position.
To work on the trend market it is best to use moving averages. The intersection of sliding is a good moment to open the position. The value of moving averages must be selected by independently, focusing on their trading style.
RSI and Stochastic
To determine the turns of the trend, Murphy recommends using RSI and Stochastic oscillators. Indicators operate in the range from 0 to 100. Shows overbought zones (more than 70) and oversold (below 30). For overboughtness above 80 and oversold below 20. The discrepancy between these indicators is often talking about the reversal of the market, and during trade in the corridor, the indicators will complement each other and talk about a new movement. To determine the presence of a trend on the market, you must use the ADX indicator. It will show both the presence of a trend and its direction.
Murphy also pays great attention to the issue of the availability of volume and open interest. These are very important parameters in the futures market. Murphy says that the volume always goes before the price. A large volume should take place in the direction of the prevailing trend. If this is not observed, this indicates the emergency trend in the market.
Increasing open interest speaks of the receipt of funds to maintain the trend present.
John Murphy works not only in the field of technical analysis. The book that made his name is popular - "Intermal Analysis of Financial Markets" is more like philosophical reasoning on the relationship of all world stock exchanges. John himself on the pages of the book argues that the market is a boiler in which money simply flows from one state to another, but everyone also remains in this boiler. The recent crisis associated with the fall in oil prices has given a powerful impulse to form a new rising trend on gold, which has fallen until that time. Therefore, the author calls readers to seek the connection between at first glance with unrelated things. If you apply for example with a drop in oil prices. Investors left oil, they needed a reliable tool. This time they became gold, the prices of it began to grow rapidly. And such examples mass, if conducting a more detailed market analysis.
Guru himself is constantly learning and calls for all his followers.
Technical analysis - skill, improving experience and learning. Always be a student and keep learning
John Murphy
Technical Analysis of The Futures Markets:
A Comprehensive Guide to Trading Methods and Applications
New York Institute of Finance A Prentice Hall Company
John J. Murphy
Technical analysis of futures markets:
Theory and practice
Moscow Falcon 1996.
Translation from English: Novitskaya O., Sidorov V.
Scientific editor Candidate of Economic Sciences Samotev I.
John J. Murphy
Technical analysis of futures markets: theory and practice. - M.: Sokol, 1996. - 592c.
In this book, the theoretical foundations of technical analysis and methods for its practical application are also considered in detail in the affordable form. The author leading a world-famous technical analysis specialist convincingly proves the need to use technical methods for predicting price and successful financial operations.
The book is a basic manual for technical analysis not only futures, as well as shares and other financial instruments. It is rightly considered the "Bible of Technical Analysis".
The book is designed for both novice players and experienced specialists of the exchange and over-the-counter markets.
"Technical analysis of futures markets" "translated into eleven languages \u200b\u200bwas published in many countries and for the first time enters Russian.
Copyright © 1986 by Prentice Hall Au Rights Reserved
Preface 8.
Chapter 1. Technical Analysis Philosophy 13
Entry 13.
Philosophical basis of technical analysis 13
Comparison of technical and fundamental forecasting 15
Type of analysis and timing 17
Flexibility and adaptation capacity of technical analysis 17
Technical analysis in relation to various means of trading 18
Technical analysis for various time segments 18
Economic forecasting 20.
Technical analyst or graphic? 21.
A brief comparison of technical analysis on the stock and futures markets 22
Criticism of technical analysis 25
The theory of "random events" 28
Conclusion 30.
Chapter 2. Dow 31 Theory
Entry 31.
Basic provisions 32.
Use of closing prices and the presence of lines 37
Criticism of the theory of DOU 37
Conclusions 38.
Conclusion 38.
Chapter 3. Building charts 40
Entry 40.
Types of charts 40.
Arithmetic and logarithmic scales 44
Building day column graphics: price, volume and open interest 45
Volume and open interest 46
How to apply data on the volume and open interest on grain contracts 50
What schedule is better - ready or homemade? fifty
Weekly and monthly column graphics 51
Conclusion 53.
Chapter 4. Trend and its main characteristics 55
Determination of the trend 55.
The trend has three directions 56
Three types of trends 57
Support and resistance 59
Tren Yes 67
Faurest principle 74.
The importance of the number 3 75
Relative steepness trend line 76
Channel line 79.
Percentage Retracements (Percentage Retracements) 83
High-speed resistance lines 85
Framer Day 88.
Price gaps 92.
Conclusions 96.
Chapter 5. Basic Strots Models 97
Entry 97.
Price models 97.
Two types of models: fracture models and continued trends 97
Model of fracture "Head and shoulders" 100
Value of trade 103
Determination of price guidelines 103
Inverted model "Head and shoulders" 105
Complex models "Head and shoulders" 107
Tactics 108.
Failed model "Head and shoulders" 108
"Head and shoulders" as a consolidation model 109
Triple peak and triple base 109
Double Top and Double Base 111
Deviations from ideal models 114
"Soccer" or rounded vertices and base models 118
His book "," reveals us everything, and also explains how they are used in stock trade.
Technical analysis of financial markets - about the author of the book, trader John Murphy
In the consciousness of people (it was so possible), which are related to activities on various exchanges and markets, certain names are firmly contacted with certain directions. For example, if we are talking about mutual funds, then we immediately remember Peter Lynch, when the conversation comes to hedging, then I remember George Soros. Well, and when someone tells the technical analysis of financial markets, then in thoughts immediately pops up the name John Murphy, which became for a whole generation of speculators with almost synonymous with the concept of technologies. What is this person?
- a well-known technical analyst who wrote a few wonderful books, including the manual - "Technical Analysis of Financial Markets", which are available for download, for download, free of charge in PDF format, is the president of such world famous companies: this is "Murphymorris Inc." and finally Murphymorris Money Of Management Corp.
The second company specializes in capital management and its direct work has been introduced a huge number of concepts applied by John Murphy himself in their more than 30-year-old trader career.
Overview of the book "Technical Analysis of Financial Markets" from the author of John Murphy
In his work, "Technical Analysis of Financial Markets" Analyst John Murphy, in an affordable form and reveals everything in detail, as well as its use in practice. The Guru of Technical Analysis clearly proves to readers of the book that in modern financial markets to predict the price movement without applying technical analysis is almost impossible.
Book Bestseller - "Technical Analysis of Financial Markets", free download which can be in PDF format below, or read online, is a kind of basic manual, which can be used when trading by any financial instruments. In a circle of traders, this book is considered to be the best of technical analysis and will be useful for studying not only newcomers, but also those who have already achieved success in financial and exchange fields.
All the material set forth in the book "Technical Analysis of Financial Markets" is fully structured, so there should be no difficulties in learning from readers.
The main topics that John Murphy reveals us in their manual (reference book) include:
- basics of technical analysis and graphics;
- what should be aware of the trend and how to make graphs;
- price models (and others);
- tactics and strategies of trade, market indices and temporary cycles.
In the book, John Murphy cites several hundred living graphic examples with detailed explanations, so examine the material set out in it, recommended to everyone who is interested in trade on stock exchanges and markets.
John Murphy and its rules in conducting technical analysis
So, what does the author of the book on the analyze of financial markets mean in technical analysis? First of all, he recommends examining a trend map, that is, to analyze long-term charts. It is necessary to start with the study of monthly, well, and weekly charts containing several previous years. A large scale of the "Market Card" will provide you with the best visibility of long-term prospects. And only after the detection of a long-term trend, proceed to the analysis.
Deciding with the trend you need to follow it. Trends on the market can have a different character - short-term, intermediate and long-term. To begin with, decide how you are going to conduct trading to use the corresponding graphs.
It is necessary to make sure that you traded you in the direction of the selected trend.
Sell \u200b\u200bat the top with a descending trend and purchase at the bottom when the trend moves up. When trading on an intermediate trend, John Murphy recommends using weekly periods and day charts. If the bidding is underway inside the day, then use intraday and the same daytime graphics.
Determine important levels (minima / maxima, support / resistance). The best place to purchase will be the level of support, and for sale - resistance.
Do not forget to calculate rollbacks. Market correction down or up, as a rule, restore most of the previous trend. Measure the correction of an existing trend, you can in simple percentage. Most often occurs 50% on the restoration of the previous trend. The minimum recovery is basically a third of the previous market trend, and at the maximum - 2 thirds.
Technical analysis of financial markets - on universal tools describing in the book of John Murphy
Remember the simplest but effective tools - Trend lines. Draw them on schedules. To do this, you will need only 2 points on the chart and one straight. The ascending trend line is carried out according to the 2nd sequential minima, and descending on 2 consistent peaks.
As a rule, prices are often adjacent to the trend lines before resuming their movement, and the breakdown of these lines can be a signal about a trend change.
John Murphy in his manual advises traders to always follow the moving averages, since they provide the most objective signals, sales and purchases. The moving averages report the trader that the existing trend is still strong, and also confirm its change. But at the same time, they cannot indicate the inevitability of a trend change in advance, therefore John Murphy recommends applying a combination of moving averages to analyze the combination of moving averages.
Learn turns, tracking directly behind oscillators that will help identify market oversold and overbought. If the moving averages confirm the change in the trend, then the oscillators used in advance are warned about the market drop or growth, which is a signal to turn.
The most popular oscillators, which are recommended to use the author of the Technical Analysis of Financial Markets, is "" and "".
Do not forget about warning signs. John Murphy recommends using the "MACD" indicator, which combines the oscillator elements into the crossing system (MA). Purchase signals appear when fast-straight downward breaks slower and both are below the 0th mark. Signals for sale, look like a mirror image of the purchase signals. The author of the book notes that the weekly signals of the indicator at the same time priority than daily.
Well, of course, do not forget about confirmations. Watch out for open interests and finally volumes that are kind of confirmation indicators. The volume will always precede the price. Large volumes always take place in the direction of the dominant trend. Also, open interests are a confirmation of the prevailing trend. In other words, the upward trend is accompanied by increasing volumes, and descending, on the contrary - downwards.
All this, and also much more in more detail you can explore by reading the book of John Murphy Edition: "Technical Analysis of Financial Markets", which can be downloaded for free in PDF format above.
John Murphy is a famous analyst and author. He built his career in trading for a long 30 years.
It so happened that in the minds of people, individual names associated with certain directions are firmly fixed. Speaking about the hedgeal funds immediately remembers the name of George Soros, and if it is being done about mutual funds, the name of Peter Lynch is remembered.
When we hear the phrase "Technical Analysis", the name occurs in the head, which can be said, is a synonym for the concept of technical analysis for a whole generation of traders. This name is John Murphy. He is the author of one of the most popular technical analysis books, as well as an unsurpassed analyst. Recently, Murphy turned 58 years old. Now he is the president of two companies whose administration is carried out with the help of its partner Gregar Morris. One of the Companies - Murphymorris Inc. (www.murphy-morris.com) - is a network resource, which is entirely devoted to technical analysis. The second company is Murphymorris Money Management Corp. It specializes in capital management, and its work introduced concepts that Murphy himself used throughout his long 30-year-old career.
The most popular books that Murphy published are considered:
- Intermarket Technical Analysis (Intermarket Technical Analysis, John Wiley & Sons, 1991);
- « Visual investor"(The Visual Investor, Johnwiley & Sons, 1996);
- "Technical Analysis of Financial Markets" (Technical Analyis of the Financial Markets, Newyork Institute Of Finance / Prentice Hall, 1999).
The latter is considered the Bible of Technical Analysis. Since the release of this book, it has been translated into eight languages, and the Association of Technical Analytics Markets use it as the main source when testing applicants for the title of certified technical analytics
A large number of traders, as well as other representatives whose professions are somehow related to the market know Murphy in person very well. It often becomes a hero in the issues of CNBC financial news. Every Wednesday, he performs in the news, as well as once a month in the program "Trading Week".
Murphy began his market career in the 60s, when all the technical analysis was reduced to building graphs with a pencil and paper. At the beginning of the 70s, Murphy received a bachelor's degree and planned to become an analyst who would be perfectly understood in the fundamental analysis of the shares. He did not even think about becoming a technical analyst. A little later, he will say that no one taught it. He started his career from Niza himself and the first position he occupied, did not foretell any brilliant career.
Murphy said that he never wanted and did not seek to become a technical analyst. He wanted to work on Wall Street and engage securities. But due to the unfavorable situation in the labor market, he was offered the work of the Cit Financial Corporation Assistant. They needed a person who would help with the construction of graphs. Murphy did not count for a long time to linger in the company, he believed that this was only its first experience in work. But soon the technical side of the work seriously interested. Soon he will say that it is really very interested in the analysis of graphs. He read a large number of books and loved this occupation very much. Then there was no tenth of the literature, which is available today. The main source then was the book "Technical Analysis of Shares Trends" (Technical Analysis Of Stock Trends). Her authors were Edward and Magni (Edwards and Magee). Another wonderful book was Bill Jiler (Bill Jiler), but in our time she is no longer published, and you cannot find it on book counters.
Murphy began its activities in the futures market. But this, most likely, was the result of a coincidence. Because of the collapse of the stock market, many participants remained with securities in their hands, and they did not have anything to look for a better share. Murphy was at the right time in the right place. Already a few years later, the shares went up and he was able to switch to commodity markets. In the early 70s, Merrill Lynch put it with the head of the department of technical analysis of futures markets. There he worked for a large half of the 70s. Incredible boom commodity markets Then it just started.
The 70s are characterized by the development of futures and technical analysts markets. It was at that time that indicators appeared, which in our time are conventional tools for analysis. Now these indicators are embedded in the programs and are available on the Internet. Murphy tried the bulk of his time to devote to the study of capital management principles. Soon he left Merrill and began to work an independent consultant. He wrote, engaged in training and capital management. He published his work "technical analysis of futures markets" in 1986 and invested in him all the knowledge that managed to get by the time. The era of computers and the Internet began, which contributed to the acquisition of the popularity of technical analysis. Murphy became a very popular specialist. In the near future, he appeared on the Internet, as it believed that this is an excellent way to transfer information about the concepts of technical analysis.
Murphy united his forces with Greg Morris and in 1996 they jointly created the MurphyMor-ris.com resource. Initially, Murphy planned to deal with the same way he was engaged in CNBC - to train and provide consultations that related to technical analysis. He considered the Internet more modern and in a convenient way Information transmission than, for example, television.
Murphy believed that technical analysis is perfectly suitable even for a short period of time, therefore it worked mainly in medium time intervals. Short-term traders should take into account everything that happens on the market in a global understanding. Murphy was not tired of repeating and say that short-term trading is fully technical, but even a short-term trader should have the concept of market status.
The famous trader is often shared by his memories of those times when technical analysis has not yet been popular. John talks about the fact that the first indicators and techniques that were used on the stock market were the width indicators and the main moving averages. Analysis was mainly separate shares, and no one has paid attention to the sectors. He tried to follow the whole market at the same time: for the main moving averages and the shares separately. When moving to the futures contract sector, he found out that people work more creative. And when Murphy returned to the promotions in the 1980s, he was very surprised that no change was happening there. No progress was observed here. New indicators have constantly appeared on futures, it happened about once every six weeks, while stocks for several years indicators and receptions did not change at all.
Currently, technical literature contains data both about new indicators and on improved old. Murphy believed that if you do not know how to make money with the help of funds that are available now, then no new indicators will help you. Methods such as intermal analysis and sectors analysis are creative approaches in technical analysis and do not require the development of new indicators.
The difference between investors who work for promotions and futures, Murphy explained as follows. He said that futures markets demand a rather complicated approach, the timing of time has a great value. As for the stock market, the many people are fundamental analysts, and this is enough to work on the stock market and for the implementation of fundamental analysis. You can acquire anything and not sell for twenty years.
80% of traders who work on futures use graphics in their work, as their trading are very short-term, something like a degree trading, which is used when working with shares. Time is a decisive factor. Some five minutes can predetermine the finals of the transaction - profitable or unimproving. Here you can't buy and hold. That is why most of all technical research is carried out in this area. Tools that are used to determine the time of the transaction and which are still used on the stock market, were developed in the futures sector.
Murphy recalls those times and suggests that then trade occurred mainly by material goods, and the analysis had a purely technical character. And although the technical analysis has never been a large number of resources, John always experienced respect for him.
As for technical indicators, Murphy said that it should never stand still, it is necessary to constantly develop. He used a lot of technical techniques for analyzing graphs. He resorted to the use of intermal analysis, i.e. Watched the dependence of various markets. Recently, in its activities, he began to use the sector analysis. This is a fairly important type of technical analysis. Many now doubt whether it is worth working with papers in general, is it worth buying? Even Murphy cannot give an unequivocal response to such questions. Just every type of activity requires tremendous knowledge and time.
Disputes about whether the moment of choosing a transaction time is really important, last to this day. This question is relevant to the market as a whole, but not for sector analysis separately. In addition to the sector analysis, Murphy a large amount of time pays for the analysis of relative strength.
To the question, it is possible to identify paper with the help of a sector analysis, which will grow much faster than the market in the short term, Murphy is responsible that whatever trading is, he needs at least some macroeconomic analysis. If he does not know how the market trend is directed, then no short-term methods will work and will not give any results.
John Murphy treated technical analysis as science and art at the same time. But he considers the main determining factor, first of all, experience. There is also a scientific component, for example, rules and trends, which follow traders. Computer programswhich serve the signals about buying or selling are proof of the scientific component of technical analysis. Now the computer is able to recognize even graphic figures. But whatever discipline you did not work, the most important role is played by experience. There is a huge number of literature that must be studied and taking useful information. More depends on the person, one is more predisposed to this kind Other activities less.
Regarding the set of programs that allow analyzing the most complex indicators and systems, Murphy believes that they still give certain advantages. He suggests that at the same time it is necessary to follow several factors, this is: stock market, sectors, sectoral associations, separate shares, futures markets, global markets. He did not use too complex techniques over the years. John simply determined and analyzed that it was going up, and that down, as the trend line behaves, conducted an analysis of the relative strength, the level of support and resistance. He found that such concepts work very well. For a while, he even refused to use technical indicators. To improve the results, in addition to graphic technicians, Murphy used sliding averages. The main technical indicators that he used is MACD, RSI and stochastics. Regarding sectors, he paid great attention to analyzing the relative strength and analysis of relations.
Regarding the relative force, then there are many different ways her calculation. Murphy offers a way to which the market should be divided into sectors and sectoral groups. You can use different time intervals for analysis, for example, it may be a past week, last month, six months. You must notice what you need as early as possible. You can compare sectors daily, as well as determine which are strong, and which are weak. When determining the strong group, you must define the strongest stocks in this group.
Murphy constantly seeks to work in some medium-term temporary scale. His time intervals are not long-term, but also cannot be said that they are short. The same applies to the analysis, and capital management. The main interval on which it works is a temporary scale - from month to six. But giving advice on the shares and sectors, he seeks to talk about the papers that can be kept for several months.
A big advantage in analyzing graphs is that it is possible to carry out at many time-scale simultaneously. If you have already mastered the basic principles of operation of several indicators, you can choose any scale you yourself as you want.
Technical analysis can be used on any market, and this is another advantage over its fundamental analysis. The fundamental analyst disassembles and is focused only in one area, in one sector, market, etc. While the technical analyst can follow at the same time just at once. Technical analysts can learn all world markets as well as their relationship. Such an opportunity is a huge advantage of technical analysis.
The widespread dissemination of technical concepts did not greatly affected their applicability. A huge number of events occurs on the market every second. Therefore, it is not worth talking about how the negative impact of the dissemination of concepts for their applicability. When you analyze the graphics of a separate promotion, you must take into account the fact that at the moment happens with the papers in the relevant sector, the industry and the stock market as a whole. Breakthroughs will work in the event of a market growth, in the event of a fall in the market it will be very difficult to continue moving towards the breakthrough.
Technical analysts are also characteristic of mistakes. This is due to the fact that the average traders are poorly understood in technical analysis. Often they possess only the number of knowledge that will be sufficient to create a danger to their capital. Most traders believe that they know a lot, although in fact it is not. In order to learn how to understand this area, it is necessary to spend a certain amount of time and strength.
According to Murphy, start training follows from the development of the easiest concepts. The book "Visual investor", written by John, is designed not for professionals. In it, he described all his experience acquired for 30 years of work in the market. The book discusses five graphic figures that are the most basic and which immediately rush into the eyes. Among them is the "double vertex", as well as the "head and shoulders". The book describes in detail:
- building trend lines;
- definition of support levels;
- determination of resistance levels;
- rules for analyzing volumes;
- useful technical indicators;
- sectoral analysis.
If you can understand some concept of sector analysis, then after reading the book, you can do a lot.
The main mistake of people is that they strive to buy some expensive program that is intended for analysis and which contains at least 80 indicators. In such a situation, a person begins to be lost. That is why initially it is necessary to study the foundations, and only then you can proceed to the use of several indicators.
It is also worth saying that the analysis of the volume is also an important factor. Behind him must always follow. It is impossible to say that the volume is as important as the price, but also forget about it is not necessary. The most favorite indicator that Murphy uses is ON Balance Volume. Although he is very simple, but it works quite effectively. It is also necessary to ensure that the figures are formed on the flow charts. If the action began to break up, it would be good to see and jump up volume. At the time when the trend suffers over the promotion, there should be large volumes. Naturally, in positive days, volumes should be much more than in negative. These things must be constantly tracking.
It is impossible to say that graphic figures are universal in all markets. It is almost impossible to optimize them. It is simply necessary to use those tools that can be used in all markets and at the same time they will be reliable.
As for the control of risk and capital management, then all the activities of the Murphy can be divided into two parts. First, this is the site on which he, along with his partner, is engaged in technical analysis and is trying to determine the most profitable sectors and promotions, while capital management special attention Not paying. But they have a company that directly deals with capital management issues. Partners are engaged in trading portfolios of mutual funds, while guided by a very complex model based on technical analysis. Such a model makes it possible to evaluate the general climate on the market, i.e. Determine how favorable money is currently investing. If the situation is unfavorable, everyone remains with their money. If we got from the system green light, Using the relative force analysis, it is necessary to invest in the strongest mutual funds. Murphy, together with Greg Morris, advise to use feet and consider themselves conservative traders.
10 basic principles followed by John Murphy.
- Trend map.
Explore long-term graphics. Start an analysis schedule is necessary from weekly and monthly charts that cover several years. After you install a long-term trend, analyze daily charts, as well as graphics intraches. The short-term view is most likely to be misleading. Even if you use in your work only the smallest time intervals. Your successes will be much more significant if you do the same thing, only in a longer-term trend.
- Trend definition and following him.
Market trends differ in their sizes:
- long-term;
- intermediate;
- short-term.
To begin with, decide on the trend, and use the schedule corresponding to it. Make sure the trade takes place in the direction of the selected trend. If the trend is at the top, make purchases below. And on the contrary, if the trends below, sell upstairs. For trading on an intermediate trend, use day and weekly charts. If you are a detender, use day and internal charts.
- Determine the maxima and minima.
It is necessary to find resistance and support levels. Places located near support levels are the best for purchase. For sale, the best are places that are near resistance levels. It can be said that the old "High" becomes a new "Low". Relief is the opposite statement.
- Singing kickbacks.
Use percent measurement corrections. As a rule, part of the previous trend is restored by the market correction up or down. Measuring the correction of the trend takes place with the help of conventional interest. Most often there is a restoration of fifty percent of the previous trend. The minimum recovery is, as a rule, a third of the previous trend, and the maximum is two thirds. It is worth paying attention to Fibonacci levels of 38% and 62%. When a rollback occurs during an upward trend, the purchase point will be at the level of 33-38%.
- Cut lines.
You need to draw trends lines. They are the simplest and necessary elements. Direct and two points on the chart - that's all you need. Through two consecutive minimum runs the line of the rising trend, while the downlink lines pass through serial peaks. Before renewing the trend movement, prices will roll back to the trend line. The fact that the trend will change, usually flashes the impaired trend line. The trend line, which is reliable, must touch the price of at least three times. The longer the trend line is more checked, the stronger it becomes more important.
- Follow the average.
It is necessary to constantly follow the moving averages. They are able to provide objective signals for buying and selling. The lines will help you determine that the existing trend is still in force, and will help in determining its change. But the main thing is to remember that moving averages will not be able to predict the change in the trend. The most popular way to detect trading signals is a graph that consists of a combination of two moving averages. Signals are submitted at the moment when the short line intersects with longer. Good signals for trading are the intersection of the price above / below the 40-day average sliding. The best lines of the moving average are triggered in emerging markets.
- Learn reversal.
Another important point is the tracking of oscillators. With the help of oscillators, you can define overbought, as well as market oversold. Unlike moving averages, oscillators will be able to warn you about growing or falling, or that soon it will unfold sharply. The most popular are:
- Relative force index (RSI);
- Stochastics.
Both of these oscillators work in 0 to 100 mode.
For the first type, the values \u200b\u200bexceeding 70 mean that the market is overbought, below 30 - oversold. For the second type of oscillators, these values, respectively - 80 and 20. On market reversals, the oscillator discrepancy is evidenced. Such tools are best used in the trading range. The filters on daily signals can serve weekly signals, and for weekly signals, daily charts can serve.
- Pay attention to warning signs.
Conduct trade on MACD is an indicator of discrepancies of the moving average, which is based on Gerald Apple. At a time, when the fast line crosses the slow bottom and both are lower than zero, the purchase signal occurs. A signal arises for sale when a slower line crosses fast top down above the mark 0. Weekly signals are of greater importance than daily. The construction of the MACD histogram occurs using the difference of these two lines and can prevent a warning about changing the trend at earlier stages. This histogram is called "Histogram", as it uses vertical lines to display the differences between the lines on the diagram.
- Trend or not?
Resort to the help of the average directional direction index (ADX), which can help you determine, is the market in trend or in the corridor. It measures:
- market direction;
- the degree of market trend.
About the fact that there is a strong trend is evidenced by the increase in the ADX line. When the ADX line falls, this indicates the presence of a corridor, as well as the absence of a trend. When the ADX line rises to take advantage of sliding media; When the ADX-oscillators drop is dropped. When building the ADX line, the trader can determine which style of trade, and which set of indicators is better to choose for the current trading situation.
- Remember confirmation.
Important indicators of confirmation in the markets are the volume and open interest. Price is preceded by volume. An important fact is the guarantee that large volumes should be in the direction of the trend that prevails. When the trend climb occurs, a large amount should be seen in the days of growth. An increase in open interest says that the money supports the trend that prevails. But the decline in open interest can only say that the trend will turn out soon. An increase in open interest and volume should accompany the rising trend.
Murphy suggests that technical analysis is a skill that is improved with the acquisition of experience and study. "Stay Eternal Students and do not stop learning."
The book "Technical Analysis of Futures Markets: Theory and Practice" received a vocation around the world. It is written by the world's famous technical analyst John Murphy. His creation was translated into 11 languages, so that the book was able to get to the bookshelves not one generation of traders. And it is not surprising. After all, this manual describes the basics of technical analysis and the rules for its use in practice in an affordable form, understandable not only by professionals, and even inexperienced beginners in the market of currencies, futures, shares and other financial instruments.
In his book, Murphy, technical analysis of futures markets will highlight from all the most important areas in an affordable and logical form, which would be clear even to an unprepared reader, just beginning to get acquainted with financial markets. However, it is not necessary to treat this book as an absolute manual for technical analysis. It is necessary to understand that technical analysis has many subtleties and techniques, and every day they appear even more, so the "exhaustive" book on this topic would simply be impossible to write.
In the first chapters of the book of the Ministry of Morphy, technical analysis of futures markets begins to describe with the basics. According to the author from proper use The basics primarily depends the effectiveness of technical analysis in general. After all, no matter how difficult indicators and trade systemsAll them are based on the elementary principles and concepts developed by the first traders. Only learning Aza, the reader can easily go to the study of more complex tools that are presented in subsequent chapters.
The book "Technical Analysis of Futures Markets: Theory and Practice" is set forth by the author in such a sequence so that even an unprepared reader can easily perceive every new block of information. Also, this material will be useful and experienced traders, as it will help to repeat and better assimilate the well-known principles of technical analysis.
How to systematize technical analysis of futures markets?
Technical analysis includes many methods, and they all have common features and characteristics. Only seeing these intersections and rethinking technical analysis of futures markets as a whole, it is possible to be considered no longer an average trader, but an experienced technical analyst. Let us consider a number of key points, answering which you can comprehensively describe the nature of the current market situation. Note that every moment separately refers to a specific technical method.
This list is an excellent plan for technical analysis, allowing the market from all parties and assimilate the principles of using certain analytical techniques. This list is desirable to always have before your eyes to end up with you to remember to remember the technical analysis of futures markets and apply it as easily as the multiplication table.
But still we recall that this list is not absolute, so it is not only possible, but also you need to supplement your own research, covering all the main factors important to you as a technical analytics. In his book, Murphy, technical analysis of futures markets describes, among other things, as the need to decide on the decision of the main issue - the further movement of the market. It is a search for a response to him and a technical analyst is engaged. At the same time, the author notes that a solution is often among any secondary factors that other market participants can be divided into attention. Therefore, for accurate analysis and adoption of weighted investment solution It is important to consider as much factors as possible, even as it seemed minor.
List of basic moments in technical analysis of futures markets
3. Picture of long-term development on weekly and monthly charts.
4. Direction of small, intermediate and main trends: horizontal, descending or ascending.
5. Location of the main support and resistance zones.
6. The location of the most important trend lines and price channels.
7. Compliance with indicators of volume and open interest with price movement.
8. Location 33%, 50% and 66% levels of correction.
9. The presence and type of price gaps on schedules.
10. The presence of basic models of trend fracture on schedules.
11. The presence of basic models to continue trend on schedules.
12. Installation of price guidelines from the main models of fracture and continue trend.
14. The location of oscillators in the overbought / oversold area.
15. The presence of oscillators of discrepancies on schedules.
16. Displays limit values \u200b\u200bat bovine mood indices.
17. The nature of the wave for Ellioto and its form.
18. The presence of configurations on graphs from three or five waves.
19. Correction levels and projection prices in Fibonacci coefficients.
20. Approaching the next cycle on the market to significant vertices.
21. Market shift: right or left.
22. The nature of the tendency on a computer analyzer.
23. The state of the market for items of digital graphics.
Thanks to the answers to these highlights, it is possible to determine the general nature and direction of the market, in particular who dominates it - bulls or bears on it. After that, the technical analysis of futures markets can already be transferred to the preparation of the plan of your trading strategy:
1. Supporting market trend for the coming months.
2. What position to open under such market conditions: long or short?
3. Number of purchased / sold contracts.
4. What amount of the deposit can risk an incorrect forecast?
5. What profits are you counting on?
6. When to enter the market?
7. What is the type of market order?
8. Placing protective stop orders.
By conscientiously worked out by the entire list, you can find the right answers regarding the construction of your trade Strategy. This does not mean that your decision will be 100% correct, because there is always some risk, but in any case it will close as much as possible to success. Remember that technical analysis of futures markets and trade on them is based on three components: knowledge, discipline and patience.
In his book, Merphy, technical analysis of futures markets advises to begin with obtaining relevant knowledge. After that, proceed to the development of the remaining two qualities. For this, the market analysis is constantly and is carefully carried out and drafting a detailed action plan. Only after working out its plan and strategy on demo accounts can already go to real Trade. By fulfilling all the conditions, you can qualitatively increase your chances of successful work, but still one should remember that a complete guarantee of success will not give you a complete guarantee.
Simplicity - this is exactly what the Merphy technical analysis of futures markets characterizes. The author believes that it is not necessary to complicate the techniques of technical analysis. To this conclusion, he came for the long years of his work, having tried the most different technical instrumentsboth simple and complex. As a result, it determined that simple techniques are most effective, therefore, in their book, Murphy, technical analysis of futures markets advises to base on simplicity.
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