Exchange speculators conducted their trading activities more than 100 years ago and devoted themselves to studying market trends. Everyone who came to the market watched its movement and repeatedly analyzed it. These observations, as well as the experiences of the fix api trader participants allowed them to form a number of laws that are commonly called “patterns”.
The pattern, as I wrote above, is a definite market regularity, which has the property to regularly update and repeat itself. Patterns are the key tools in the technical analysis of the fix api trader. Today, the automation of the trade strategies has allowed creation of trading robots that operate on the basis of technical signals formation from patterns.
There are many trading patterns to work on the fix apiforex market, however I suggest you to consider the key ones of them.
- Reversal bar. This figure indicates the end of the trend (both ascending and descending). Also this formation is called a “hammer” or “shooting star”. However, whatever they call it, the signal does not change. A key feature of the reversal bar is the long shadow of the candle in relation to the opening and closing of the bar. Thus, the signal can be filtered using the candle’s body to its shadow ratio. Standard value should be at least 1/4. Reversalbar signals that the market setting has already changed and it is best suited to opening positions in the opposite direction from the trend movement. I would also note that the dodge can also be attributed to the reversal bars.
- The jogging figure has the same principles of work as the reversal bar, but it has other filters in its definition. Here, the ratio of the body to the shadow of the candle is not less than 1/4. But besides this, you need to consider the combination of candles. For the upward reversal by the exhibition filter, the formation of the two previous candles where the closing price is lower than the previous ones. After these candles, a reversal bar should be formed. And after it, one bar is confirmed by movement, that is, a bullish one. Thus, the transaction for the purchase is opened after the ports on the bullish candle. The signal to the sales is formed exactly on the opposite.
Figures of trend continuation:
- Flag. This technical figure indicates the moment when the ascending or descending movement continues after a certain impulse. You could watch it yourself after big fundamental data, when the quotes of the currency pair on the fix apiforex market showed a rapid rise/fall, after which there was a slight correction and lateral movement. Proceeding from this technical figure, it is necessary to open purchases after the breakdown of the upper limit of quotations.
- Double bottom (or double top). This pattern is formed on the basis of the wave cycle and indicates the continuation of the trend after the formation of the last wave. Thus, if the figure is formed, one can expect the breakdown of its boundaries with the subsequent movement of 100% of figure height.
- The head and shoulders. Similar to the previous pattern, it is formed on the basis of the wave cycle, but has a characteristic difference from one impulsive growth/decrease with smaller areas on both sides. Thus, when this figure is formed, it is necessary to expect its full lower bounds by the subsequent movement in 100% of the top of the pattern (head) to the bottom.
The list of technical patterns consists of more than two dozen different figures, but the elements mentioned above are confirmed by the time and capital of the fix api traders. Of course, not every strategy is based on these elements or they are simply not needed, as it is in the case of scalping or fixing arbitrage strategy – http://forexzzz.com/product/zzz-2-leg-arbitrage/. However, this tool will optimize your trading process and improve the financial result.