Technical Analysis

Hull Moving Average – Ultimate Guide

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Description of Hull moving average (HMA), a little-known type of moving average that almost eliminates lag in relation to price action compared to traditional moving averages.

A moving average over the price of a financial asset, such as a stock or currency pair, is a high-value trend indicator. It is possibly the most famous and widely used trading indicator of all.

Typically, the three most commonly used classic moving averages are as follows: simple, exponential, and weighted.

But today we are going to explain a little-known moving average, which is considered by many to be one of the best that exists.

It is the Hull moving average.

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The QQE (Quantitative Qualitative Estimation) Technical Indicator

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The Quantitative Qualitative Estimation indicator (abbreviated QQE) is a mystery since nobody currently knows who its author is. Originally designed to create an indicator that is capable of signaling the trend while detecting overbought and oversold levels, the QQE consists of a smoothed version of the RSI on which two dynamic levels are calculated (Fast Trailing Level and Slow Trailing … Read more

Bull Trap and Bear Trap – Traps in the markets

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In this article, we are going to explain the most common traps in the markets, known as bull trap and bear trap, how we can avoid them and, above all, how we can take advantage of these market conditions. Pay attention, because this article is going to take you from the losers side and put you on the side of the smart traders.

The traps can be bullish or bearish. The traps for buyers are called bull traps and the traps for sellers are called bear traps. Generically, we sometimes refer to a trap as a swing trap.

First of all, we will look at how a market trap is formed. After all, it is simply a thing that is not what it seems to be. The price goes in one direction and we, as rebound hunters, wait for the right moment to open a new position in the opposite direction. However, it is a trap! Now that we are inside, the price continues with its previous movement, destroying our idea of making money.

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What types of indicators do I need in my trading strategy?

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As traders that we are, or pretend to be, we will spend most of the time looking for the best time to enter the market in a certain direction. In this search, we will use some tools such as technical indicators. From my point of view, any trader who bases his trading on technical analysis should use at least 4 types of indicators.

Well, rather, you should use those indicators that respond to the 4 basic trading needs: recognize the prevailing trend -> confirm the trend -> find the best entry -> find the best exit. These needs can be covered with the information of 1 or several indicators. Thus, I will classify the indicators into 4 categories according to the need they will cover, although this classification is for illustrative purposes only.

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Types of Indicators in Technical Analysis

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To perform a consistent technical analysis, it is necessary to know what are the most important indicators to make our trading decisions. If you are starting your career in the world of trading, the price charts of different currency pairs can be overwhelming at first. In addition, it is confusing to know what are the most appropriate technical indicators to study for each price chart.

In this article, we are going to see the four basic groups of technical indicators that exist based on the information that each one presents. In ForexDominion we already have several articles that explain exactly how all these financial indicators work and how you can use them to analyze trends, price objectives, and strategies. Therefore, we are not going to focus on saying which type of technical indicator is the best, since each trader has its own tastes and strategies, neither in specific details of the indicators but in the general characteristics of these analysis tools, since our goal is to help the reader to better understand each indicator and its use.

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Gaps in Forex – Definition and Main Gaps Types

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Do you know what a GAP is in Forex? The foreign exchange market has a range of fluctuations in its transactions, which can be predicted through chart analysis and other market analysis tools. However, this fluctuation can cause sudden “jumps” in the price of a currency, without giving opportunity for transactions between one price and another. This is known as gap in Forex.

Therefore, we can define a price gap as a breakout in the continuity in the price line with respect to time. It occurs when the price experiences an upward or downward movement without any transaction between the previous price and the current price.

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The ConnorsRSI Indicator – Calculation and Strategy

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Before analyzing this technical tool in detail, I have to clarify that this indicator developed by Larry Connors is not exactly the same as that used in the RSI2 strategy (a simple 2-period RSI), although the strategy that we will see throughout the article has some similarity, although with some additional twist. But let’s not entertain ourselves, let’s start with the preliminaries: what is the ConnorsRSI?

The ConnorsRSI Formula

The ConnorsRSI indicator formula consists of 3 elements:

1-) An RSI of 3 periods, in order to measure the momentum of the price in the short term.

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A small turn to stop loss with ATRs: Kase DevStop stop loss

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When I think about how to adjust the level of stop loss to volatility, the first thing that comes to mind are the stop losses calculated according to the ATR. It is a dynamic stop loss type that fits very well to trend following.

But today’s question is: are there other ways to calculate a stop loss adjusted to volatility? A good response has been given to me by a blog reader asking me about the Kase DevStop.

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Cup with Handle Pattern – Definition and Features

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One of the most useful chart price patterns in trading is the the cup and handle pattern. It does not appear very often in the Forex market but when it appears the chances of a good entry are very large. As with many chart patterns, its use is recommended mainly in long-term graphics and not so much in short-term time frames. The cup and handle formation consists of two parts. The first part is a low U-shaped formation that forms the “cup.” After the cup a consolidation period appears that forms the handle, the handle of the cup.

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