Charts Overview
These charts are built from the quotes made by FinancialSpreads.com on its trading platform. This in effect means that from the chart point of view any activity that occurs outside of our trading times is deemed not to have happened!
Most of the chart functionality is self-explanatory and you will find that you learn most about its possibilities by practice.
1). Opening a chart
To open a chart in the desired market you merely click on the chart icon to the right of the ORDER button
This will open the default chart selection in the desired market. This default setting is currently a 10-minute candlestick chart with no technical analysis attached.
2). Using the chart features
The charting package has a number of features allowing you to manipulate the data and display it in different formats:
Zoom 1  |
You can use your cursor and select an area of the chart that you wish to zoom into. |
Zoom 2  |
In the bottom right hand corner you can use these icons to zoom in and out of the whole chart. |
Draw a line  |
Use this feature to draw straight diagonal lines over your chart, which is useful for identifying trends. |
Horizontal lines  |
Horizontal lines can be added using this icon and can be used to mark support or resistance levels. |
Fibonacci  |
Fibonacci retracements can be placed by choosing a starting and ending point of the trend you are applying the analysis to. |
Edit analysis  |
By clicking on this icon you can then choose a line to adjust and replace on your chart. |
Parallel lines  |
By clicking on this icon you can then choose a line to adjust and replace on your chart. |
Delete analysis  |
Delete any lines or Fibonacci retracements you’ve added to your charts by selecting this icon. |
The Settings menu
From here you can select a number of settings from how you want the style of the prices to be displayed to what technical indicators you want added to the chart.
By filling in the various boxes your desired analysis will immediately appear on the screen. These settings can be saved as either an individual chart save (see below) or the individual analytical tools can be saved using the save icon.
Once you have created the analytical tools required you just click on the save icon and then click on delete/save. A new box will appear.
Click on "Delete/Save" and a template box will appear.
- Enter the name you would like to call your template in the "Templates to be saved or deleted" box.
- Click on "Save" at the bottom.
- You new template name will appear under "List of Saved Templates".
When you next click on the save icon the new name of your template will appear in the menu.
Saving your Chart
To save a chart simply click on the file icon in the bottom left hand corner of the chart. FinancialSpreads.com servers will save any single chart per market. The save button will save your chart with all its lines and analysis but when you click on the 'chart icon' again the chart will recreate using the default ‘10 minute’ setting. To get to your exact chart you must change the ‘period’ to your desired setting.
Printing your Chart
Once you have created your chart you may wish to print it off. Just click on the print icon, a print preview page will appear. If you need to set the size of the chart to be printed then this can be done from the Settings window under "Print Dimensions".
Description of Various Technical Analysis available with the charts
Simple moving average (MA)
The unweighted mean of the previous n data points in the time series. For example, a 10-day simple moving average closing price is the mean of the
previous 10 days' closing prices. The larger the value of n, the greater the smoothing effect and the more the MA line is displaced from the original
data.
Exponential moving average (EMA)
An exponentially weighted mean of previous data points. The parameter of an EWMA can be expressed as a proportional percentage. For example, a 10% EMA
has each time period assigned a weight that is 90% of the weight assigned to the next more recent time period.
Bollinger Bands
– The Bollinger Bands are envelopes based on a moving average and a standard deviation which makes the bands widen or narrow relative to the current
market volatility.
95% of price action will take place within the Bollinger bands and thus the Bands act as strong areas of support and resistance. It is possible at times like this to successfully trade the price rising or falling from one Bollinger line to the other.
When a trend begins and the volatility of the market increases thus the spacing of the Bollinger Bands will widen, as the trend slows down the Bollinger bands will narrow.
Parabolic SAR
The Parabolic SAR is another indicator devised by J. Welles Wilder, who also created the RSI and DMI indictors. The Parabolic SAR - or 'Stop
and Reversal' as it is otherwise known, is generally used for setting stops and following a trend in the market.
Wilder himself recommended establishing that a trend was in position first by use of other indicators such as the ADX indicator and then using the Parabolic SAR to trade in the direction of the trend. If the trend was up, then buy when the indicator moved below the price. If the trend was down, then sell when the indicator moved above the price.
The SAR direction is always the same during a trend and the trend stays in place while the SAR points stay above or below the price. When the price penetrates the SAR then a signal is given to exit the current trade and possibly look for a position to take up a new trade in the opposite direction.
MACD
MACD measures the difference between two moving averages. A positive MACD indicates that the 12-day EMA is trading above the 26-day EMA. A negative
MACD indicates that the 12-day EMA is trading below the 26-day EMA. If MACD is positive and rising, then the gap between the 12-day EMA and the 26-day
EMA is widening. This indicates that the rate-of-change of the faster moving average is higher than the rate-of-change for the slower moving average.
Positive momentum is increasing and this would be considered bullish. If MACD is negative and declining further, then the negative gap between the faster
moving average and the slower moving average is expanding. Downward momentum is accelerating and this would be considered bearish.
There are 3 common methods to interpret the MACD:
- Crossovers - When the MACD falls below the signal line it is a signal to sell. Vice versa when the MACD rises above the signal line.
- Divergence - When the security diverges from the MACD it may signal the end of the current trend. For instance, price may continue to make higher highs while MACD makes lower highs. This is an example of bearish, or negative divergence and a warning that the up trend may soon be finished.
- Overbought/Oversold - When the MACD rises dramatically (shorter moving average pulling away from longer term moving average) it is a signal the security is overbought and will soon return to normal levels.
RSI
RSI is an extremely useful, reliable indicator which is a favourite of many traders.
In general terms the RSI is an overbought/oversold indicator. In practice below 30 is considered being an oversold indication and when the RSI crosses 30 to go up, this is a buy signal. At the other end of the scale a value above 70 is considered overbought and when the RSI crosses to go below this, it gives a sell signal.
It should be noted that the RSI will form chart patterns similar to those found on the main chart, such as a double top, head and shoulders etc which may not show up in the stock/indices price, but which will give and an indication as to pending change ahead.
The RSI will also form support and resistance levels, just like the main chart and it may also diverge from the main chart direction indicating change. For example, the stock/index may make a new high, but the RSI doesn't - that's a bearish indicator. Conversely the stock/index may make a drop to a new low but the RSI moves sideways or upwards - that's a bullish indication. In these cases the price will usually follow the direction the RSI has just shown.
Williams %R
One use of the Williams %R can be on trending days, where the indicator can be used to establish entry points into the trend.
It should be remembered that the Williams %R is just and indicator and an overbought or oversold indication on it does not necessarily mean that the price is about to turn. It is better to wait for the price to actually show a marked reversal and then using the Williams %R as a confirmation of this.
Momentum
Refers to 'momentum' as the impetus, or increased activity of an item - such as a stock or index. This can be referred to as gaining momentum or losing momentum.
Volatility
For this indicator, we must chose the period (the last 10 days, for example). Then we calculate the variation of every day during this period. Then we calculate the napierian logarithm and the variation on this data. By extrapolation, we obtain the historic volatility in %.
Price Oscillator
The Price Oscillator is calculated by subtracting the short moving average by a long moving average. In its percentage form, the result is divided by the short moving average and multiplied by 100. The parameters are the numbers of days of both moving averages.
Standard Deviation
The units of the standard deviation are the same as the units of the original data making the standard deviation a linear value. The standard deviation is the square root of the variance. It is a measure of dispersion, and often used as a volatility indication.
All Technical Data Retrieved from http://www.trade2win.com/traderpedia
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