Technical Analysis Tips And Tricks | ForexGen

ForexGen studies past price and volume changes in order to build up simulations on future price movements. ForexGen's analysts mainly make use of charts and financial formulas to gather enough information used in technical price speculations.

Technical analysis tips and tricks from famous traders and hedge fund managers

There are a lot of interviews with the best traders available and some have even written biographies of their trading and philosophy. Here are some of their insights.

Paul Rabar is one of the legendary turtle traders educated by Richard Dennis. Rabar has revealed to his clients that he uses a risk management system that limits exposure in each trade, each market, each sector, and each account.

He also uses risk limitation by using extensive diversification of markets traded.

Another turtle trader, Michael Carr, has stated that if you have a good trading program, the number one priority should be longevity, staying in the trading game.

This means one should stick with the system, to be there to participate and benefit when the really outstanding market opportunities come along.

For Carr, that translates into developing exceptionally good money management system that limit the severity of drawdowns, making comebacks easier.

John W Henry, the owner of Boston Redsox and a legendary trader, believes in approaching trading in a mechanical and systematic way.

Many of his ideas in this regard come from W.D. Gann, who believed that man was mechanical and that if man was mechanical, markets should be predictable because of that underpinning.

John W Henry also believes in long term trend following as a method for making money on the financial markets, meaning that the trader is trying to stay with a particular trade for months or years instead of days and weeks.

One of his main pillars of though is that if you and your system can handle volatility, which some people can’t, you make more money.

Another tip can be derived from the trading style of Louis Bacon Moore, one of the best hedge fund managers in the world. According to those that knows his trading style, say that he puts an extreme importance on risk management, which has lead to very low variation and predictability on the funds returns.

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Trading Technical Analysis Information | ForexGen

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Technical and cycle analysis is a way to try to predict trends in the financial markets, by identifying cycles that repeat themselves.

Technical analysts believe that these market cycles exist, and there are two primary reasons given as to why the cycles form:

1) Fundamentals: cycles reflect lags that affect shifts in supply and demand.

In basic manufacturing terms, when prices rise, it pays for the manufacturer to increase production.

However, as there is a lag (new plants need to be build etc) to increase supply, the increased supply will hit the market at the same time, which leads to a fall in price, leading to cycles in the marketplace.

2) Psychological: cycles reflect the psychological response of traders to price swings.

The market move in one direction for a period of time. The longer the trend, the more anxious traders become to cash their positions and positioning their trades for a movement in the opposite direction.

Many traders are willing to cash their positions on the first sign of weakness on the trend, increasing the movement in the opposite direction, which leads to cycles.

One of the first ones to use cycles based technical analysis to make money was the famous Rothschild family in Europe, which used cycle analysis on the British interest rates. Their system included three cycles, including a 40 month cycle.

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Fibonacci Technical Analysis | ForexGen

ForexGen studies past price and volume changes in order to build up simulations on future price movements. ForexGen's analysts mainly make use of charts and financial formulas to gather enough information used in technical price speculations.

Fibonacci technical analysis is based on the fibonacci numbers and the golden ratio, which exhibits itself in the nature and seemingly, in trading charts.

There are many ways in which fibonacci numbers are used in technical analysis.

For example, many who use the fibonacci levels calculate them through drawing of a trendline between two extreme points (top/bottom) of a price movement and then dividing the vertical distance by Fibonacci ratios of:

- 23.6%,
- 38.2%,
- 50%,
- 61.8% and
- 100%.

These levels provide levels of either resistance or support, depending where the current price is in relation to the fibonacci level.

If, in a bearish trend, the price is dropping towards a fibonacci level, the fibonacci level acts as a resistance and any fibonacci level above the current price acts as a support level.

On the other hand, in a bullish trend, if the price is rising towards a fibonacci level, the fibonacci level acts as a resistance level to the price movement and any fibonacci level below the current price acts as a support.

In trading, those technical analysts who use chart reading based systems often focus on levels such as those from fibonacci, and see how a test of the level goes before making further decisions on how to invest.

A fibonacci resistance, for example, often provides a chart pattern of a 'double top', which to those using chart reading technical analysis may refer to a trend reversing pattern.

The fibonacci levels are calculated from historical price trends. It is up to the trader to decide which historical trends to use for the fibonacci levels.

Most traders recommend that you are consistent with the use of data on drawing the levels, meaning that you stay consistent on your usage of daily, weekly, or monthly, or intraday data, as an example.

One can also use the ongoing price movement as the basis for drawing the levels, where the two extremes are the bottom of the trend and the most recent top.

Some have dismissed anecdotal evidence of how price movements often seem to stop at fibonacci resistance and support levels as evidence of self-fulfilling prophecy, as the fibonacci method is one of the most popular ones available, and one of the easiest to use.

ForexGen trading service performance is based on respect and appreciation which is only achieved by offering intelligent trading tools for secure online trading.

Fibonacci Retracements | ForexGen

ForexGen studies past price and volume changes in order to build up simulations on future price movements. ForexGen's analysts mainly make use of charts and financial formulas to gather enough information used in technical price speculations.

Fibonacci retracements technical analysis refers to a move where an asset retraces portion of an original move and finds support/resistance from a fibonacci level, continuing to original direction of the move.

The fibonacci levels that are used in finding fibonacci retracements are found through drawing of a trendline between two extreme points and then dividing the vertical distance by Fibonacci ratios of

- 23.6%,
- 38.2%,
- 50%,
- 61.8% and
- 100%.

The indicators for Fibonacci retracement levels are very popular for both long term and short term day traders.

With the retracement levels, you can potentially find levels of entry or exit points to trades and additional lots on a pyramid system, target prices, or stop losses.

The Fibonacci retracements are often used together with other indicators, and some fundamental analysis based traders use these levels to determine either to buy on dips or sell on rallies, depending on the direction of the move.

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