Support and Resistance Levels
To start your education on technical analysis, let's begin with the basics: support and resistance!
- Fibonacci Trading
- How to Use Fibonacci Retracement to Enter a Trade
- Fibonacci Retracements are NOT Foolproof
- How to Use Fibonacci Retracement with Support and Resistance
- How to Use Fibonacci Retracement with Trend Lines
- How to Use Fibonacci Retracement with Japanese Candlesticks
- Using Fibonacci Extensions to know when to take Profit
- Using Fibonacci Extensions to determine the stop to lose Less Money
- Summary: Fibonacci Trading
Popular Chart Indicators
- How to Use Bollinger Bands?
- HOW TO USE THE MACD INDICATOR
- How to Use Parabolic SAR
- How to Use the Stochastic Indicator
- How to Use RSI (Relative Strength Index)
- How to Use ADX (Average Directional Index)
- Ichimoku Kinko Hyo
- Trading with Multiple Chart Indicators
- What is the Best Technical Indicator in Forex?
- Summary: Popular Chart Indicators
Using Moving Averages: A Summary
Moving averages of many types and they are widely used in the trading industry for their vast
number of uses. The most often used types of moving averages are exponential and straightforward.
They are easy to calculate and tend to predict the trends with more accuracy.
Simple moving averages are susceptible to spikes which can reduce the accuracy. Exponential
moving averages, similarly, are based on the latest market prices which make them prone to
disillusion by sentiment. The period of the moving average decides how smooth it is so simple
moving averages are smoother than exponential and even more so with more extended period
simple moving averages. The trends can be identified faster using an exponential moving average,
but they can be less accurate, on the other hand, you might realize a trend later in simple moving
averages, but they are safer. They are also used as dynamic resistance and support levels across the
market. One way to predict these are to plot multiple moving averages on the same graph. The zone
between the two moving averages is where you can make most of your money even during choppier
times. It is hard to determine which moving average to use and there is no right answer because the
answer depends on your trading style. If your risk tolerance is higher, exponential moving average is
the way to go. But if you don’t mind missing out on early trends and prefer to stay safe, simple
moving average is the best for you.