Forex and Stocks Trading: Baby Bird Capital

Currency rates are constantly changing because the supply and demand on an asset are unstable as they change greatly due to a number of factors. Every trader`s main aim is to make profit from purchasing or selling an asset. Pattern analysis is a tool that helps traders determine the dominating trend at a certain time. There are two types of chart patterns and these are Reversal patterns and Continuation patterns. Reversal Patterns Reversal patterns act as a signal that the trend will change. The first signal of a trend reversal is the breaking of a major trend line. The bigger the pattern formed the more likely it is that there will be a more significant movement in the market. There are five types of trend reversal patterns and these are: Head and shoulders This chart pattern consists of three peaks that are known as the head and shoulders as shown in the image above. The head is always formed by a higher peak than both of the shoulders. The last price upward movement builds the nec...

This Japanese indicator is also known as the Ichimoku Kinko Hyo, which is translated to one look equilibrium chart. It is used to determine the potential support and resistance areas, determine the market trend, gauge momentum and identify entry levels.   The Ichimoku cloud consists of five plots: Tenkan-Sen (Turning line) On a daily chart, it is calculated based on the highest high and lowest low of the previous nine days. On the chart above, the turning line is the red line. It is the fastest and the most sensitive line.  Calculation: (9 period high + 9 period low)/2 2. Kijun-Sen (Standard line) This is calculated with the average of the highest high and lowest low of the previous 26 periods. On the chart above, the standard line is the blue line. Notice that it also follows the price action fairly close. Consider the relationship between the Turning Line and the Standard Line as a relationship similar to a 9 day moving average and a 26 day moving average.  Calculation...