Forex is able to generate significant profits. To be successful in this case, you need to know the techniques of technical analysis. It can be used to predict future pricing behavior. Graphical analysis is an integral part of the technical. It is very popular with traders all over the world. The methodology is based on finding on the chart of currency pairs some of the patterns that indicate the most likely scenario of events. Below we take a look at one of them, the Bear Flag. You will learn what a shape is and how it can be used for profit.
The main feature of
“Bear Flag” is the drawing of graphical analysis, which occurs after the momentum of the downward trend in the parent format. Indicates a high probability of breaking the channel towards the dominant trend. The drawing consists of two elements:
Flagstock. Initial downward movement. Flag. Correction up. Bear Flag is able to give both real and false signals. The first according to statistics much more. To be sure of this, simply open the quotes of any currency pair to find the form of graphic analysis you are looking for. You’ll see that in most cases, this pattern correctly predicts the course of events.
In order to properly analyse financial markets, it is necessary to do so within different time frameworks. The appearance of the bear flag on the M15-M30 may indicate a new wave of upward trend correction on H1-H4. In such a situation, after working out the movement, according to the formula, the price of assets is able to rise sharply. This is just one example. Therefore, the analysis of financial markets should be approached comprehensively.
Additional technical tools can be used as a filter for false shape signals. For example, indicators and oscillators. Elliott’s wave theory can be a great addition to graphical analysis.
Recommendations for Beginners
Forex trading means not only correct technical analysis, but also proper money management. Due attention should be paid to wealth management. A balanced distribution of funds is a key factor in successful Forex trading. Never use more than 5-10% deposit in one transaction. Otherwise, one operation that brings can destroy all previously accumulated profits. This approach will allow you to make trading as safe and efficient as possible.
The “Bear Flag” post first appeared on G-Forex.net.