TAREK AMYUNITECHNICAL ANALYSIS1 TECHNICAL ANALYSIS AND CHARTING

TAREK AMYUNI TECHNICAL ANALYSIS 1

TECHNICAL ANALYSIS AND CHARTING


TECHNICAL ANALYSIS AND CHARTING

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04 93 95 45 97

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Assistant : Gisele Masante (Theseus) 04 93 95 45 01 WWW.globalfinance.org


BASIC PRINCIPLES









1Tiens ! Les coursmontent. Il faudraitsuivre le marché

2J ’ai loupé la consolidationmais si j’attends tropje ne profiterai jamaisde la hausseJ ’ACHETE

3J ’ai bien faitde ne pas attendre

4C ’est bon ! Je rachètele double ! A ce prix-là,c ’est une affaire !

5 Aïe ! Dès que jeretrouve mes cours,je revends

6 Mais c’est paspossible ! Ça nepeut pas durercomme ça !

7 Ca suffit ! Je coupe tout

8 J ’ai bien faitde tout vendre !

9 De toute façonça va rebaisser !

1010 Eh Eh !Je l ’avais bien dit

11Mais que sepasse-t-il ?

12Encoredes fous quivont se faireavoir !

13Et zut ! j’y vais quand même, c ’estfinalement moinscher que la première fois !

Ce qu’il ne faut surtout pas faire en bourse !




Should I buy today? What will prices be tomorrow next week, or next year? Wouldn't investing be easy if we knew the answers to these seemingly simple questions? Alas, if you are taking this class in the hope that technical analysis has the answers to these questions, I'm afraid I have to disappoint you early—it doesn't. However, if you are takingthis class with the hope that technical analysis will improve your investing, I have good news--it will!



BASIC PRINCIPLES

•Technical Analysis is not perfect…

•In technical analysis, we are dealing in probabilities

•Do not believe advertisers promising consisting easy and fast profits based on technical analysis

•Prices are determined by……………….


Prices are determined by knowledge, hopes,fearsand expectations of those already in the marketand those thinking of coming in.

It's the attitude of people that is important.


Securities never sell for what they are worth but for what people think they are worth

Market participants look ahead, anticipatefuture developments and take action now…

But not all market participants get the newsand act at the same time.


THE SUM OF THE ATTITUDE OF ALL THE PARTICIPANTSAND POTENTIAL PARTICIPANTS IS REFLECTED IN ONE THING:

THE PRICE


That's why markets bottom when news is bad and peak when news is good !


LES TENDANCES ONT TENDANCE A SE PERPETRER


The art of technical analysis is to try and identifytrend changes at an early stage and maintain aninvestment until the evidence shows or proves that the trend has reversed.

http://en.wikipedia.org/wiki/Market_trends


IN TECHNICAL ANALYSIS THE EVIDENCE IS PROVIDED BY :


Once a new trend emerges, always assume the prevailing trend is still in force until enough indicators have givenreversal signals


3 Types of Trends

Short-term Trend : 3 to 6 weeks

Intermediate trend : 6 weeks to 9 months

Long-term Trends (Primary Trend) : 9 months to 2 years

Secular Trends : 5 to 25 years


It's as well to remember that technical analysis is far from perfect even when correctly interpreted

LET'S MOVE ON TO SEE THE DIFFERENT KIND OF CHARTS…


4 MOST POPULAR TYPE OF CHARTS

•Bar charts

•Line chart

•Point and figure chart

•Candlestick charts


BAR CHART

opening price

closing price

HIGH

LOW


•THE ADVANTAGE OF BAR CHARTS IS THAT THEY VISUALY GIVE YOU A LOT OF INFORMATION : high, low, open, close

•THE MOST IMPORTANT PARTS OF THE BARCHART ARE THE OPENING AND CLOSING PRICES

CARACTERISTICS OF BAR CHARTS

•UNDERNEATH MOST CHARTS, YO WILL SEE OTHER BARS: THEY INDICATE THE VOLUME : COMPONENT WHICH IS INDEPENDENT OF PRICE


•The highs and lows are ignored in line charts

•Only the closing prices are considered. The line follows the closing prices.

•Easier to spot the prevailing trend and not concerned about the intra-day trading activities

•Line charts can be plotted for longer period of time since they need less space on the chart

CARACTERISTICS OF LINE CHARTS


POINT AND FIGURE CHART


As I mentioned above, P&F charts focus only on price action. Looking at this P&F chart, you can see that prices were initially contained between a support level at 114 and a resistance level at 121. When prices broke above the resistance level at 121 (the long column of Xs),that level became the new support level. This new support level eventually failed (the long column of Os), prices re-tested the support at 114, made a small rally, and then fell below the 114 support level.


POINT AND FIGURE CHARTS

Point & Figure ("P&F") charts differ from traditional pricecharts in that they completely disregard the passage of time and only display changes in prices. Rather than having price on the y-axis and time on the x-axis, P&F charts display price changeson both axes.


CANDLESTICK CHARTS


CARACTERISTICS OF CANDLESTICKS CHARTS

•Japanese origin

•Real body : when opening is higher than the close

•More emphasis on opening and closing prices than bar charts

•Disadvantage : they take a lot of space on the chart

•Useful tool for short-term traders

TAREK AMYUNI TECHNICAL ANALYSIS 36Démarrer Internet Explorer.lnk


The term "CHARTING" refers to the process of interpretingcharts, displaying price and/or volume

The term "TECHNICAL ANALYSIS" refers to a host of indicators and methods two of which are price and volume


LET’S MOVE ON…………

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TAREK AMYUNITECHNICAL ANALYSIS1 TECHNICAL ANALYSIS AND CHARTING