Technical Analysis Tools

I'm going to be reviewing some ideas that cover different topics in this post.

This very good trader named Krausz brought three time frames to one display screen and called his system the Laws of Multiple Time Frames, these are the rules

1. Every time frame has its own structure
2. The higher the time frames overrule the lower time frames
3. Prices in the lower time frame structure tend to respect the energy points of the higher time frame structure
4. The energy points of support/resistance created by the higher time frame's vibration (prices) can be validated by the action of the lower time periods
5. The trend created by the next time period enables us to determine the tradeable trend
6. What appears to be chaos in one time period can be order in another time period

• The goal of this exercise is to point out an effective way of angling a trendline where it is not too tight and not too lose, so in the first frame see the bottom that occurred in February 2016 and how price does not track it very well. [79 Weeks of rising prices and 48.75% growth] the problem I find in this chart is that the trendline angle from February to April almost acts as but it does guide the velocity in my opinion
  

  
  
  
  
  
   But in the second frame that the that happened after Brexit on 6/27/2016 the angle and momentum embody most of the trend so for technical analysis it is helpful to point out that the trendline should capture many points of touch, where the candlesticks are within close range of the trendline.  These 59 weeks of traded ended in a violation of the trendline in the last two weeks.  This angle of trendline captures most of the trend and has many more points of touch.
  

  
  
  
  
  The third frame more accurately captures just the rise in 2017 that began after the election in late October Early November 2016.   Note that all three time frames and trendline angles begin at the origin of a very strong bullish move with a reversal pattern in this one there was a tall bodied hammer and in the second one there was a bullish engulfing candle in the third one there was a breakout from inside day/ bullish harami
  

  
  • Candlestick Formations and Patterns - I derive my terminology from Steve Nisson for what our traditional practices for Japanese candlestick charting
  
  
  The uptrend from May 23rd to June 8th was completely invalidated by the long red candlestick that was followed by another negative close.  These 12 days of progress were destroyed in one day.  And the key trigger to understanding how this happens is by the candlestick formation the engulfing nature of the price movement.  On the eighth trading session the buyers pulled out.    The point is that one negative trading session can "wipe out" 7-9 as seen in these two cases.  
  
  
  In second white shaded oval the Bears defeated the Bulls and that was on July 27 and on August 10.  The zone accounted for nine days of trading and the first long red candlestick encompass the entire range and 10 trading sessions.  Later on, nearly half the July advance was eliminated in Thursday's trading.  Though all three candlesticks formations were engulfing patterns, the last one on August 10th had some signature of "dark cloud cover".  
  

  
  
  
  Fibonacci
  Its has a similar appearance to the trendline angles I shared before,  this image shows where the 50% retracement is located at the 4930 level which is very close to a bullish breakout.  It is the origin of powerful rally that happened after December 26th of 2016
  

  
  
  
  
  
  Determining Trends from Moving Averages -  2 day time intervals over 5 years.  Lets zoom in on the sell off in early 2016 to now...
  The left end  of the chart is where the massive selling occurred in the early part of 2016 is followed by a doji formation, and then the rally paused at Brexit, and followed through at the yellow arrow which is considered to be called a golden cross.  These moving averages are simple moving averages: green one is the 50 period The blue one is the 225 period.
  

  
  
  
  
  
  In this frame you can see how price respected the 50 period moving average very well and created a bullish reversal pattern and stop at the all time  highs of 5995.75
  
  
  

•