This is with reference to the Live Technical Analysis Workshop, that I will be conducting in Barcelona just after the ITC.
Venue: The University of Barcelona
Date: Saturday November 1st 2008
Time: 08:30 AM to 04:30 PM
Cost: EURO 200.00 (including food and workshop material)
You can get the complete details here: http://www.fibforex123.com/Barcelona_workshop.htm
{For traders attending the FXstreet.com International Traders Conference (Barcelona October 29 to 31) there is a discount and the cost is 150 € only!}
With reference to an earlier post, I received some mails about the importance of indicators, and thought it would lead to a good discussion.
One of the topics covered in the workshop is “Understanding the indicators”.
(Topic.1 - Advantages and drawbacks of the common indicators, and identifying the proper situations in which to use them. (For example - use the RSI to determine breakout levels, rather than look at the overbought/oversold situations.)

Now the use of indicators in technical analysis is the most common way to analyze price action. But there are certain misconceptions about indicators which a trader must realize.
First and foremost, there are hundreds, if not thousands of indicators available and new ones are being discovered each day. Plus there is tons of information available, which often leaves a trader confused.
The second and the most important fact is that most indicators are lagging in nature. This is not surprising, since the indicators are derived from price.
So its price which moves first, which subsequently causes the indicator to react.
So, why should a trader expect the indicator to lead price?

While this does not diminish the importance of the indicators, one must understand the advantages and the drawbacks of the indicators.
A professional trader is one who identifies the use of a proper indicator for a particular situation, and then uses the characteristic of the indicator to get a better analysis.
And this is exactly, what we aim to cover in the workshop.
Sunil.

Hello James,
This is with reference to your comment on the post of “Harmonics on Gold”.
I thought, it would be better explained with some analysis and charts.
First of all, the strong moves recently in Gold certainly have been due to fundamental factors.
The financial situation globally had a strong effect on the Gold prices, but in answer to your question, the technicals still work.
Technical analysis indicates the situation as of now, in which all the current factors are priced in…the fundamentals, the rumors, the news…everything.
While this does not undermine the importance of the fundamental factors, one must remember one thing about technical analysis.
Whatever may be the reason for the price movement, the technical levels of support/resistance will always hold true

With regards to your second comment, about rumors of Gold reaching lows of 650-630…well…as I always say…we are traders and not astrologers.
We should follow price and our trades must be based on our tools in such a way, that we take profits from any price movement…up or down.

Let’s implement this procedure, so you get a better idea of what I am talking about.
We will analyze the Gold prices, based on a top-down approach.

Looking at the monthly chart, we can see that price is in a down retracement, after the huge up move.
We should obviously look for levels of support for this down move, and we use 2 basic and simple tools for that.
We plot the Fib retracements from the swing low to the swing high, and we can see that right now, price has found support on the 38.2 Fib retracement.
Secondly, if we plot support trend lines on all the higher lows, we can observe another support level at a trend line.
Let’s follow the “If-then” principle.
If this support holds, then we could see some up moves from here.
But if it does not, then the next lower target would be the lower trend line.

So, we have one part of our plan in place. If price breaks the support level, we have a fair estimate of the next down target…which is close to the rumored 650. -J

Now let’s go the weekly chart.

Currently the bearish trend seems to be in place, since price has been forming lower highs and lower lows.
Till the time price does not break the last high, we must remain biased towards the down trend, which supports our longer term views.

Now let’s have a look at the daily chart purely from a technical point of view.
Looking at the previously mentioned down trend of lower highs and lower lows, I want to demonstrate the power of the Fib ratios and the Harmonic patterns.
Situation.1 -

We had a bearish Gartley pattern which formed at the precise fib levels. The price target of this pattern was also fulfilled quite accurately.

Situation.2 -
Bullish Divergence.

The previous Gartley pattern completed with a bullish divergence, and we calculate the price targets of a divergence by Fib ratios again.
As we can see, price achieved the 161.8 fib projection very accurately and got rejected for further down moves.

Situation.3
Bullish 123 pattern.

As of now, price seems to have a found support on a 78.6 fib retracement and formed a bullish 123 pattern.
This would be an indication of a bullish move to the upside.
But a safe entry into a 123 pattern is when price breaks the high of ‘2’.

Hence we designate this current area as a No-trade zone.
Our trading plan should be -
Long entry on the break of the high of ‘2’.
Short entry on the break of the low of ‘1’

In all the 3 situations, did it really matter what moved the price?
The basic fact is that price does respect certain levels of support/resistance, and knowing this fact can give you an edge.
As traders, our job is to follow price and then manage the trade as per proper money management rules.

Sunil.

Some more tips about the workshop topics.
This is with reference to the Live Technical Analysis Workshop, that I will be conducting in Barcelona just after the ITC.
Venue: The University of Barcelona
Date: Saturday November 1st 2008
Time: 08:30 AM to 04:30 PM
Cost: EURO 200.00 (including food and workshop material)
You can get the complete details here: http://www.fibforex123.com/Barcelona_workshop.htm
{For traders attending the FXstreet.com International Traders Conference (Barcelona October 29 to 31) there is a discount and the cost is 150 € only!}
To give everyone a brief idea of the usefulness of the topics that will be covered, I am putting up a sneak preview of the topics.
Topic.2 The different Candlestick patterns.
Candlestick patterns are quite commonly used, but once identified; do you know the conditions for entering a trade, and getting the correct stop and exit levels?
(For example - a candle has to satisfy 3 conditions to qualify for a “Reversal Bar” which also define the entry and stop levels.)
Candlesticks - The use of candlestick charts is an extremely popular technique used in most markets as a forecasting tool.  The individual patterns and formations that arise represent the psychological character of the market. These reflect upon the emotions of the traders and indicate quite clearly, whether prices will rise, fall, or reverse their direction.
The candlestick charts reflect the following points, which make them very effective -
·    Buyers and sellers move price based on fear and greed.
·    All known information is reflected in the price.
·    The “fact” (price action) is more important than the “why” (news, earnings and other fundamental factors.)
Looking at the specific pattern of the “Reversal Bar”, this is a single bar pattern which is very effective.

A bar has to fulfill 3 conditions to qualify as a reversal bar, and once it does, there is a very high probability that prices would change trend at this bar.
Alternatively, one would usually find reversal bars at major turning points in the price movement, hence learning to identify these bars will give you an advantage.
In the workshop, you will learn about these 3 conditions and how to determine the precise levels of Entry, stop and targets for this change of trend.

Topic.1 - Advantages and drawbacks of the common indicators, and identifying the proper situations in which to use them. (For example - use the RSI to determine breakout levels, rather than look at the overbought/oversold situations.)
RSI - The advantage of the RSI over other oscillators such as the MACD, Slow Stochastic, is that it is smoother and is not as susceptible to distortion from unusually high or low prices. Plus it can be used to interpret price action in 4 different ways.
But like other oscillators, the basic drawback is that it loses its effectiveness in trending markets. This is because the RSI tends to remain in the extreme zones during a trend, giving false overbought/oversold signals.
Thus, one should take the strong points of the RSI and use them in a different way to overcome these drawbacks.
The peaks/valleys generated by the RSI give effective breakout levels.
In the workshop, you will learn a simple technique to correlate these levels with the price action, which will confirm a breakout from a range.

Some more tips later -J

Sunil.

Let’s have a look at a long term harmonic pattern forming on the monthly chart of the GBP/CAD.
This seems to be an interesting situation, since the harmonic pattern seems to have completed the 5 waves…at a confluence of other support levels.

As we can see in this chart, a bullish Gartley pattern has been completed, with pretty accurate fib levels.
Hence one would expect price to rally from this reversal level “D”

If we look at some more factors for confirmation, we can see that we also have a bullish divergence, and a support level which has formed at a fib projection of 127.2.

Hence this level becomes an important support zone and one would expect it to hold the price.

Even after such strong indications, we must still wait for price to give us a confirmation, before we take long trades.

Entry - For a harmonic pattern, an ideal entry is on the break of the “B” level, since this is an important barrier of resistance/support.
So, we would be taking trades, only if price closes above this level.
Stop - Ideally to be placed below the low of “D”
Targets - The minimum price objective for a harmonic pattern is usually the measured move of the wave “B-C” of the harmonic pattern.
If we plot this distance on the low of “D” we have an initial target zone, which also coincides with the 61.8 fib level of the move “C-D”.
If price surpasses this target, then further targets would be the 127.2 / 161.8 fib projection of this wave “C-D”

Again, we follow the “If-Then” principle, and look for long trades only if price satisfies our entry conditions.
And most important, we follow the trade with proper money management.
The advantage of using the fib ratios / harmonic patterns is that one can pre-define the anticipated target levels.
Hence one can manage the trade, by taking profits at the fib levels, and still participate in the trade if price moves further.

Sunil.

Hello everyone,

This is with reference to the Live Technical Analysis Workshop, that I will be conducting in Barcelona just after the ITC.

• Venue: The University of Barcelona
• Date: Saturday November 1st 2008
• Time: 08:30 AM to 04:30 PM
• Cost: EURO 200.00 (including food and workshop material)

You can get the complete details here: http://www.fibforex123.com/Barcelona_workshop.htm
{For traders attending the FXstreet.com International Traders Conference (Barcelona October 29 to 31) there is a discount and the cost is 150 € only!}

To give everyone a brief idea of the usefulness of the topics that will be covered, I am putting up a sneak preview of the topics.

Topic.1 - Advantages and drawbacks of the common indicators, and identifying the proper situations in which to use them. (For example - use the RSI to determine breakout levels, rather than look at the overbought/oversold situations.)

RSI - The advantage of the RSI over other oscillators such as the MACD, Slow Stochastic, is that it is smoother and is not as susceptible to distortion from unusually high or low prices. Plus it can be used to interpret price action in 4 different ways.

But like other oscillators, the basic drawback is that it loses its effectiveness in trending markets. This is because the RSI tends to remain in the extreme zones during a trend, giving false overbought/oversold signals.

Thus, one should take the strong points of the RSI and use them in a different way to overcome these drawbacks.

The peaks/valleys generated by the RSI give effective breakout levels.

In the workshop, you will learn a simple technique to correlate these levels with the price action, which will confirm a breakout from a range.

More tips later -:)

Sunil.

Hello everyone,
I want to inform all the readers that I will be conducting a Live Technical Analysis Workshop, in Barcelona just after the ITC.
It will be an intense workshop which will benefit the new and the experienced trader, and give a different perspective to analyze the markets.
I have learnt from personal experience, that price movement is never random. Price will always give clues, on where it’s going and one has to go beyond indicators to understand that.
Concentrating on price action, using the proper analytical tools & implementing the 3M’s - Money, Mind & Method, will give you that edge to succeed.
The topics covered in this workshop will lay the foundation of an effective trading plan
Venue: The University of Barcelona
Date: Saturday November 1st 2008
Time: 08:30 AM to 04:30 PM
Cost: EURO 200.00 (including food and workshop material)
Special discount for traders attending the FXstreet.com International Traders Conference (Barcelona October 29 to 31): 150 € only!
You can get the complete details here: http://www.fibforex123.com/Barcelona_workshop.htm
Sunil.