Learning Trading, Day 2 (concepts)

Continuing with the learning in trading, taking into account my failures of the previous day on this day decided to read more and practice less, there are many concepts to define or understand. In addition, if your idea is to make a profit in trading and you are learning the best option is that the fictitious money you are using takes it as if it were your real capital, feeling the losses, alarming, establishing how much you want to earn and how much you are willing to lose on day. This will prepare you for when you really start operating.

The technical analysis includes the analysis at the graph and the mathematical / statistical analysis. For now will be focused on the analysis of graphics, which is a bit simpler.

In trading the most common to represent the operations are the linear chart, bar chart and the Japanese candlestick chart.

1 Lineal

2 Bars

3 Japanese Candle

This last graph is the most used because it is the most specific in terms of the representation of the operations, it indicates opening price, closing price, maximum price and minimum price according to a certain time.

Candle analysis and some combinations

Usually each candle and combinations mark a change in trend.

• Hammer candle
  

We see that the body is at the top and maintains a shadow of a size larger than the body, representing the figure of a hammer.

It is usually characterized in a downtrend or support zone.
Possible change of upward trend.

Shooting Star

It maintains a resistance in an uptrend.
Possible change of downtrend.

Bullish Envelope

Characterized in a downtrend, where the black candle is covered by the white candle.
Possible change in uptrend.

Bassist Envelope

Characterized in uptrend, where the white candle is covered by the black candle.
Possible change of downtrend.

These combinations are very important to take into account because they represent the fundamental basis of the graph, and it helps us determine possible trends.

Other important definitions to take into account are:

Support: Area below the market where the force of the demand exceeds the force of the
offer, which produces a stop of the bearish movement and later a rebound to the
price hike.

Resistance: Area above the market where the strength of the offer exceeds the strength of the
demand, which causes a stop of the upward movement and subsequently a fall of
prices.

A non-technical and concise definition would say that: Support is where the price is held or held to start a rise and the resistance meets similar characteristics, unlike the price after the resistance will drop.

It should also be taken into account that without support there is no resistance and vice versa.

According to J. Murphy.

“When a support or resistance is penetrated significantly, the roles are exchanged; the resistance becomes a support and the support becomes a resistance ”.

After a little theory and with more knowledge tried to perform a couple of operations, based on the figure Shoulder, Head, Shoulder Inverted (W) and its change in trend.

Started by defining my graph and adding a bullish forecast line.

Finally I closed the operation with a certain degree of satisfaction and thus sleep peacefully...

The two operations performed were profits.

Coming Soon:

• Reading of Graphs (Figures that change trend).
• Organizing and controlling operations.
• Defining Limits