When is an overbought RSI reading bullish and when is it bearish? One classic interpretation of momentum indicators is that of overbought and oversold. Normally these are quite good signals when used within a consolidating market although mere oversold or overbought readings should not be used to buy or sell…

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Overbought and Oversold RSI Readings

Over the past decades, attempts have been made by traders and researchers aiming to find a reliable method to predict next action of the securities. As a result we have a variety of different fundamental and technical analysis methods and many theories today that really work. For the first pace…

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A Practical Guide to Technical Indicators: Part 1 Moving Averages

Some of the most popular trading strategies in forex markets involve the use of Japanese Candlestick charts. Given a specific pattern in candlestick formations, traders look to buy and sell currencies in anticipation of reversal or continuations in price. Yet testing the profitability of such concepts is easier said than…

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How Profitable Are Candlestick Strategies in Currency Trading?

Trader A has a win percentage of 75% on all trades while trader B has a win percentage of closer to 40% on all trades. Which trader is more profitable? Of course we can’t answer that as we don’t know how much each trader makes when they are right compared…

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The Importance of the Risk:Reward Ratio

Seven years ago when I was about to finish a long time study on how to understand the real meanings of economic concepts and in a shiny day when apparently everything did worked out well , I found myself a leading scientist of economics, someone who will be rich in…

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How to Trade Both Trend and Range Markets by Single Strategy?

“My work has gotten better due to simplifying my approach,” John J. Murphy, the veteran technical analyst, author and CNBC resident technical analyst, told a group of equities and futures traders attending the Technical Analysis Group (TAG) XVIII trading conference sponsored by Dow Jones Telerate in New Orleans.

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John Murphy’s Key To Success: Simplicity

William Delbert (W.D.) Gann is regarded as one of the pioneers of technical analysis and market behavior. He wrote several books on stock and commodity trading and developed the well-known “Gann angles” and “Gann Fans.” Gann was born on a farm near Lufkin, Texas, in 1878. His rise to trading…

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“Vibrating Prices” and the Trading Philosophies of W.D. Gann