The Money Flow Index indicator (MFI) is an oscillator that uses price and volume to measure momentum. It’s also known as a volume-weighted RSI and can be used in a similar way.
In this article I will be testing a strategy that I found on a popular trading website. Read more »
The focus of this article is a new study by Caporale and Plastun. They suggest that there’s an edge to be had in forex markets by trading gaps. However, they could not find an edge in other assets.
Following are some of the findings from the research paper and then some concerns we have about their results: Read more »
Japanese candlestick patterns are useful because they allow traders to quickly visualise price action in the market. There are many different patterns and many different opinions on their effectiveness.
In this article we will look at a trading system that attempts to dynamically select the best performing candlestick pattern from the previous six months and trade that pattern for the next month. Amibroker formula will also be provided. Read more »
Debate has raged for years as to whether or not technical analysis is actually a useful tool in helping to generate long run profits in the markets.
For some, technical analysis is no more than hocus pocus. An approach that is based on faith rather than legitimate science. For others, technical analysis is the foundation of profitable trading and those that dismiss technical analysis are usually not ‘real’ traders. Read more »
Several months ago I was thinking about candlestick charts and whether or not these classic patterns had any predictive ability for trading. I had a look around but all I could find were vague speculations and cliches. I couldn’t find any solid evidence of whether they actually worked or not.
So… I thought I would casually test out a few candlestick price patterns and see if any of them actually worked.
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With the fear and uncertainty of a possible Brexit, GBP/USD has been one of the worst performing currency pairs this year, falling as low as 1.38 in late February.
However, recent weeks has seen the currency stage a comeback, taking the market back to the important 1.4600 level as traders bet the pessimism was overdone. Read more »
In a recent article we looked at the shooting star candlestick pattern and we found that it wasn’t a particularly successful signal for spotting reversals. In this article we will look at another bearish reversal signal in the form of the gravestone doji candlestick pattern. Read more »
Technical analysis refers to the study of past price action to predict future market moves. It makes use of charts, trading volume, and other statistical or mathematical indicators to gauge how the market might behave, based on the concept that the fundamentals of an asset are reflected in its historical price action. Read more »
Last Friday the S&P 500 formed a shooting star candlestick pattern on the daily chart. This is a Japanese candlestick formation that is normally a bearish reversal signal. Sure enough, the S&P 500 moved lower the next day, dropping around 15 points. We saw this happen last September too. But how often does this bearish pattern really play out? Read more »
In this article I look at some of my favourite intraday trading patterns including naked price action patterns and Japanese Candlestick patterns. Read more »