Forex Training Summary and Quiz
- Forex Technical Analysis
Technical analysis examines historical rates in an attempt to identify future trends.
Using charts and graphs illustrating historical performance, technical analysts attempt to identify trend reversal points to take advantage of buy and sell opportunities.
Technical analysts are also known as chartists.
It is important to use chart refresh frequency intervals that match your trading style - the shorter the time frame you tend to hold trades open, the more frequently your charts must be updated.
Trend lines are used to identify support and resistance levels. A support trend line crosses the lowest price levels the market has allowed the rate to fall, while a resistance trend line crosses the highest price levels the rate has obtained before reversing.
Bar charts show four important pieces of information in one chart:
Highest rate for the period
Lowest rate for the period
Period opening price
Period closing price
Candlestick charts are similar to bar charts but also show the current market direction and the degree of rate movement.
Fibonacci Ratios placed on a price chart are used to help identify potential retracement levels.
Oscillators can help identify momentum for a given currency pair. Moving averages and trend directional identifiers are the most commonly-used oscillators.
Putting It All Together
- Using charts and graphs that track historical performance, _________ attempt to identify trend reversal points to take advantage of buy and sell opportunities.
market makers
regulators
spread betters
technical analysts
- Technical analysts are also known as _________.
chartists
fundamental traders
day traders
hedgers
- A _________ trend line crosses the lowest price levels the market has allowed the rate to fall.
straight
resistance
support
fluctuating
- The existence of a "double-top" in a price chart suggests _________.
a likely continuation of the current price trend
a descending price that is likely to reverse
an ascending price that is likely to reverse
a ranging market as traders try to determine future market direction
- Bollinger Bands® measure _________ for a currency pair.
the direction and strength of rate movements
the degree of volatility
the present value
the likelihood of a profitable trade
- When viewing Bollinger Bands on a price chart, the wider the _________, the greater the volatility.
exchange rate spread
price chart
ask price
price bands
- When viewing a candlestick chart, a hollow candlestick body _________.
shows overall market volatility
shows the opening price at the bottom of the body, while the top indicates the closing price.
has no significance
shows the closing price at the bottom of the market, while the top indicates the opening price.
- A _________ trend line that crosses the highest price levels the rate has obtained before reversing.
straight
resistance
support
fluctuating
- Fibonacci Ratios are used by some traders to _________.
hedge currency exposures
identify potential retracement levels
identify "double-tops" and "double-bottoms"
decipher candlestick patterns