Key tricks: how to analyse charts and trade news.
If you look at any chart, you will see that at some point the price rests on the “invisible ceiling” (resistance level) and begins to decline back. But reaching the “invisible floor” (support level), it turns around and starts moving up again.
You will need a certain amount of experience and skills to correctly construct these levels on a chart. However, soon you will definitely learn to see exactly where it is better to draw them. The easiest way to do this is to click the Analytics button in the main menu of the Olymp Trade platform and go to the Technical Analysis tab. First you must draw a straight line along the 3 highest (peak) and 3 lowest points that the price reached (we do not take into account the “shadow” of candles).
The price chart constantly draws fancy shapes. If you learn to notice them, you will be able to predict the future trend in time. For example, there are trend continuation patterns (those that confirm that the current trend will continue for some time) and patterns of trend reversal. For example, “Flag” is one of the most popular trend continuation patterns. If it was formed during the uptrend, there is a high probability that the movement will continue in this direction after the price breaks through the upper border of the “Flag” (resistance) figure. Situation with a downtrend the will be the opposite.
Simple Moving Average (SMA) is one of the most popular and simple indicators. As a rule, traders begin to study the technical analysis from the indicator SMA. It smoothly follows the schedule and smoothing out random price oscillations. SMA clearly shows the direction of price movement. The strategy that we offer you is not built on one, but on two middle lines at once with different settings. Their intersection will allow opening confident and successful deals.
RSI (Relative Strength Index) is a visual oscillator that shows price oscillations within the values of 70 and 30. If the RSI line goes beyond these limits and becomes either lower than 30 or higher than 70, then assets is either heavily “overbought” (the price will soon begin to decline), or strongly “oversold” (the price will rise in the near future). However, a clear signal to start trading will be considered if the RSI starts to return to channel 70-30.