Markets to trade
Learn to trade
Join thousands of traders who choose a mobile-first broker for trading the markets.
Get $50,000 of virtual funds and prove your skills in real market conditions.
Technical analysis is the forecasting of price direction through studying past market data — primarily, price and volume — over time.
Technical analysis applies to any instrument you trade – whether it’s stocks, indices, futures or forex – as prices are influenced by the forces of supply and demand.
The objective of the analysis is to try and predict any future price movement, and can be done on any timeframe – from one minute through to one month and all timeframes in between.
Chart analysis can be an integral way of trading the markets, and following a trend could be a good gauge as to when to enter the market.
Take an uptrend for example – a healthy uptrend has a series of higher highs and higher lows, both of which have the potential to enter the market at.
Other indicators that you can use to determine the strength of a trend is the MACD, which is a momentum indicator that incorporates a moving average – the 9 EMA (Exponential Moving Average). The MACD offers both trend following and momentum.
The MACD fluctuates above and below the zero line as the moving averages converge, cross and diverge. You can look for signal line crossovers, centreline crossovers and divergences to generate signals.
If the MACD is above the 9 EMA, the momentum will be bullish and the MACD is below the 9 EMA, the momentum is bearish.
Another momentum oscillator that measures the speed and change of price movements is the RSI (Relative Strength Index).
By using the RSI, you can quickly identify overbought areas (when RSI goes above 70) and oversold areas (when RSI goes below 30) on the chart, and where the price is likely to reverse.
The RSI becomes incredibly useful when there’s divergence between it and the price action. Divergence occurs when pricing action and RSI is not in agreeance – once you spot this, you could potentially start preparing to enter the market, or exit if you already hold a position.
Risk Warning: Derivative products are leveraged products and can result in losses that exceed initial deposits. Please ensure you fully understand the risks and take care to manage your exposure and seek independent advice if necessary. It's important for you to consider relevant legal documents (Product Disclosure Statement and Financial Services Guide) before you decide whether or not to acquire any of our products.
TF Global Markets (Aust) Pty Ltd is the holder of Australian Financial Services Licence (AFSL) number 424700. Registered address: Level 12, 636 St. Kilda Road, Melbourne, VIC, Australia 3004. ABN: 69158361561.
This AFSL authorises us to provide our services to people or businesses that are located in Australia.
The information on this site is not directed at residents of the United States, Canada, Japan, France, Belgium or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
© 2018 This website is owned and operated by ThinkMarkets Group.