Professional Documents
Culture Documents
Presented by:
Juanis G. Barredo
VP-Sales & Customer Support
Chief Technical Analyst
COL Financial Group Inc.
OUTLINE
Trade in the
short to
medium
term?
WHAT IS TECHNICAL ANALYSIS?
O O
Open
C Open C
Low L Low L
Resistance Resistance
Support Support
Short term
From 3-6 months
Medium Term
6 - 9 months
Long Term
9+ months
Strategy:
Buy closer to
pullbacks to support
of an up trendline or a
breach of a down SELL
trendline
Hold as long as
your trendlines do not
break
Sell when your up BUY
trendline breaks
PART 3:
UNDERSTANDING CORRECTIONS &
AREA PATTERNS
MARKETS SELF-CORRECTING ACTION
Remember that it takes time to move a price a certain distance any
exaggeration must be paid for by an adjustment in time or price
50
(1) Consolidation in Time
45
(Magnitude)
40
35
Price
Time 25
(Duration)
DEMONSTRATING CORRECTIONS
Phi = 1.618
FIBONACCI RETRACEMENTS
Volume
USING AREA PATTERNS IN GRAPHS
MULTIPLE PATTERNS
Marcventures
(Ascending Triangle & Wedge)
Improved
Volume
PART 4:
SYSTEMS TRADING:
TECHNICAL INDICATORS
TECHNICAL INDICATORS
A technical indicator is a study of price data
derived from various statistical formula plotted
onto a graph
It serves three basic functions:
To Alert
To Confirm Consequential Price Movements
To Predict
MACD
Signal line
Zero line
MACD
Use:
JG Summit
A Buy signal is followed
when:
(1) MACD crosses
above Signal line &
(2) MACD is positive
(above 0-line showing a
positive trend)
RSI
Overbought (70-80%)
Oversold (30-20%)
RELATIVE STRENGTH INDEX
A Divergence is a lapse in strength shown in the RSI
compared with its Price
i.e in an uptrend, a higher-high in price compared with
a lower-high in RSI shows a lapse in bullish force
Belle Res. Jollibee Foods
Bearish
Divergence
Bullish
Divergence
PART 5:
ESTABLISHING THE TRADING PLAN
WORK ON YOUR TRADE ROUTINE
Creating a Trading Plan
Practice the discipline technically evaluating your
prospect know your upsides and downsides and
plan your action ahead of the trade
1) Trendline Projection
2) Range in a Price Channel
3) Height of its current Area Pattern
4) Distance to its next major Resistance / Support
ESTIMATE YOUR TARGETS
B D
C
ESTABLISH YOUR SELLING STOPS
Triggered Exits using Support Stops: Breakdown Conditions
1) Breakdown conditions
2) Trendline (or Moving Average) breaks
3) Trailing stops
Last reaction lows
For runners previous day lows or
8-day MA Up Trendline Break
HOW TO TRAIL STOPS
ESTIMATE YOUR RISK VS REWARD
Evaluate your prospects
A key component in being a successful trader is to determine
your risk versus reward level and use that optimum ratio to
guide your investment decisions.