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forex bhaye > 4th pillar: technical analysis: > Flashcards

4th pillar: technical analysis: Flashcards

1
Q

what is a support?

A

A support is a price level in a downtrend where the market stops, pauses or bounces to the upside

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2
Q

what is a resistance?

A

a resistance is a price level in a uptrend where the market stops/pauses/bounces to the downside

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3
Q

on a candlestick, where would you say the support zone is when it gets there?

A

supports and resistances are zones that start from the end of the candlestick to the end of the wick

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4
Q

how is a support created

A

the support is created in 2 parts:

The first part is the sellers in the market closing positions and taking their profit

The second part is new buyers coming in the market and opening new fresh positions

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5
Q

how is a resistance created?

A

The resistance is created in 2 parts:

The first part is the buyers in the market closing positions and taking their profit

The second part is new sellers coming in the market and opening fresh new positions

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6
Q

can the two parts of either a support or resistance happen at the same time?

A

yes by basing themselves from previous resistance and support zones

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7
Q

are supports and resistance usually random?

A

nah boy

there has to be a motivation for someone to close their trade or to open a new one

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8
Q

what is the mechanism behind the supports and resistance?

A

accumulation and distribution

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9
Q

what is an accumulation zone?

A

Accumulation zone is where traders/institutions are opening/adding positions to the market

They are adding a buy/sell

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10
Q

what is an distribution zone?

A

Distribution zone is where traders/institutions are closing fully/partially their positions in the market

They are removing a buy/sel

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11
Q

what makes longer accumulation or distribution zones?

A

the bigger the positions that are injected in the market or removed from the market

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12
Q

what has a bigger probability of being a market correction or trend reversal? why?

A

Large support/resistance

it contains both the Distribution and Accumulation

This is why they are longer, because they have both

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13
Q

what has a bigger probability of being a position adding lever for the continuation of a trend? why?

A

small support/resistance

there is only the Accumulation

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14
Q

what are consolidations

A

large levels of distribution and accumulation, just like the large support/resistance

They are two sides of the same coin

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15
Q

can large supports or resistance zones be only accumulation or distribution zones?

A

nah boy

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16
Q

can small supports or resistance zones be both accumulation or distribution zones?

A

nah boy

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17
Q

what are psychological levels?

A

the prices that are more important than others

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18
Q

what are psychological levels based on?

A

based on round numbers

price must finish by 3 zeros

the more zeros, the stronger the psychological level

19
Q

what does it mean when you have a higher high and higher low

A

uptrend

20
Q

what does it mean when you have a lower high and lower low

A

downtrend

21
Q

what does it mean when it is not a downtrend or uptrend

for ex: a Higher High and a Lower Low

A

consolidation

22
Q

what is a trendline?

A

Line that follows the current timeframe trend

23
Q

what is a counter-trendline?

A

Line that goes the opposite way of the current timeframe trend

24
Q

what is a key level trendline?

A

Line that doesn’t follow any trend, but acts as a Support/Resistance

Most of the time will slash through the candlesticks

25
Q

what is a channel?

A

Two parallel trendlines who are following the current timeframe trend

26
Q

what is a counter-trend channel?

A

Two parallel counter-trendlines who are going against the current timeframe trend

27
Q

what is part of the break-hook-go

A

the break

the hook

the go

28
Q

the break in the break-hook-go

A

When a trendline with/without another element of structure (support, resistance, psychological level, etc) is broken

29
Q

the hook in the break-hook-go

A

When the price comes back on the broken elements and re-touches it

30
Q

the go in the break-hook-go

A

When the market confirms us that the price is bouncing back on the element of structure

31
Q

what is a big bounce

A

Big heavy rejection on a confluence of trendlines and elements of structure (support, resistance, psychological level, etc).

32
Q

what differentiates the break-hood-go from the big bounce?

A

The BHG will allow you to have more confirmations to enter your trade, but you will miss out on a few pips since you are entering a bit later than a BB

The BB will allow you to have a perfect entry and maximize your pips, however you do not have any confirmation so you should be more careful and double check your analysis

33
Q

what are chart patterns?

A

a specific price action that has been formed in specific shape and been repeated multiple times in the market over the years

34
Q

what are chart patterns used for

A
  1. Enter a trade (with fundamental and other confirmations)
  2. Add positions to your trade
  3. Second chance to enter the trade if you missed an opportunity earlier
35
Q

what are the 5 rules to determine wether we are looking at institutional trends?

A
  1. The trend (channel) must be represented in H4 or D1
  2. The angle of the trend must be around 45 degrees, it must be sustainable
  3. The trend must be a clear uptrend or downtrend, HH HL or LH LL
  4. You must prove that the heartline exists
  5. You must be able to count the elliott waves
36
Q

what are impulsion waves

A

part of the Elliot waves

they are the points on a certain trend that push to counter it

37
Q

what are correction waves

A

part of the Elliot waves

they are the points on a certain trend that promote it

38
Q

in an uptrend, what are the rules concerning the Elliot waves

A
  1. Wave #2 cannot be higher than the beginning of wave #1
  2. Wave #3 cannot be the smallest of the impulsion waves
  3. Wave #4 cannot come lower than the end of wave #1
39
Q

What happens if the institutional trend doesn’t follow every rule perfectly?

A

It becomes a structured channel (the in-between the channel and institutional trend)

The 4 zones will not be necessary respected

the 85% heartline rule will not be applied

there won’t be any Elliott waves

However the market is still very structured and more previsible than a regular channel

40
Q

what are the two types of movements in the market?

A

impulsive leg

corrective leg

41
Q

impulsive leg

A

Will create a Higher High or a Lower Low (pushing the price)

42
Q

corrective leg

A

Will NOT create a Higher High or a Lower Low (correcting the price)

43
Q

how do you use the fibonacci tool correctly?

A

we need to find the last impulsive leg of the movement

we measure it and will give us all the proportions to setup our trade properly

forex bhaye (8 decks)

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