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‘Charts really are the ‘footprint of money’ ― Fred McAllen, Charting and Technical Analysis
Interpreting price movement isn’t a new phenomenon. The centuries spent deciphering charts has led us to where we are today: a financial world essentially split between two core methods of analysis: technical analysis and fundamental analysis.
Although it’s common to employ both methods to research markets, technical analysis occupies a prominent spot in retail foreign exchange (Forex), with professional organisations, such as the Nippon Technical Analyst Association (NTAA), the Society of Technical Analysts (STA), the CMT Association – Chartered Market Technician (CMT) and the CFTe (Certified Financial Technician) offering prestigious designations.
The history of charting is long and colourful. As far back as the early 1600s, lottery prices were plotted in England, with the discipline later appearing in Osaka, Japan in the late 1700s. Charles Henry Dow, the founder of the Wall Street Journal, then made an entrance in the late 19th century. Dow is considered by many to be the father of modern technical analysis, the first to design an index gauging the overall price movement of US equities. Interestingly, however, Dow never planned for his statements and observations to become what is known today as the Dow Theory. This was later moulded by William Peter Hamilton and Robert Rhea. One of the key theorems of Dow Theory is prices trend, formed by way of a primary trend, a secondary trend and a minor trend.
The configuration of chart patterns in financial markets remains a debated subject, with some academics believing patterns do not exist. This, of course, is an in-depth topic that goes beyond the scope of this article.
Those who believe patterns do occur tend to lean on the notion that traders and investors exhibit habitual behaviour that, if observed in large enough numbers, establish identifiable formations. Classic head and shoulder’s top and bottom formations, for example, are accepted reversal trading signals and can be traded on all timeframes.
Given the broad range of chart patterns, identifying configurations can become a laborious undertaking, particularly if several trading instruments are analysed on different time periods.
To make life a little easier, irrespective of trading experience, Autochartist can help by taking on some of the leg work.
Choosing the Right Online Autochartist Forex Broker
Selecting the right online broker is challenging. While ensuring a brokerage offers a selection of account types (Standard, Raw and Spread Betting), trading platforms, technical indicators (trading tools), as well as varied trading products (Forex [currency pairs], CFDs, Cryptocurrencies, Commodities, ETFs), free access to a demo account and knowledgeable customer support is important, another feature many active traders (both on demo and live accounts) desire is access to Autochartist.
The CEO of Autochartist, Ilan Azbel:
‘Our mission is to simplify the trading process and reduce trading risk by providing unbiased, independent decision-support tools. We believe we play an essential role in empowering traders with informed and well-thought out analysis. This in turn allows everyone to be responsible and take control of their own financial destiny. With so much conflict of interest in financial markets in general, we are extremely proud to be one of a handful of research providers that are fully aligned with traders’ objectives’.
FP Markets not only stands as a heavyweight in the foreign exchange domain, and remains a go-to provider for retail investor accounts, we’re also a keen supporter and provider of Autochartist on MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Metaquotes also support the Autochartist plugin on MT4/MT5 trading platforms as a custom indicator (Expert Advisor [EA]), delivering market analysis directly to the chart’s interface.
- The Autochartist technical analysis tool provides an eye-popping number of real-time actionable trading opportunities each month via email and mobile apps from within your FP Markets client portal. Serving not only as a time-management tool and a way of complementing trading strategies for experienced traders, the software also provides novice traders the ability to better interpret chart patterns and make more informed trading decisions.
- Autochartist monitors multiple markets at the same time from your online trading account, searching for trade opportunities. Autochartist also allows market trends and key levels to be identified, with entry-level access to complex chart patterns displayed. Chart patterns, such as Triangles, Wedges, Tops and Bottoms are recognised while an automatically illustrated take-profit range on completed patterns indicates an expected price level through pattern recognition.
- In addition to the above, the software also organises instances when excessive candles have closed in the same direction, along with Fibonacci patterns from straight forward extensions, retracements and ABCD patterns, to more sophisticated setups like Gartley and Butterfly formations. Furthermore, Autochartist recognises horizontal support or resistance levels.
- Another feature worth underlining is the Volatility analysis feature, in addition to Performance Statistics. The Volatility Analysis tool offers a wide-ranging interpretation of the expected price range across all instruments. The performance metrics, on the other hand, measures how many complete chart patterns hit their forecast level within one pattern length after breakout.
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Disclaimer: The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be high risk; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.
Autochartist™ is a respected third-party supplier of FP Markets. Traders should note that FP Markets offers the software to its customers as a bonus feature and does not warrant the completeness, accuracy or timeliness of the information supplied. FP Markets does not have any connection with, or vouch for the accuracy of the trading styles described, or predict or guarantee any outcome as a result of their use.
Responsibility for the claims made in the materials are made by Autochartist™ and Autochartist™ alone. All predictions are not in any way provided by FP Markets. Autochartist™ , its affiliates and any third party contributor will not be liable for any claim, damages or other liability arising from, out of, or in connection with the use of the Charts. The Charts run on pricing data provided to a third-party charting administrator, and you accept that the price data displayed in the Charts may be delayed and that Autochartist™ does not guarantee the accuracy or completeness of the data.
The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The strategies mentioned herein may not be suitable for all investors. The opinions and recommendations herein are by Autochartist™ and do not take into account individual client’s circumstances, objectives or needs, and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. Users of this service should take independent decisions regarding any securities or financial instruments mentioned herein.