So what tools does the technical analyst use? The primary tool is a chart of price movement, of which there are varying types. The movement of a security's price is referred to as its price action. Price action is always the primary indicator, with volume a secondary indicator. In the analysis that is relevant to day trading, we use line charts, which display volume at the bottom of the chart. Bar charts are less useful for real-time analysis. And even less useful in intraday charts are candlesticks.

Bar Charting

Bar charts, point and figure, and candlesticks can all come in handy. Bar charts are somewhat different from linecharts. Whereas a oneminute line chart (which I call a one-minute tick chart) will place a point on the chart at the price at which the security last traded within that minute, you will have no knowledge of how the security fluctuated in price during that one-minute period. The bar chart provides that information. The top of the bar represents the high price for that period, the bottom the low price, and the dash on the right-hand side of the bar represents the close. Some charts also show a dash on the left-hand side of the bar to indicate the opening price during that period. These features of the bar chart are shown in the below figure.

When assessing general market conditions, I like to see two, and preferably three, different indicators all agree before I make my decision on where the market is heading.

We do not use indicators of overall market direction to control exactly how we behave. They merely provide a bias for our actions, pointing us toward looking for long opportunities in rising markets and shorting in falling markets. That is not to say that we will not sometimes trade against the prevailing market trend if there is an exceptionally strong movement happening in one security. It just means that we will be more careful about trading against the overall trend.

Candlesticks

Each candlestick is made up of a real body and two shadows, as shown in the below figure. The real difference between this and the regular bar on a bar chart is the information provided by the real body. In the fuigure, the upper end of the real body is marked with the letter A, and the bottom of the real body is marked with the letter B. These represent the open and closing prices for the period the candlestick spans.

If the open is higher than the close for that period, the real body will be black, indicating that prices declined in the course of the day. If the open is lower than the close for that period, the real body will be white, indicating that prices closed higher than the level at which they opened. As we shall see later, it is the combinations of candlesticks that form the useful patterns, not analysis of any single candlestick.

Point-and-figure Charting

The point-and-figure method is a little more difficult to understand, at least initially. Point and figure is a really good method when looking for stocks that may break out, either to the upside or the downside. I have heard of people using intraday point and figure, but I have not done so. Point-and-figure charts will be discussed when we are assessing overall market direction, to give us a bias for the direction in which we will look to trade securities. Again, just as with candlesticks, the point-and-figure information only gives us a bias. Should the price action for a given day contradict the point-and-figure information, we go with that instead. Day traders should always use the day's price action as the primary driver for trading decisions. Should the day's price action disagree with the point-and-figure indicator, the day's price action takes precedence. The basic point-and-figure chart is shown in the below figure.

This is an odd display, no question. It represents price movement only, disregarding both the time element and volume. The vertical axis represents price, and the horizontal axis has no assignment. The concept behind the point-and-figure method is that a column of X's represents a rising trend, and a column of 0's a falling trend. As such, the point-and-figure chart highlights trend reversals and price breakouts very well, in fact, far better than a line or bar chart.

In point-and-figure charting the box size is of paramount importance. In the figure, the box size is one dollar, and we can see the first column is one of X's, indicating that the price moved from 110 to 113 without any fallback. This could have happened over minutes, weeks, or months, because time does not matter in point-and-figure charting. The next feature to note is what degree of retrenchment will cause the chart to reverse into a column of 0's. That is selected, but for argument's sake, let us make it 3, which means a reversal of three box sizes is needed to shift the chart display to the next column on the right.

To make this clearer, let's us look at some data that could be used to generate the display. These figures represent the closing price taken at regular intervals. They could be at the end of the day, a week, every hour, or even every 15 minutes. The rate at which data is collected is the only area where time has an effect on the point-and-figure chart. The first set of data is as follows: 110, 113, 109, 112, 109, 113 Here, a three-point reversal happens after each consecutive data point, which causes a new column to be created. The same display would be generated with the following data. 110, 111, 112, 113, 110, 109, 112, 112, 111, 109, 112, 113 This shows the runup from 110 to 113, which is immediately followed by a three-point reversal to 110, then a further decline to 109. The reversal happens again at 112 and holds there as the price falls to 111. The reversal does not happen until the fall to 109. The final reversal happens with the move to 112, followed by 113.

I have not come across a good source for intraday point and figure, although I would dearly like to, so I cannot use it for timing day trades. However, point-and-figure charting becomes important when it comes to assessing the overall market and sector health of securities.

This type of oscillator revolves around using two moving averages and plotting the divergence between them. To understand these oscillators, a small detour to look at moving averages is appropriate.

A moving average is calculated by averaging the closing price over the previous x periods. For example, a simple moving average of closing price over eight days is the sum of the closing price of those last eight days divided by eight. So, to get one point on an eight-day moving average, you need eight data points. A simple moving average is shown in the below figure.

A single moving average is of limited use. All it comprises is a lagging average of what has gone on before. Lagging means the price action itself will have changed direction before the moving average. In some instances, a moving average performs a similar function to a trendline on a chart in that it will act as a line of support in upward moves and a line of resistance in downward moves. As such, the crossing of a single moving average can signal a change in trend. There is much more that can be done with moving averages, though.

When you combine two moving averages, you get clearer signals. Essentially, you pick a shortterm moving average and a long-term moving average and take your trading signals from when they cross each other. The two most significant patterns formed by the crossing of two moving averages are the golden cross and the dead cross.

Scalping trading technique accounts some secondary and somewhat lower probability patterns. These trading patterns must be paired with other analysis tools, such as momentum from the market maker screen. In this case they may be traded successfully.

The „FLASHBACK“ is another morning trade pattern based on a quick reversal. Of course this reversal is done in the direction of a stock's price. In this particular case it quickly fakes one direction, then reverses back the other way to break the current high or low of the day. Just look for the market index to be moving in the same direction the trade is taken for it to be worthwhile. The below picture shows how it sets up for a buy trade:

This pattern could be considered if the overall market index begins moving up significantly and there is enough distance to the high from the breakout to make a valuable profit. In order for the trade to generate money there should be atteast 1 + points from the breakout point to the high of the day. These trades can be good on a day when the market runs down in the morning and then makes a smooth, rounding bottom that subsequently swings back up.

These examples are often strong trade setups that may be taken for a reasonable percentage of success. The most important thing here is to get in early on a strong move that will allow quick and decent scalping profit.

When you choose to participate in FOREX trading you should pick the three most important currency pairs and you should wait to pick any of the eight widow time trade. The time zone will automatically be adjusted to your time zone. The FOREX trading pairs are actually one of the great pairs someone would be able to pick and it’s quite easy way of gaining money though it starts from an investment of at least 100 Euros.

If you are a beginner on the FOREX trade market than you probably would need the help of Gann trading software and if you decided to use the Gann trading software it will provide you with special techniques that are able to help you. The Gann’s Master Time Factor software is Bill McLaren's favorite software pack. Bill McLaren is the most important person using Gann worldwide that has appeared on CNBC. McLaren has contributed to the design of this soft. Everything that one must learn so he can be able to use the techniques is shown in the program.

There are important courses that will learn the students whether the cycle is on a high or on a low more in advance. It uses the Gann trader and it makes you understand that every market has a unique cycle of highs and lows. Anyway all the movements of a market have some basic concepts in their own structure.

This is followed by the description of software that looks appealing in the eyes of the one that actually uses the astrology trading and the Gann’s astrolo­gical method in order to obtain great forecasting of the movements of the market. However not only that the traders are used on the market but actually the Gann forecasting is also used in the sites that offer free or paid predictions in order to entertain the public and obtain the forecasting that their clients are looking for.

Anyway the Gann forecasting comes with an appealing forecast and it’s based on the idea that the merchant from the sixteenth century said that the future actions will be a repetition of the past actions which however is true because of the rationally thinking that one action leads to another. There is an interesting link it could be made of the astrology trading and economical technical analysis tools that are helping investors to know how and where to place their investments.

The Gann square of nine is an instrument composed by a spiral with numbers which tend to grow up by any Gann square. The numbers on the Gann square are put in increasing order and they go from left to right in a spiral movement opposite to the clock movement.

The Gann square of 9 calculator is an instrument predicting with big accuracy the levels and the resistance levels of the prices in time like days, weeks, and month or even a year. This procedure is based on two analyses that Gann has made for getting accurate results forecasting the evolution of prices and of the market and the indicators of the prices. There are some legends saying that this knowledge was obtain in his visit to Egypt where he obtained the knowledge of using the square properties in order to find what was important for him as a merchant. The square of nine uses squares that are divided by units. In the center of the spiral there is the number one. The counting continues to the left adding number two and goes up with three then turns right with number four and goes on with this rule of the spiral.

The topic of this article is the Gann square of nine. So it will probably be interesting to find out how this square of 9 was invented by Gann. Perhaps you did not know that the Gann squares are composed by the structure of the Egyptian pyramids.

It is now an instrument that helps conduct a technical analysis using the Gann square of nine charts, which provides the trader with an important hints to be used during market analysis. This is a great support in the process of trading the merchandise which helps the merchants take the best decisions in order not to lose their original investment or the profit that was reinvested.

The history of Gann Square of 9 going back to ancient pyramids might be a legend or not. No matter if true or not, these instrument stll helps forecasting the resistance levels and also forecasting the resistance support. Think of what the ones who know how to use these techniques should make the difference between the square that analyses the price which predicts the evolution of the price support and the square that analyses the time which predicts the evolution of the market reversals or predicts the days, or the time when the market is reactionary and it is not a wise decision to come up with massive trading.

What is Gann fan? Gann fan is a market prediction and analysis tool designed by the person with same name who believed that he can use mathematical and geometry to predict the action and evolution of the prices. For this tool to be precise you have to draw a table so that the time and the price have same dimensions and you can measure precisely the evolution of the prices everywhere in the table. The ideal situation is when prices increase or decrease at a forty-five degree. Gann fan is made by a structure of nine angles that are used to measure the price action.

There is a Gann fan technical analysis tool that helps people to analyze how the market is at the moment and some values indicates how a market can be good or bad depending on the values that are given. The Gann fans are the tools that are used on a price analysis. How to use Gann fan is pretty simple because all you have to do is to use the software that includes Gann fan tool among other technical analysis instruments and follow simple instructions.

So as you can see it is not so difficult to use this instruments and it even can be useful because it indicates you the market tendencies. The Gann Fan chart is actually composed from many Gann fan lines that can have their properties changed using the option from the software. Even though the Gann technical analysis was invented long time ago it is still used to forecast the market evolution using price charts. When analyzing a Gann chart it is advisable to set your analysis tool at a range of twenty-five percent, fifty-five percent or seventy-five percent of the target prices so the level results are accurate.

To sum up, it should be said that this tool is not modern but it is an important market analyzing tool? that has proved its efficiency during a long time and it is still used nowadays by those who analyze the evolution of the market or trading. It is simple and fast to use and it is not difficult to use or understand by anyone whether you have or not economic background. If you have a business and want to take out the best of your actions than all you have to do is download a Gann fan tool and read just a few pages about how to use this instrument.

The flag formation is characterized by narrow oscillations contained within two bands that form a channel. Typically, the channel is either in the direction of the trend or against it. The pattern has a higher degree of predictive capability if the channel is in the opposite direction to the main trend. These two options are illustrated in the below figures.

The pattern is complete upon the break of the upper line that marks the boundary of the channel. The number of oscillations in the flag is not important. That will vary depending on the time horizon of the chart you are using. I traded a continuation pattern recently that looked quite different on a one-minute chart from how it appeared on a five-minute chart, both of which are shown in the below figures.

In this instance, the stock had fallen in premarket activity on weak bad news and staged a strong recovery in the Phase 1 market period. As no trends have been formed this early in the market, any trades that I enter are usually either the result of the first move in the opposite direction of the premarket gap, or of continuation patterns if I miss the first move. In this case, I missed the first move against the gap and took a long position as close to the entry point as I could get. In this situation the trade worked out well, and I exited the position when the upward move positioned the flag at halfway in the trend. Typically, a consolidation flag will appear halfway within a move, which has led to the expression: „Technical flags fly at half mast.“ What actually happened in this case was that the stock moved appreciably higher than the point at which I exited. On a technical basis, however, holding the position beyond what was predicted by the continuation pattern would have moved me into the hope and away from the reality column. Over time, that most likely will lead to diminished returns.

The Andrew’s pitchfork was invented by the person named Alan Andrew. The pitchfork can be used when you want to find the best opportunities for your business, investments, and if you want to examine the possibilities in current market. For a longer time it might be suitable for identifying how the gauges affect the overall cycles and how they interact to the general activity of the market. The aim of this article is to explain how this instrument actually works and how someone can use it in their trading market in order to find the best opportunities for their business and the best time to make an investment or to retreat some funds.

Andrew's Pitchfork technical indicator appears in numerous sites and software variants and it is actually an instrument compound by three lines in which the middle one is called the support line. The lines are also called resistance lines. The indicator appears on the charts as a fork, so that’s where the name of the Andrew pitchfork comes from. To use the pitchfork you must at first identify weather a high and a low value that is called Andrew’s pitchfork indicator. This high value means that that you identify the pivot. After identifying the pivot you should find the peak of the graphic. At the time when the values are identified the operation can proceed.

Even though it is at first point applied in coming future and the equities that you find on the forums and that are seldomely used in what is called the currency markets, you should be aware of the fact that Andrew's pitchfork is able to provide to the currency business man with opportunities that are going to bring profit to him in longer or shorter term, and capitalizing on particularly longer trade swings.

This is important to apply Andrew's pitchfork as accurate as possible. It is often used combined with strict deal management and with other technical analysis instruments. The trader should be able to distinguish between awesome set ups and in the mean time weeding out what the sometimes choppier dealing transaction which goes in the FOREX trade market which might rise his or rise her losses. Anyway if every of the listed criteria above could be applied, then the trade would be capable to ride on its way to the profitable markets compared with its shorter deadline peers.