Hello, and welcome back. So this is module thing. I'm very glad that you have been patient enough to make it this fall. And I believe that this is the order of course, we'll be getting into the technical bits by looking at technical analysis, and then more specifically, indicators and some of the trading systems like in Morocco, Bill Williams, etc. And this module actually contains quite a bit of information, so I've decided to split it into three parts, so this would be bought one of three. I'm going to start this module off by looking at moving averages.

Now, moving averages is probably the best known technical indicator and the basic idea behind a moving average is just to help identify the trend by smoothing price action over a predefined number of periods and this helps to eliminate some of the noise And the random fluctuations that occur in markets and other applications of the moving average include using it as dynamic support and resistance or as the basis for other technical indicator indicators like for instance the MACD moving average convergence divergence. The two most popular moving average types include this simple moving average is in a for short, which is the average price of a security calculated over a predefined number of periods and in the in the other exponential moving average or Ma, which gives a greater weight to the more recent process. So you're welcome to go and look up the formulation of how those moving different movement moving averages are calculated.

But I just like to make you aware of those two major thoughts. Now people will usually asked me or would like to know which are the best and move Average periods to use. Now, I've decided to present to you two moving averages that I feel are most useful to us. And I'll also show you some examples on our Euro USD chart. And I'm just using the Euro USD for continuity. And as we have used before, I think it would be nice for you to maybe just see some of these averages being plotted on the chart itself.

So the first one is the nine estimated as a simple moving average. And I believe that's useful for small timeframe, nice support and resistance. So especially for those who prefer a trading style of scalping. So that would be your first shorter term trade. So that would be your nine isn't it? Then I use the 20 ECA and 21 in conjunction with each other.

So basically I use them to give it and I'm Use it as a trend indicator. In other words, because the 21 EMA is actually a bit faster than the 20 Ma, and you're actually getting a nice indicator to actually point out your your current trend. And so that's actually quite nice. I'll show that to you now. Then they are the 26 is Ma, which also works pretty well in conjunction with the 21 ma for pointing out train so that would be your primary primary training indicator. And then you can use the 20 isn't n 21 ma just to give you early warning of a trend changes.

I also use the 42 ma which is reliable medium term support and resistance and moving average. So price actually found respect that EMI pretty much, very much so that is another When I am using, I can also use a 50 ma and when used in conjunction with the 200, ma or Ma, and it's actually used to identify with schools and the golden cross all the death cross, just basically identifying when the trends are changing. And if you getting the 50 isn't a moving through the 20 ma that's called the Golden cross and we can expect some upward upward price movement of price continuation, retrained and other side of that if the 15th of may moves through to 200 Ma Ma from the top to the bottom, it's called the death cross and we can usually expect some price continuation to the downside to continue. Then we have the 100 ma which is also very popular and useful, moving average to use as long term support and resistance In a very, very popular 200 ma Some people prefer the 200 Ma, which is the long term trend indicator.

In other words, if we find price above it, we would say that we are in a bull trend with price below it would say that we are in a bearish trend. I also sometimes look at the 250 ma which, which work well for long term support and resistance as well. So obviously I'd never use all of these in the chart together. And that would just cause the job to be full of lines. But I do use the 2021 ma along with the 26 EMA and maybe 200 is the MA or Ma. So let's go to the chart and look at some of us.

Okay, so you're here use the chart. So first off You can see I have some support and resistance lines plot here. And as well as some diagonal lines, so I'm just gonna hide that for now. So they're joined to side or terrain tools, and I'm going to apply them moving averages are going to indicate this moving average. Again, as you can see the our moving average exponential, that is your Ma and your SME is just the standard moving average. So let's start with the standard moving average of nine.

So there we go. As you can see that little line plot every day that is your nine isn't a and the fingers living averages are that they are lagging price slightly and the shorter the period, the more closely they will be falling for us. If a lie if you have if you add a moving average and you'd like them to maybe just change the style making a bit more visible if we change the thickness of life. Order Kala if you like. So that would be your nine moving average is Ma. Now I'm going to add another, isn't it?

Moving Average, my average moving average. Yeah. And now I'm going to add. So you can see I'm joining the period by just selecting the row. Here, I can over here going to inputs, changing the length to 20 periods. There we go.

I'm also going to change the style to make it let's make it light blue, I guess well, there we go. That would be our 20. It's an A and I'm going to add our Ma. So that would be a moving average exponential and then using a 21 in a Okay, so I'm going to remove that nine simple moving average now and I'd like to press plays like I said with the 26 simple moving average simple moving average. Yes, there you go. So, that is my personal near term moving average setup.

So, the light blue one is the AMA align the light blue blue one is a simple moving average and the dog the blue one is the exponential moving average. So what you'd expect to see around beans and so on is that your, your your dog relaunches, you eat I would move a little bit faster than your lighter blue one, which is the simple moving average. So I sometimes use this just to indicate to me a trend so as you can see, it's moving upwards is actually forcing the moving in front of the above the MA around here so actually giving you an early signal that the trend is changing upwards. And as you can see, with enjoy using it in conjunction with the red line, which is the 26th in a simple moving average, you actually get a nice indication of trend. So, general rule of thumb if those two lines are below the 26 Ma, you are in a downtrend, if they are above the 26 A CMA you are an uptrend.

And in fact, have said I just used the CMA in conjunction with the CMA with me as an early warning signal to tell me that a trend is changing. So you can see there actually process so it tells me we can maybe expect some drink changing, but as you can see, price action just continues onwards. So not that accurate every time. But still, as you can see above the red line, meaning we are still in the uptrend, it actually moves below the the 26 is Ma, but the blue line still above it, so trends still up. And here we actually start to see that both of them leave the 26 ma and price actually do start to change, although it does move back up and we are actually currently arranging so it's actually getting all messy around here and that's time to detach just stay out of the market because we are just busy arranging.

So that's just looking at the moving averages and on their own. I'm just gonna change the 21 ma now to the 42 in either I mentioned to you and I'm going to also change that to any Some simple moving average 250 and the other one to 100. So, we actually just moving to towards more longer term moving averages at this stage. So, the red one immediately you can see how it acts as overweight resistance. Now that is because 100 is an is actually a very popular moving average that most traders do actually use. And that's why it will act as some support and resistance so you can see excess resistance and then of yours support.

And you can actually go back and you'd probably see the same thing with VA as well. Okay, and then the 50 moving average, that's the light blue one at this point, and probably not have too much use at this stage. Like I said, we're not being used that actually more in conjunction with Your with your 200 ma and 42 emails the top line in my opinion something that actually price due at the edges you can see the it's used as a support, user support support actually actually market consolidates around it uses support. So something I'd really like to see this again. So I'm going to change the 100 ma now to a 200 M and I like to show you an example of the what we call the death cross. So that is when you're the 50 moving average is the light blue line in this instance moves and below the 200 ma or Ma and like you can see over here PDF crosses and price actually continues and stays in this downtrend for a long time actually up until around yes that is your Cross and looking at an example of the Golden cross, we'd actually have to find up with me first we can see so you're the is that's the light blue line crossing over the 200 moving average nice long bullish uptrend.

And then also maybe I'd like to show you two 250 Ma, which in my opinion is of the well respected. Average and getting can be used for support and resistance. And as you can see, you actually find some support in it. small correction in via the move, continuing downwards as he as well you can see access some support. So yeah, that's just the moving averages. And as mentioned my personal setup, the 20 is made 21 Ma, in conjunction with 26 is Ma and are probably both So, Tom have 100 isn't a 200 is an A on the chart as well that is it for moving popular moving averages okay moving on for you.

So, volume is the total number the number of shares or contracts that is traded for security or market during a given period of stock. So, each transaction which is also known as sticks contributes to the total volume count and each day could consist of any number of contracts that is traded. Now, this data is visible when you are looking at the order book which is known as your level two data. And many day traders actually exclusively sit and look at the order book held by to see what other traders are buying and selling. So, what you see in the order book is as is Odyssey and people buying, selling, placing stop orders and looking to buy or looking to sell. So, that is what you will see Whatever thing that is what is what we call volume.

Now volume is an important measure of string for traders and they can answer like, and as more generativity and, more trading activity will usually occur in your major levels of interest. So around your major levels that you support and resistance tables, it usually see more volume picking up. The two most popular method display volume is either horizontally as a histogram, we each time unit as an associated volume count, or, alternatively, vertically, which is referred to as your price volume profile. And I'll show you something on trading view. But unfortunately, it's not available on each and every charting platform. And so, when it's displayed vertically, you have a histogram on the chart itself that shows you volume associated with each price level and the level They've been very useful to quickly identify areas of interest.

So maybe it's a bit of look at volume in the chart, going back to a year use the chart, I'm actually just going to remove, I should also leave that and say indicators. So because this is the demo free version of tradingview, you are actually only allowed to have three indicators on the chart at one time and just remove that 250 ma replaced with volume, a bigger volume and here is the histogram at the bottom. So as you can see, these represent tray trades, and that is made and if I quickly add some add back, drawing tools on this, so if we bring back our labels, it really see that around. areas where we meet levels, we get higher volume. So there we go. As we approach this, this area of support of VA, you can see that we probably have some buyers stepping in a green bow.

And the red bar doesn't necessarily represent buying a sensitivity just corresponds to that particular ball having closed either green or red. So not necessarily meaning that it's only bias stepping in this at this table, although it is likely that we did see some buyers coming back in pushing the price back up at this level. And also looking maybe it's still within our levels. See at this point over here, there's a lot of activity and again, you see how we actually am up against overeats resistance. So obviously see we have some sellers stepping So just pointing out areas of interest. And the vertical volume that I was talking about, actually, is this exact same histogram over it's, it's it's setting in your, your left hand sorted chart.

And it's just counting or summarizing the volume at each vertical price level. So I usually like that, although you do not have it available free on this platform, I believe if you go to the volume profile option over here, that would be it. But you'd see you'd need to go pro or at least upgrade to a paid plan to actually see that. So here's an example. And you can look me see, stick on that. See if you can see anything.

So an unfortunate one bigger, but like he likes like I mentioned, you actually have your volume profiles on the side, and trying showing you way the most, the area of most, just all, so there's volume Okay, moving on. Looking at some indicators that is based on volume and very popular one, especially among some of your larger day traders or maybe institutional traders is called your volume weighted average price or the web, I like to call it. Now that's basically a moving average of the price weighted by the number of shares traded. And the idea is to provide an indication of where price should be trading based on the interaction of buyers and sellers. In other words, your volume is used predominantly by institutional traders and hedge funds to scale into positions without adversely affecting the price and while they're scaling into the positions, so v whap, oftentimes serves as support and resistance with a breakout often being followed through and that is just because of those big buyers and sellers moving around the V whap formula together The V whap is the current volume times the price divided by the total daily volume.

So let's have a look at the V whap. Leave, we should be able to get the V whap on yet. I'm just going to remove that 20. It's just move and move the 50 moving average indicators. You get both in on supported resolution, okay, so it's telling me that it's not supported in the daily timeframe. So that's what's meaning by resolution, it moves down to the four hour level.

There we go. There we have it. I'm just going to change the style to maybe something right in between. Okay, so there is see the volume weighted moving average. And so that's just a moving average dropped from your volume. histogram and maybe liquid a little time from short.

There we go. What I'd like to point out here is how it actually acts as resistance and support at various tables. So, you can see how you bigger bias actually into into positions around the V Wop line. So that is the V WEP moving average. So you are also very useful to having a short and yes, get it move on. And on another two indicators that is based on volume is the money money flow index the MSCI and on balance, volume and IBV.

They are both technical indicators that use volume and price to infer or assume possible buying or selling pressure. Both indicators are rather difficult to interpret. But basically what you'd be looking for is divergence between the price and the indicator and explain that on the chart right now. But if for example, the image if phi is above 80, and prices making a swing low, this could imply that prices do a bounce back up. And conversely, if the image is below 20, and price making a new swing high, that would mean a pullback is likely now the concept being that price should fury basically follow volume. I personally prefer using the mmpi as opposed to the IBV and due to it being an oscillator and easier to interpret.

So allow me to show you this to indicate speaking. I'm just going to remove our volume weighted moving average, and at V. There we go, unbalanced volume. And before I'm ply the mF on, it just explained to you the on balance volume. So what on balance volume is it's basically using the green or red candles and the associated volume and adding, adding the volume, the net volume, as you can see, every green green green bar would add to the volume and red force would subtract to it. So it's trying to infer movement based on buying and selling. And you can also use this for that agents.

And just a quick explanation of what the vergence is before we get to the EMF indicator at the vergence would be that if you look at a low for instance, over here and a low over here, you'd see that prices moving up. So we have a higher low and if we look at the bottom of the indicator over here and here, so we can see that you We actually have a lower low. So, that would be divergence because process person making ILO and the indicator is making a lower low. And if the bottoms for instance are not aligning, in other words we have a vergence this would be called a belief a hidden bullish divergence which is continuation so price because it was making a higher now it means it's a very good likelihood that at this at this, at this point price will continue making it less.

So, that is what I mean divergence. So, Let's exchange the ABV for the MSI. This is for the money flow index debugger just called money flow in this instance we are As you can see, it's an oscillator that moves between zero and 100 which our likes makes it easier to read. And you can also set your your periods that's actually looking at the different value by default it is set to 14 and let's look at some divergence of yesterday you can see that center virgins parent, so, we both do these making a lower low must always correspond the same and lows to the price chart to be accurate. So do we have some hidden bullish divergence? it see if we have some other divisions I love and I have so much divergence in see the indicator moving up.

Price moving down, so that would be a vergence. And whenever you see the lows not aligning, in other words, if you have price moving down or price Coming up and indicated even the opposite, we usually would have some continuation. So, this would be called a regular bullish divergence. So, do we have some price moving back up looking at the tops, just see if see if we can see some examples over here. Just quickly look, this may have been strong for years. So, today we have a higher a higher high.

So high followed by a lower high and looking at sample corresponding example over here we have a much higher high. So that should me tops is not aligning. So that means we probably moving down as you can see, so divergence very powerful. We would spend some spend much more time looking at divergence and with some of our other indicators as well. So that is your money for index most be useful picking up these divergences and trading well in Japan, okay, so Bollinger Bands was developed by john Bollinger in the 80s. And it is a very popular technical indicator that calculates two bands, both upper and lower band from a moving average using standard deviation to factor in volatility.

And by factoring in market volatility Bollinger Bands can dynamically adapt to shifting market conditions. In other words, in a more volatile market, your bands will widen and in less volatile market or bands will narrow and statistically around 90% of trading activity should occur within the bollinger bands. And if priced those outside of Bollinger Bands this issue these and this would usually signify a continuation of the price. So in other words, the breakout with reversals from the inside of the bands So with advanced access, resistance or support will usually signify price reversal to the opposite side of the dance. So in other words, it's bouncing within the bands. Now there are three major strategies that is associated with bollinger bands.

These include your plunger squeeze, with, usually followed by breakout, the bollinger bands, which is mostly useful trending or ranging markets with prices moving from the one side of the Bollinger band to the other in a ranging fashion and in what we call a W or in reversal. So we would have a look at all those in much more detail. Now, starting with a picture, and I'm including a picture just because the bollinger bands are probably my favorite technical indicator to use. So I just like to spend some time providing some examples. And so to trade the Bollinger squeeze that is the first of two methods that we can use to trade a bunch of bands. And we're looking for the bands to contract for it by a large, large body candle closing outside of the bands.

So they can either be to the upside or to the downside and the Bollinger squeeze is in best suited to your trending markets. And so you can see your bollinger bands, you can see how they've widened due to increased volatility. And in the ever appeared the market is democritus ranging at meaning the market the bands are now squeezing, it's contracting and all of a sudden we have this explosive bearish candle that actually moves to the downside thousand outside the Bollinger so that would be a very good signal to go short. And you can actually just put your stop loss right above that, that candle and it's actually give you a very nice breakout to the downside. And just before we move on, I should just like to show you where I can add the bollinger bands. So again, use the sample as the Bollinger Bands by searching for bollinger bands.

That is your bollinger bands. And you'll actually see that the example I'm using on the slide is actually a very recent example from the end of May. As you can see, this is actually a screenshot of this part of the year. So that is the bollinger bands, these two bands, your median band and your bottom band and your steering. If you change the period, each by default define as security periods calculate the standard deviation of two. But let's just go back to slide for now.

So I'd like to Point out when you're trading this oranges squeeze a strategy, your stop should be placed on the opposite side of the medium band. And so in this example, you have a breakout to the downside. Your opening price is above the median. But I'm just trying to point out that you're so close. Usually if that were to open every day and interest aborting, it's too likely put your stuff stop loss above the median line, that middle line is okay. So it's a private ganas immediately followed by a large part it can go in the opposite direction you could try the reversal.

So what I'm saying is that if this candle So in this instance we have a breakout to the bottom and immediately instead of a follow up candle be maybe see if you were waiting to see immediate reversal back maybe even closing above the medium band but not even necessarily. Outside just anyway back into the And maybe looking at that place 50% above that Red Bull a bearish candle, you'd maybe try to draw and look at trading that reversal to the upside of the band. I'd like to show you another example here that's the opposite. And so you can see you moving to the bottom of the bands and shaving is a pullback. And invoke continues moving downwards, it bounces on the bottom of the band day. Again, we had an orange squeeze.

You can see that squeeze and a very explosive bounce closing right above the upper Bollinger Band over here. And yeah, that is that would be the point where you'd like to buy long in place nice stop loss just below the candidate drug to puncture but below the median line of the and in education. Price progresses upwards in this instance, you can actually dynamically move a stop to stay just below this median line using it as a form of dynamic dynamic stop loss levels. So as price moving, you can actually move your stop loss level up to lock in profit to help determine targets. And for instance, if you went short here, around here, if you wanted to know where to get out, well, one place to get out would be the bottom of the pole in Japan. So you see, price usually move down close back into the bunker, usually go back for a retest of previous support or even the median or even that breakout level which happens in this instance and then actually moves back to the bottom of the Bollinger before actually, maybe then direction I I burst To use the RSI indicator and to do to find these targets, but they are lots of other methods including the mocha price theory methods which we'll cover in future future modules or actually lighter import import to have multiple things.

I noticed I indicated to you that you can actually spot the W bottom so that's something that we'll discuss. I think on the next slide the slide of the debt and W bottom is actually we we are forming this W. We we have a close outside of the Bollinger it moves back into the orange it doesn't actually close outside the Bollinger band and then moves back up to that is a thought I thought w bottom, but we'll discuss that very soon. The next strategy is called the Ballinger bounce. So to try bollinger bands we will be looking for the market to start arranging. In other words we are looking for the market to start going sideways. And if you remember we used moving averages as explained earlier and we can actually see when those moving averages started taking dangle to be sorted going sideways.

So, whenever you identify a sideways market this is a nice strategy to trade and this is the bottom chip downs. So, once this happens, we will look for candles to make a high above the upper Bollinger band in the in reverse to close below it or to make a low below the lower Bollinger band and close above it. In other words the band can be used as a dynamic stop and it targets touch of the opposite band. So let me just explain that. So what I mean with a close a low touch above the band in a closed period is this. So you can see we have a high price above the upper Bollinger Band But price gets rejected from the puffy clouds has been notable in Japan and with fear being pricing rejected yet.

So in this situation, you probably would only have sketched the entry around here. So you would have on short and you're trying to try to the next or you're trying to trade the opposite opposite side of this bed which is yet so you close a position again, it is a rejection of price. So we move with the low below deliverable and Jen price gets rejected. It actually closed way about here. And they you tried a long position, so maybe going up or down, using the median line is some consultation, a consultation area but eventually we do move up and do indeed closet up here. David had that projection again high close below the Bollinger band and you can read through bottom again, you can see rejection from the bottom of the band.

Okay, so in this instance, we never did touch the upper Bollinger Band. In other words, we would not necessarily have made the target, but like upon after the touch event, which means you would like to exit the trade on a close below the median line. So if you go up, you do miss a target, you go back down, you didn't want to exit your trade just close below that median line. And here's an example of and I'd like you to note that the median line can also be used as a first like profit target. So for instance, it's weird to say you you're trying this long, so we're going along around this area. Price movie, we open two positions.

Let's say we open two positions because we want to pay like first like profit target mistaken, like profitable. So going along At around this point maybe we should be caught in at this at the slowest. So we go along with like profit at the median line. So at least we banked a little bit of profit price goes up, quite touched the upper punch, it goes back close below the median, so you can actually close a second position. So both visit this position would have been a very small profit as well, but at least both position close after profit. So let's say we quit that trade.

Now again, for the short, this one would have worked out and we went long and again, these will go long around this table or even if you put in around after this rejection of price of the year, you will state in your professed profit around the median line. And often we notice it doesn't doesn't touch the upper Bollinger Band but that is below that with like, we close that first position probably for a break even you're for a break even trade But at least at first position that doesn't profit. So that's basically the point of doubts. Now, the Bollinger reversal. So the bollinger bands are also very useful to identify and trade trend reversals. And these usually occur near the end of a trend and can be identified by what is referred to as a W Porton bottom or top.

Now these reversal structions occur when direction movement starts to fail, and press no longer manages the clouds beyond the bands. And they oftentimes also coincide with a button check squeeze and as shown that first examples. So let me show you a sample of recent recent info we had so you can see the year we ever close above or very close of the Bollinger band and then coming down Going bouncing on the bottom here, going back up is an actual sample from a previous slide. But so going up we not closing above the Bollinger Band this time. So price not quite making it and we're moving back down. So if you draw a baseline so yeah we say close close below base of him and below lower band.

So the area of support line at be controlled. And if you ever close below that, then we can try that as a breakout to the downside placing a stop maybe above the high of the candle in it, it's not too far away from the median, maybe closer to the median line just to ensure you're not getting stopped out for a small pullback in price but that is put the call in top and that usually indicates price being reversed from an uptrend to a downtrend. Looking at a sample of a W bottom, you can see we have price coming down, closing outside the Bollinger Band, a potential lower band going back up bouncing off the median in this example, which is forming our baseline. It doesn't let us close outside the pollen shed like you did over here, you actually have a very nice rejection candle as well.

Moving up closes above that price. And to be able to close at this point about the plunger, but you can actually be disappointed after this price rejection, you can actually place your, your stop order for a long position right around the politics age around the I feel like and then you place a stop loss at the bottom of that that candle that produces the breakout or maybe place it around the meeting line again. And we're also interest He actually do see how often this w reversal, bottom reversal, how that baseline now actually accessport. And going forward so price moves up comes back into that sport line doesn't stop you out because you place a stop loss low enough. And now that extra support and price bounces off of that and continue to move upwards, changing the price from a downward move to an upward move. That's why it's pulling it every vessel.

So that concludes part one of mature thing. Thank you very much and if you have any questions so far, feel free to mail them to me at info at if it's automated got