Day: November 11, 2012

Categories
The Road Ahead Trading Game

Week 8 – The Road Ahead

This week’s focus will be on technical analysis. I am still learning about it and it’s interesting to see some patterns on the charts.  Like Andrew said in his workshop, the fundamental side of analysis usually confirms the patterns and trend identified with the technical analysis. For example, for the December wheat 2012 in the recent while, there’s inverse head and shoulder (if I am not mistaken) prior to last week’s 4 days rally.

Head and Shoulder (W2Z)
Source: CME Group

Along with identifying the patterns and trend from the price movement, the trend in volumes is also an indication / confirmation of how strong a price trend is and how likely it will continue to be or come to a reversal.  For example, “ff volume is starting to decrease in an uptrend, it is usually a sign that the upward run is about to end”[1].

I will continue to gather information from daily news to form my fundamental analysis when I jump into this technical analysis fest.  At this point, I anticipate the followings:

  • Soybeans: Prices would rise in a day or so as traders start to lock in their profits gained on last Friday’s plunge.
  • Wheat: Prices would go down for a day or so and go up again ( a technical analysis based on the observation of the downward price and upward volume).
Downward price and Upward volume (W2Z)
Source: CME Group
  • Corn: Its prices haven’t changed much recently. More investigation is needed.

Cheers.

 

Reference:

1.   Janssen, Cory, Langager, Chad and Murphy, Casey. (n.d.). Technical Analysis: the importance of volume.  Investopia. Retrieved from  http://www.investopedia.com/university/technical/techanalysis5.asp#axzz2By6bPZeP

 

Categories
Cool Source of Information Trading Game

Week 8 – Cool Source of Information : arts on charts

For the rest of the weeks, we will be shifting focus to technical analysis. The following 2 websites should be helpful for that.

  •  Investopia (http://www.investopedia.com/university/technical): Andrew’s workshop on Technical analysis on the past Wednesday was enlightening. I seem to remember most of the names of the patterns, but not exactly how to make use of them. I found this site that offers a tutorial on technical analysis. As you go through the tutorial, you will get to learn about the philosophy behind Technical analysis, comparison between fundamental and technical analysis, price support and resistance, importance of volume and the price movement patterns, etc.
  • TradingCharts (http://futures.tradingcharts.com/):  The charts here are rather interactive, you can click on the candlestick or the bar, etc of each day and the overview (volume., open interest, high price, low price, etc) of each trade day will be displayed. The charts also show the MADC (moving average divergence convergence) , RSI (Relative Strength Index), and Volume for further technical analysis. What’s more, it actually provides daily analysis (implications drawn from each indicator) underneath the charts. It’s good to learn from other’s analysis, learning from examples.  However, down the road, it’s important to do our own analysis instead of relying on others’ despite the convenience (there’s not too much explanation anyways, more on conclusions).

 

Happy trading with Technical Analysis or the combination of both Technical and fundamental analysis.

Cheers!

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