On
of the basics
of tech analysis is the notion of trend. Trend is the main direction of
price movements over a certain timeframe. The price never goes strictly up or
down, instead, it goes wave-like, yet the chart can give a general picture of
where the price aims.

Trend
direction

The
market distinguishes an uptrend and a downtrend. In graphic analysis, trends
are drawn by trendlines called the support line for an uptrend and the
resistance line for the downtrend.

An
uptrend is alteration of ups and downs, peaks and bottoms, each next one being
higher than the previous one. Here is an example of an uptrend on a screenshot.

As
seen in the picture, peaks and bottoms alter but successively growing bottoms
confirm an uptrend. A line drawn through the extremes of the bottoms is called
a support line.

A
downtrend is alteration of ups and downs, peaks and bottoms, each next one
being lower than the previous one. Here is an example of a downtrend on a
screenshot.

As
seen in the picture, peaks and bottoms alter but successively decreasing peaks
confirm a downtrend. A line drawn through the peaks is a resistance line. The
steeper the trendline inclines, the brighter and stronger is the trend.

A
flat means price movements in a strict range, without a clear trend. For
example, the price fluctuates in a 10-points range for a certain time.

Trend types

Trends
can also be characterized time-wise. There are long-term, medium-term, and
short-term trends.

A
long-term trend can happen on a yearly, monthly, or weekly timeframe. A
medium-term trend – on a D1 or H4, and a short-term one – on H1 and smaller. Hence,
talking about a trend, it is important to specify the timeframe. As long as the
trend consists of impulses and corrections, it will look differently depending
on the timeframe.

For
example, if we talk about a long-term uptrend that, indeed, appears on MN, we
should remember that at a certain point the price can be in a correction. So,
on a D1, the trend can be descending.

And
if that downtrend on the D1 is also correcting, on H1, the trend can be
ascending.

Apart
from uptrends and downtrends, the market can give the price no distinct
direction. This is a flat. In such times, the price moves in a channel or range
from its upper border to the lower and back.

Bottom line

Always
remember that trading the trend is normally more profitable. Hence, trend
trading systems are extremely popular among equally beginners and experts. The
main problem can be waiting for a trend to start because most of the time the market remains in a flat. However, patience will pay
the trader a hundred times.

By
RoboForex
Analytical Department

Pivot points
are mostly used by day traders. It’s a technical indicator which, through a
calculation of the previous day’s data like the high, the low and the closing
price, displays levels on the chart that could be used as support and
resistance.

 

Generally,
you have the central pivot point (P) and then the possible resistance and
support levels (R4, R3, R2, R1, S1, S2, S3, S4). Calculations can be applied
also to the previous week or month’s data in which case you would have weekly
and monthly pivot points, but the most used ones are the daily ones.

 

daily pivot points

 

Pivot points
can be used for confluence with other technical concepts or indicators to find
possible tradable levels and for stop loss placement. For example, you may want
to go long and see if there’s a good level of support where you can enter. You
find a nice previous swing point level that is in the same area of the pivot
point (P), and on top of that you also have a moving average.

 

So, you
found this nice confluence zone and the only thing you need to do is to open
your trade and place you stop loss below that area, so if the price starts to
go against you, then your trade setup would be invalidated.

 

Trade Setup on the confluence zone

 

As always,
don’t trade based solely on technical analysis but get your trade idea from
fundamental analysis first. Once you have your direction, switch to the chart
and start to structure your trade.

 

This article
was written by Giuseppe Dellamotta.

China continues to remain the big unknown for the outlook this year. The COVID-19 spread and lockdowns have thrown a big curveball to the global outlook in the past two months and there’s still little certainty on how all of it will end for the time being.Add to the fact that Chinese authorities remain rather coy about providing all out support, it makes for a tricky period when viewing the domestic Chinese economy.

There’s some mixed undertones playing out in European morning trade so far, as we’re probably seeing markets settling in after the Easter break. The dollar is trading a little lower (except against the yen and franc) even as bond yields are inching higher.EUR/USD is up 0.2% to trade back above 1.0800 but still faces near-term resistance closer to 1.0823 from its 100-hour moving average. GBP/USD is also still flirting with daily support at 1.3000, trading up to 1.3030 currently from a low of 1.2990 earlier.USD/JPY remains the notable exception with the yen dropping like a fly across the board. The pair trades up 1.1% to 128.30 levels at the moment.Elsewhere, European stocks are still being pressured lower by nearly 1% across the board. And US futures have erased earlier gains with S&P 500 futures trading down 0.1% currently.

Here’s a look at Treasury yields on the day: 2-year yields +1.7 bps to 2.477% 5-year yields +2.7 bps to 2.823% 10-year yields +3.5 bps to 2.897% 30-year yields +3.5 bps to 2.987% The levels are the highs for the day as the bond selling looks to resume. In turn, that is pinning USD/JPY higher with the pair now up 145 pips to 128.42. In general, the yen is dragged down across the board with AUD/JPY also trading up to its highest since July 2015, closing in on the 95.00 level. Again, I’d like to point out this chart when it comes to the bond market: 10-year Treasury yields are looking to break key resistance in the form of the 200-month moving average (blue line) as well as the channel range that has been persisting for more than two decades now.