There are two types of analysis used by traders to inform their trading decisions. Technical analysis and fundamental analysis. In this course, you will learn about the various patterns, indicators, and analysis techniques traders use when studying the price of a commodity. We will start at the beginning by learning how to read price charts. Then we’ll cover some of the more popular techniques such how to identify trend and reversal patterns, finding support and resistance levels, and various oscillators.
Chart Types: Candlestick, Line and Bar
Trading charts are essential to technical analysis in the futures markets as they provide the foundation of the entire study. They are the means to view price moves in a visual way and form the backdrop on which you can place various indicators to help you make decisions.
Understanding Moving Averages
Moving averages are a common way for technical traders to begin the process of price analysis. It is often one of the first indicators that traders will add to their charts and will serve as a measure on its own or in comparison with other indicators.
Trend and Continuation Patterns
Technical analysts look for certain types of patterns that generally indicate that a market will reverse or continue moving in a certain direction.
Technical Patterns: Reversals
Technical analysts may look at patterns in price to determine whether a trend will continue or if a reversal in trend is possible.
Support and Resistance
Support and Resistance are common terms that traders use to describe levels where price is more likely to stop moving in one direction or change direction.
Fibonacci Retracements and Extensions
Fibonacci numbers have a foundation in ancient mathematics and have found their way in to trading indicators as well, included in most charting platforms.
Oscillators: MACD, RSI, Stochastics
Oscillators are a group of technical indicators that attempt to indicate the strength of a trend and if a market is over-bought or over-sold.
There are many factors that traders look at and analyze when choosing a futures contract to trade. Some traders might look for trends on a chart while other traders might look to see if demand might be increasing for a commodity.