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 • Price information is complete or markets discount everything
  Anything that can affect the market price of a commodity - political rumours, changing economic conditions or even psychological perceptions, is already reflected in the market price. Price action according to Technical Analysts should reflect actual shifts in Supply and Demand. Example: Assume the price of gold is increasing. Economists may say that there is a plenty of gold supply and that prices should not be increasing. The market would say that we know there is plenty of gold supply, the price reflects this but demand for gold has increased and therefore prices should be increasing. The weaknesses of fundamental analysis as a rule are complemented by technical forecasting. The latter captures market sentiment, mood and expectations. But on the other hand history does not repeat itself exactly and patterns do not occur in exactly the same way. Circumstances may change and what has worked in the past will not always work in the future. Therefore any trading plan needs to be correctly implemented by using both aproaches: fundamental and technical. If both results are in agreement, the confidence in a forecast is greatly enhanced. Newcomers to the forecasting should observe some guidelines that may be of help. Basic framework of forecasting implies establishing outside markets contacts. Through dialogues the newcomer gains the market participants' rationale behind the forecast. Reading market documents helps to broaden perspective and makes it easier to single out key bullish and bearish fundamental factors. When new to the markets one should devote time to writing forecasts focusing his attention on the most important factors, identifying key points and patterns as they form. Step bv step the newcomer realises that markets sometimes behave irrationally. It is not easy to beat the markets because there are too many variables at work. But making market decisions and assuming responsibility the individual acquires experience in trading the market. Э:
 reverse - поворот назад to ride trends - использовать тренды
 au to discount - обесценивать e to affect - влиять
 e perception - ощущение, восприятие
 ai supply - предложение
 cu demand - спрос
 Э:
 to occur - происходить, случаться
 i to implement - претворять в жизнь, осуществлять
 ае э to complement -дополнять
 э 'confidence -уверенность
 о: to enhance - усиливать
 
 
 
 
 
 
 
 
 ei
 framework - каркас, структура
 i: to beat smth. - обставить, побить
 Э variable - переменная
  Comprehension Questions
 1. Who produces the fair value of the currency?
 2. Why do currency prices fluctuate?
 3. What is the technician's challenge?
 4. What are the basic principles of traditional Technical Analysis?
 5. How does history repeat itself?
 6. Why do markets discount everything?
 7. What approaches in forecasting yield good results?
 8. By what events are markets driven now?
 9. What precede upcoming political and economic events?
 10. What saying reflects this process?
 11. In what way do central banks influence financial markets?
 12. How are the weaknesses of fundamental analysis complemented?
 13. What are the guidelines that newcomers to forecasting should observe?
 Exercises
 Ex.1. Learn the terms and verb collocations and make up 20 sentences with them.
 
 to agree about the price to produce a fair value to strengthen (to weaken) to run into selling pressure (buying interest) to grow in popularity to be reflected in the price to reflect shifts in Supply, and Demand to gauge changes in trend to be based on psychology to work in the past to lie in the past to estimate future direction to identify patterns to ride the rising trends to show signs of a reversal to discount everything to capture market sentiment to implement a trading plan to use technical approaches to be in agreement with
 Ex. 2. Put questions to the underlined words in the text and let your partner answer them.
 Ex. 3. Select the subordinate clauses and state of what kind they are (object clause, attributive clause
 adverbial modifier clause of time, place, cause, etc.)
 Ex. 4. Read and translate the text.
 Ex. 5. Draw up a plan of the text and render it.
 Comprehension Questions
 1. Who produces the fair value of the currency?
 2. Why do currency prices fluctuate?
 3. What is the technician's challenge?
 4. What are the basic principles of traditional Technical Analysis?
 5. How does history repeat itself?
 6. Why do markets discount everything?
 7. What approaches in forecasting yield good results?
 8. By what events are markets driven now?
 9. What precede upcoming political and economic events?
 10. What saying reflects this process?
 11. In what way do central banks influence financial markets?
 12. How are the weaknesses of fundamental analysis complemented?
 13. What are the guidelines that newcomers to forecasting should observe?
 Exercises
 Ex.1. Learn the terms and verb collocations and make up 20 sentences with them.
 
 to agree about the price to produce a fair value to strengthen (to weaken) to run into selling pressure (buying interest) to grow in popularity to be reflected in the price to reflect shifts in Supply, and Demand to gauge changes in trend to be based on psychology to work in the past to lie in the past to estimate future direction to identify patterns to ride the rising trends to show signs of a reversal to discount everything to capture market sentiment to implement a trading plan to use technical approaches to be in agreement with
 Ex. 2. Put questions to the underlined words in the text and let your partner answer them.
 Ex. 3. Select the subordinate clauses and state of what kind they are (object clause, attributive clause
 adverbial modifier clause of time, place, cause, etc.)
 Ex. 4. Read and translate the text.
 Ex. 5. Draw up a plan of the text and render it.
 
 MARKET STAGES
 
 Traditionally markets move from Bull markets to Sideways
 markets to Bear markets. They move from Bear to Sideways to
 Bull. People however tend to forget the sideways market stage
 and assume that markets move from Bear to Bull, to Bear. The
 only markets that do in fact move from Bull to Bear are the
 exceptions and not the rule - they are parabolic markets and are
 usually characterised by thin trading volumes.
 Traditionally speaking, the market stages can be sum
 marized as follows:
 > Markets accumulate - go sideways at the end of a down
 trend
 > Markets then trend up, trending up they have a correction
 or a pause
 > Markets then climax or peak
 > Markets accumulate (distribution - sideways movement
 at the top)
 Markets trend down
  Vocabulary 0: accordingly - соответственно
 
  au to'counter - выдвигать контраргумент
 
  time frames - временные рамки
 
  i to anticipate - предвосхищать
 
  > e > exception - исключение
 
  о volume - объем to apply - применять, использовать (to be) due - ожидаемый, обусловленный ei
 
 
 A trader does not sell just because the market has been in an up trend for a long time and a change is due. Before you sell, you at least need to see a sideways move in the market. Technical Analysis is applied to markets because: 1. Markets have stages. 2. Within the stages, there are behavioural characteristics. 3. Within the behavioural characteristics, you have specific patterns. There exist three types of market trends: 1. Up Trend 2. Down Trend 3. No Trend-Congestion
 ehavioural
 i sophisticated
 э 'option
  поведенческий - сложный - опцион
  Comprehension Questions 1. What market stages do you know? 2. What is the most important factor of a price chart? 3. What factors determine the importance and strength of the trend line? 4. How does the trend line act in bear and bull markets? 5. How can up and down trends be identified? TRENDLINES The cornerstone of technical analysis theory is that prices discount all known information, and forecasts, and that these prices move in trends. Therefore, the most important factor to determine when looking at a price chart is the direction of the prevailing trend. Trends are evident in all degrees, from intra-day trends in 5-minute bar charts to trends of a few weeks on daily charts, to multi-year trends on weekly and monthly charts. Regardless of magnitude, an uptrend is defined as a series of prices with higher highs and higher lows. A downtrend is most simply a series of lower highs and lower lows. sideways trends also develop and occur when neither an uptrend nor downtrend is evident. In an uptrend, a trendline can be drawn bv connecting increasingly higher lows. while in a down trend a trendline is usually drawn from increasingly lower highs. The importance and strength of the trendline is determined by the length of time the line exists and the number of times that the trendline halts price movement. Thus. the longer the trendline has existed and the more prices bounce off the trendline, the stronger the trend. In a bull market, the trendline will tend to act as price support, in a bear market the trendline will tend to offer price resistance. Supply pressures during a bull market will come into play at support levels. pushing prices up off support as supply diminishes. In a bear market supply will increase on upticks, keeping prices under pressure. Demand acts in the reverse order, increasing on price dips in a bull market, decreasing on price upticks in a bear market. Thus. some technicians (particularly those with an economic bent) will refer to a bull trendline as a supply line. Conversely, during a bear market, resistance will be found along the trendline pushing prices lower and lower. This trendline may be viewed as the demand line. indicating where demand will be insufficient to push prices to higher levels. The preferred method of looking at trends is to know the long term trend, multi-year, and then work to daily of intra-day trends. CHANNELS Once a trendline is established, technicians attempt to identify a price channel which will contain prices. These are most commonly drawn as parallel lines from a significant high (in a downtrend) or a significant low (in an uptrend). Identifying a change in trend can be a simple matter using technical analysis. Any violation of the current trend confirms a change in trend. For instance, a series of consecutive lower lows and lower highs, following a mn-up in price, could indicate a change in the price trend from up to down. Early identification of a change in trend may be signalled bv a price breakout through the trendline and out of the price channel. Trendline and channel drawing is a subiective art, so there are several things to look for to validate the channel penetration. i technique e to 'penetrate ei to maintain e consecutive as 'magnitude as 'valid i to 'signify - метод - проникать - утверждать - последовательный - величина - имеющий силу - указывать First, it is important that the close penetrates the channel. Penetrations of the high or the low are more often indications of temporary overbought or oversold conditions in the market,
 Comprehension Questions
 1. What market stages do you know?
 2. What is the most important factor of a price chart?
 3. What factors determine the importance and strength of the trend line?
 4. How does the trend line act in bear and bull markets?
 5. How can up and down trends be identified?
 
 
 TRENDLINES
 The cornerstone of technical analysis theory is that prices discount all known information, and forecasts, and that these prices move in trends. Therefore, the most important factor to determine when looking at a price chart is the direction of the prevailing trend. Trends are evident in all degrees, from intra-day trends in 5-minute bar charts to trends of a few weeks on daily charts, to multi-year trends on weekly and monthly charts. Regardless of magnitude, an uptrend is defined as a series of prices with higher highs and higher lows. A downtrend is most simply a series of lower highs and lower lows. sideways trends
 also develop and occur when neither an uptrend nor downtrend is evident. In an uptrend, a trendline can be drawn bv connecting increasingly higher lows. while in a down trend a trendline is usually drawn from increasingly lower highs. The importance and strength of the trendline is determined by the length of time the line exists and the number of times that the trendline halts price movement. Thus. the longer the trendline has existed and the more prices bounce off the trendline, the stronger the trend. In a bull market, the trendline will tend to act as price support, in a bear market the trendline will tend to offer price resistance. Supply pressures
 during a bull market will come into play at support levels. pushing prices up off support as supply diminishes. In a bear market supply will increase on upticks, keeping prices under pressure. Demand acts in the reverse order, increasing on price dips in a bull market, decreasing on price upticks in a bear market. Thus. some technicians (particularly those with an economic bent) will refer to a bull trendline as a supply line. Conversely, during a bear market, resistance will be found along the trendline pushing prices lower and lower. This trendline may be viewed as the demand line. indicating where demand will be insufficient to push prices to higher levels. The preferred method of looking at trends is to know the long term trend, multi-year, and then work to daily of intra-day trends.
 CHANNELS
 Once a trendline is established, technicians attempt to identify a price channel which will contain prices. These are most commonly drawn as parallel lines from a significant high (in a downtrend) or a significant low (in an uptrend). Identifying a change in trend can be a simple matter using technical analysis. Any violation of the current trend confirms a change in trend. For instance, a series of consecutive lower lows and lower highs, following a mn-up in price, could indicate a change in the price trend from up to down. Early identification
 of a change in trend may be signalled bv a price breakout
 through the trendline and out of the price channel. Trendline and channel drawing is a subiective art, so there are several things to look for to validate the channel penetration.
  technique
 e to 'penetrate
 ei to maintain
 e consecutive
 as 'magnitude
 as 'valid
 i to 'signify
 
  метод
 - проникать
 - утверждать
 - последовательный
 - величина
 - имеющий силу
 - указывать
  First, it is important that the close penetrates the channel. Penetrations of the high or the low are more often indications of temporary overbought or oversold conditions in the market,
  First, it is important that the close penetrates the channel. Penetrations of the high or the low are more often indications of temporary overbought or oversold conditions in the market,
  First, it is important that the close penetrates the channel. Penetrations of the high or the low are more often indications of temporary overbought or oversold conditions in the market,
  First, it is important that the close penetrates the channel. Penetrations of the high or the low are more often indications of temporary overbought or oversold conditions in the market,
  First, it is important that the close penetrates the channel. Penetrations of the high or the low are more often indications of temporary overbought or oversold conditions in the market,
  First, it is important that the close penetrates the channel. Penetrations of the high or the low are more often indications of temporary overbought or oversold conditions in the market,