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 TECHNICAL ANALYSIS PATTERNS
 
 Price Information: Open-High-Low-Close-OHLC
  To accurately read the market, you only need four pieces of information: the Open, the High, the Low and the Close Price. Vocabulary
 e to reflect - рассматривать The Open Price
  This is the price at which the first trade for the day takes place. Both buyers and sellers have had time to reflect upon the markets close on the previous day. Their perceptions will affect whether the stock opens higher or lower the next day. The subsequent price holds the clue as to which side of the market is the more dominant force - the buyers or the sellers.
 The High Price
 This refers to the highest price at which the security has traded that day. It is at this point that buyers decide not to push the price up any higher or alternatively, when sellers have gained control. If the high is at or near the opening of the day, that is a sign that the sellers have been the dominant force. If the high occurs near the end of the trading session and the open was near the low of the day, the buyers have had control. u: 'clue - ответ Э:
 to occur to gain control -
  случаться - устанавливать контроль The Low Price
 
  This refers to the lowest price at which the security has
 
  traded that day. At this point the sellers have decided not to accept a lower price or alternatively, when buyers have gained or regained control of the market.
 If the low is near the opening of that day, that is a sign that
 the buyers have been the dominant force. If the low is near the close of the day, that is a sign that the sellers are keen to sell and that therefore they have been in control.
 The Close Price
 The close is also sometimes called the sentiment. It is the
 price at which the security is trading at the end of the day. This is the most watched price in analysis as it is seen as the final judgement on who won the day between the buyers and the sellers.
 If the close is at or near the high of the day and the opening was near the low, it points toward a day of buying. An intra day chart would also reveal that prices were probably in an upward trending mode all day.
 If the close is halfway between the high and low irrespective of the open, that is interpreted as the market being evenly divided. That is, that the buying power was balanced by the selling pressure. to be keen - быть заинтересованным
 
 
 
 
 
 
 
 
 
  e
  'sentiment - настроение
 
 
 
 
 
 
 
  to win the day - добиться победы
 
 
 
 
 
 
 
 
 
  l
  'irrespective of - независимо от
 
 
 
 
 
 
 Price Patterns
 Whether the market is ranging or trending, price movements are not always smooth. As a result price pattern identification is used to determine whether a market trend is intact or whether there exists the possibility of a reversal.
 On the basis of chart formations significance to the current trend of the currency they fall into two categories: reversal patterns and continuation patterns.
 Reversal patterns
 
 A prerequisite for any reversal pattern is the presence of a trend.
 Reversal patterns are often accompanied by a break in the trend line or pivot point. (The larger the pattern, the greater the significance.)
 Head and Shoulders Reversal Pattern
 The Head and Shoulders pattern is one of the most popular patterns but also one of the most difficult to identify. This pattern derives its name from its formation - which resembles a person. A true head and shoulders pattern will have the left and right shoulders roughly at the same height and distance from the head. The neckline should be almost level.
  Head Голова
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Before A the neckline was a resistance line. Once it was
 broken the resistance line turned into a support line. At points В and С the price bounced off it twice. The neckline was broken in point D and the trend reversed. A retest took place at point E.
 The neckline was a resistance line again. The resistance point held, and the price declined to the level of F, the price target of the head and shoulders formation.
 In an uptrend Left Shoulder represents a correction. If it
 takes place - traders may take profits. Trend is still intact.
 The Head indicates: that prices move up and surpass the
 high of the left shoulder (Climax), but then move down again.
 This places the upward trend in question.
 Rieht Shoulder represents a retest. Buvers re-emerge and
 price starts to go up again. If price moves up to the same level of the left shoulder or if it retraces 50% from the Head to the ootential neckline - the rieht shoulder is complete. It is an indication that a down trend is in place.
 There are various analysis regarding the role volume plays
 with Head and Shoulder patterns. In an uptrend some maintain that the left shoulder carries the hiehest volume, that volume, decreases at the Head and then falls substantially by the right shoulder. Others maintain that the volume is highes at the Head and has a greater decline in the right shoulder.
 When the market moves out of a Head and Shoulders
 pattern to the upside, it must have high volume.
 
 
 
  au
  to 'bounce off - - отскакивать
 
 
 
  a.
  'target - цель, точка движения цены
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TIME
  Double tops and bottoms are more common than (but not as significant as) triple tops and bottoms. A double top is referred to as an M, while a double bottom is termed a W. Double top and double bottom patterns are fairly common on price charts, but are often ovemsed. In a double top, a new high is set on strong volume, then volume subsides as prices decline. On the ensuing rally, prices climb back to the first high, but fail to close above this level, and prices begin to fall again. (C) At this point, there is only a potential double top. It is not confirmed until prices close below the first low, usually on strong volume.
 
 sju: ensuing - следующий
 i: to exceed - превышать
 u: 'crucial - решающий, важный
 ei prevailing - господствующий
 
 
 After a settlement under this low has been recorded, prices should continue to move a distance equal to the height from the original high to the first low. The same is true for double bottoms, but in the opposite direction. A variation of this pattern is the triple top (and triple bottom). This begins like the double top, but instead of the second correction breaking the first low, prices rally from this point back to the original high. Then, on the third correction, if prices close below the two previous lows, the pattern is complete. The measuring objective is identical to the double top. These patterns often occur at major tops and bottoms, and often exceed the original target by a substantial amount. It is cmcial, though, to wait until prices settle below the first low. Clearly, a breach of the highs in a potential top, or the lows in a potential bottom will leave this looking like a breakout in the direction of the prevailing trend, and rectangle/ consolidation area breakout would be in action, potentially a flag as well.
 Rounding Tops and Bottoms
 
 
 A less frequent, but no less useful technical formation is the rounding bottom and rounding top. They are sometimes referred to as saucers and inverted saucers, respectively. As the name implies, a rounding bottom occurs when prices gradually shift from a downtrend to an uptrend to form a short of shallow "U" shape on the charts. To validate this formation, it is important that the volume also form a saucer formation: that is, volume should gradually decline as the downtrend ends, then slowly increase as prices begin to rise again. In a bottom formation, this type of price action represents accumulation - the "smart money" slowly adding to long positions. At tops, this formation represents distribution, or the "smart money" getting out of long positions and adding to short ones. A common variation of saucers is for prices to rise sharply and suddenly on strong volume near the mid-point of the formation. This activity only lasts a few sessions, after which prices fall back within the rounding pattern. It is difficult to determine exactly when the pattern is complete, but a good indication occurs when volume begins to increase sharply or prices break an important area. 0:
 'saucer
 ae 'shallow
 ae to validate
 smart money - блюдцо, соусник - мелкий
 - узаконить, сделать действительной
 - вложение денег без риска, используя секретную информацию
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 COMPREHENSION QUESTIONS
 1. How many prices does the dealer need to know to read the market?
 2. What affects the open price?
 3. What does the high near the end of the trading session show?
 4. Why is the close called sentiment?
 5. What do price patterns indicate?
 6. Which is the most popular reversal patterns?
 7. What role does volume play with Head and Shoulders patterns?
 8. Compare Double Top and Rounding Top patterns.
 EXERCISES
 Ex. 1. Put questions to the underlined words.
 Ex. 2. Compare the reversal patterns and state their difference.
 Ex. 3. Translate the dialogue from English into Russian in writing and from Russian into English orally.
 
 DIALOGUE:
 Client: What are the prerequisites of reversal patterns?
 Broker: A prerequisite for any reversal pattern is the presence of a trend. A break in the trend line usually
  accompanies a reversal pattern. The lai-ger the pattern, the greater the significance. CI: When does a retest in the Right Shoudler take place? Br: A retest is always a retest of the climax whether it be a top or a bottom. CI: What are the conditions for a retest of a climax?
 Br: In a trending market there must be a rally. Market has a sharp turn down. New buyers start buying. CI: And the new buyers are not enthusiastic. Br: No, they are not. Declining volume and trading range confirm that. CI: When is the retest complete?
 Br: The retest is complete if the buyers falter within the 50% region of the climax retest and price turns sharply down. A retest does not require the trader to wait for a break of the previous low pivot point.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TRANSLATION PRACTICE
 New Concepts in Support and Resistance
 Fig. 1
 
 There is an understandable tendency to look to see kev horizontal support and resistance levels tested when they are reapproached. Many traders tend to set profit targets referenced to such levels, and stops also tend to be positioned relative to breaches of these levels. This is all verv well but disappointment often results as the key support and resistance levels in a structure aren't necessarily the isolated highs and lows. Thus very often the market will reverse just short of these levels, much to the fury of many traders who'd been counting the pennies before they were securely in the till! Consider the stylised bar chart in figure 1, areas (A) and (B) represent a two period reversal stmcture that is commonly seen in the markets. Taking the highlighted (A) area first, the bulls would have been well contented at the close of the period (close "C"). However, they were due for a shock, as whilst the market did push higher to begin with in the next period (sucking more weakly committed bulls in), by the close (close "D") there were a lot of unhappy and damaged traders around. The high of the first period "b" constitutes a much more potent resistance level when retested, than the actual isolated high of the structure marked "a". This is not to say that "a" won't be attacked, but time and again you'll find it's "b" where the real battle is fought, and where the subsequent reversal or Vocabulary
 to set targets - ставить цели
 ja fury - бешенство
 till - касса
 л to suck in - всасывать
 ou 'potent - сильный
 
 
 
 
 
 consolidation will be initiated. In the practical sense one could say "b" is more significant than "a" due to a greater degree of market confidence at "b", and it is almost certainly associated with higher volume. There is however another way of looking at it, which I call the "Concept of Maximum Bearishness/Bullishness".
 MAXIMUM BEARISHNESS/BULLISHNESS
 If in the first highlighted period of (A) the bulls had been
 totally in control, with the bears utterly routed, then the close of
 the period would have been at "b", the period high. One can
 look at this pullback from the high - the difference between "b"
 and "с" - as representing the ability of the bears to fight back.
 Similarly in the second oeriod of (A) the orice difference
 between "d" and "e" represents the ability of the bulls to fight
 back after being mauled. The way to evaluate which is the period of maximum bullish strength in any structure (which is where the bulls had maximum control) is to sweep back these differences (the pullback from the high) through the respective closes and compare the levels obtained. This is the concept of SWEEP and it is the period with the highest sweep level that constitutes maximum bullishness.
 The high of this maximum bullish period is a key resistance. I think it can be easily seen that reflecting "b"-"c"
 back through "c" gives a much higher level than reflecting "a"-"d" back through "d". Thus it's the first period of (A) and its high "b" that qualifies as the maximum bull point not point "a", despite it being higher. Note the maximum bull period may indeed be the one that includes the actual isolated high (area (D)
 is such an example).
 RESISTANCE LEVEL STRENGTH
 Price action as depicted in (A), being a two period bull
 reversal structure, needs to be viewed in light of the above if, or when, the market returns to the same level. There are a couple of tests that can be applied to make a judgement on how potent the resistance level "b" is likely to prove:
 1. Reflect the "sweep" movement of the price curve points
 "b"-"c" down through "c" and "d"-"t" up through "d". Do
 the two levels cross or are they able to "hold hands" as I term it?
 If they do not, it's a measure of how many people have been
 caught and how badly they've been caught. It is the pain and distress that materialises from a reversal level that directly and strongly influences how potent it will prove at a later time. If the reversal was violent, closing on or near the low of the period and thereby giving the majority in a bad position little or no time to get out, then "b" will return to "haunt" the market if the level is re-attained - pain is remembered even if only subconciosly!
 2. Look at the price action following the reversal period,
 did it make a fair job of re-tracing before going down again, or did the market just plummet? If it's the former then "b" won't be nearly so key a level than if we get a nose dive. Again it comes back to giving traders an opportunity to get out when wrong without a serious loss. Remember a violent one-way market means somebody somewhere is in distress! au to rout - разгромить
 
 
 
 
  о: to maul - калечить, бить
 
 
 
 
 
 
  to hold hands - занимать выжидательную политику
 
 
 
 
 
 
  e distress - горе