January 2012 Analysis for Major Pairs and Constant Range Bars Charts Elements

AUD/USD – January Analysis:

On the daily chart AUD/USD had an impressive bullish volume on Tuesday, and has reached 1,037(200 DMA).This is an Important Key level for the trend reversal on daily chart.

Price could retrace to 1,015(Monthly Main Pivot) and then resume the bullish probability to reach 1,044(Monthly R1 Pivot confluence with the downtrendline) and to reverse the trend.The next bullish target would be 1,067(Monthly R2).

Downside probability could break Monthly Pivot and reach 0,992(Monthly S1 Pivot confluence with the uptrendline – Key Level).

- EUR/USD – January Analysis

On the Daily chart, we can see a Clear Downtrend, confirmed by the Main Simple Moving averages (30,50,100 and 200 DMA). The smaller downtrendline has been broken on Tuesday Morning, at the confluence with the Main Weekly Pivot (1,2961). Price has found resistence at 1,305(weekly R1 Pivot and Daily R3 Pivot).

Be careful for a False Breakout, even if volumes confirm the Breakout of the trendline. Bullish Probability finds the first resistence at Monthly Main pivot line(1,312) confluence with 30 DMA, then 1,329(bigger time frames uptrendline confluence with 50 DMA), 1,3383(Monthly R1, confluence with 61,8% Fibonacci retracement and maybe 100 DMA), and finally 1,371-1,381 area(38,2% Fibonacci confluence with 200 DMA and Monthly R2).

Bearish probability would return price under Weekly Pivot(1,2961) and take it to new lows under 1,285 support, to Monthly R1(1,2693) and 1,264 support, or even 1,243 Monthly R2.

Read the Rest of the analysis here…

CONSTANT RANGE BARS CHARTS. (Price Movement / Action – Volatility Charts)

Created in 1995, by a brazilian Trader, Vincent Nicolellis Jr., Constant Range Bars are also called “Momentum Bars”. They are standard Charts with Bars that have Open/ Close/ High/ Low and Volume, but they focus on Price Movement, eliminating the Time Factor.

The Range Bars charts have 3 rules:
- Bars have the same Lenght / Height / High-Low Range in Pips, Ticks or Money ($),
- The Close of the Range Bar is always at the High or Low of the Bar,
- The Opening of the next Range Bar is always one pip / tick, above or under the High or Low of the current Bar.

For example, let’s take a look at a 30 minutes chart on Eur/Usd and Compare it to a 10 Pips Constant Range Bars Chart in Dukascopy J-forex Contest Platform:
  

- You can clearly see that we have a smaller number of Bars on the second chart, then the first one for the same period, and the same price action.
- If the Range of the Price Movement is smaller than the Constant Bars Lenght (ex: 10 pips), another bar will not be generated until the price range will be broken upside or downside.
- Gaps can be filled with Phantom Range Bars (not on J-forex Platform).
- Time is relative for a Constant Range Bar (it varies until the range of the bar is broken).
- You can Predict the High / Low / Open / Close of the Next Bar.
- If your trading Platform Permits, You can choose the Range of the bars in Pips, ticks or Money ($).
- Trendlines and channels seem to be built for range Bars Charts.
- Trends and trend reversal are easier to detect on Range Bars Charts.
- All the Range Bars have the same Size.
- Technical Analysis is also effective in Range Bars Charts.
- You can use Stop Orders (Conditional Orders) to enter the Market, placed at the top or low of the Bar.
- Money Management and Risk Management also Apply.
- Range Bars avoid to show some of the False Signals present in a choppy, noise Market, in the time based Charts.
- Volumes are better correlated with Price because You can clearly see the accumulation of strenght in the Price Range Bar.

Read the rest of the Article HERE…

To Your Success,

Doctortyby