Tips and Tools for Future Market Trading and Investment TECHNICAL ANALYSIS DCX Nepal Derivative and Commodity Exchange Nepal Ltd.

Introduction  Technical analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting future trends.  The term “market action” includes the three principal sources of information available to the technicians; o Price o Volume o Open Interest Technical analysis is a method of evaluating the market/s or market instrument/s by analyzing the statistics generated by market activity, such as past prices and volume.

Assumptions There are three premises on which the technical approach is based:  Market action discounts everything  Prices move in trends  History repeats itself

Trend Analysis One of the most important concepts in technical analysis is that of trend. Trend is Your Friend

Trend  In a general sense, the trend is simply the direction of the market, which way it’s moving.  It is direction of those peaks and troughs that constitutes market trend.  The fact of the market is that markets actually move in three directions –up, down, and sideways.  There are three decisions confronting the trader- whether to buy a market, sell a market, or don nothing (stand aside).

Trend Classifications  Major trend : Long term trend, Dow theory, for example, classifies the major trend as being in effect for long than a year.  Intermediate trend or secondary trend as three weeks to as many months.  Near term trend is usually defined as anything less than two or three weeks.

Support and Resistance levels in Uptrend

Support and Resistance in a Downtrend

RULE OF THUMB Two important sayings in technical analysis are "the trend is your friend" and "don't buck the trend," illustrating how important trend analysis is for technical traders.

Tops and Buttons

Double Top

Double Bottom

Pivot Points A technical indicator calculated using a financial instrument’s high, low and close values. These values are usually taken from the previous day’s trading range. Pivot = (High+Low+Close)/3 Pivot = (Open+High+Low+Close)/4

Why use pivot Points ? A. Determine support and resistance B. Easy to calculate C. Can be used for stocks, forex and Commodities D. Can be extremely accurate E. A leading / Predictive indicator

How are Pivot Points Different ? A. Most indicator are lagging B. Use old data to assign a value to current price action C. Pivot points use the previous day’s D. Trading range to project where price is likely to trade

Different Methods :  Camarilla  Demark  Woodies  Fibonacci Most Common Method :  5 Point System

The Maths 19 1R = P + (P -L) 1S = P - (H -P) 2R = P + Range 2S = P-Range 3R = 1R + Range 3S = 1S - Range

Questions and Answers Open Discussion

Contact Details Welcome to the financial world Derivative and Commodity Exchange Nepal Ltd. Mid Baneshwor, Kathmandu Phone: /

DCX Nepal Your Trading Bank Happy Hunting !!!!!!!!! Happy Trade !!!!!!!!!

Thank You !!! Investment Test (Should appear circular) 16x9 4x3 If you can see it, You can Do it