An Introduction - TA beginner complete
Technical Analysis
An Introduction
Prepared by Research Team
eTrading Securities
1
FUNDAMENTAL VS TECHNICAL
FUNDAMENTAL:
• KINERJA
PERUSAHAAN
• INDUSTRI
• KONDISI MAKRO
• KONDISI MIKRO
TECHNICAL:
• HISTORICAL PRICE
• PATTERN
• INDICATOR
Candle Stick
CHART
• LINE CHART
• BAR CHART
• CANDLE STICK CHART
LINE CHART
BAR CHART
CANDLE STICK
TA Assumptions
•
Price always moving in the trend
“a good investor’s stay ahead of a curve”
”Trend is your Friend, do not fight it”
Change in Trend
Support
The price level which,
historically, a stock had
a difculty falling
below. It is thought of
as the level at which a
lot buyers tend to enter
the stock.
Resistance
The price which a stock
or market can be
traded, but not exceed,
for a certain period
time
Types of Trend Line
Minor
Trend Line
Major
Trend Line
Intermediate
Trend Line
Major trends –6 months s/d 2 years
Intermediate Trends – 3 weeks s/d 6 months
Minor Trends –1 s/d 3 weeks
Market Stages
Trend line
UPTREND
DOWNTREND
SIDEWAYS TREND
UpTrend
DownTrend
SideWays
Candle Stick
BENTUK BENTUK CANDLE STICK
Bullish Candlestick
Engulfing: This pattern consists of two candles. The first day is a narrow range candle that closes down for the day. The
sellers are still in control of the stock but because it is a narrow range candle and volatility is low, the sellers are not very
aggressive. The second day is a wide range candle that “engulfs” the body of the first candle and closes near the top of
the range. The buyers have overwhelmed the sellers (demand is greater than supply). Buyers are ready to take control of
this stock!
Hammer: The stock opened, then at some point the sellers took control of the stock and pushed it lower. By the end of
the day, the buyers won and had enough strength to close the stock at the top of the range. Hammers can develop after a
cluster of stop loss orders are hit. That’s when professional traders come in to grab shares at a lower price.
Harami: When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. On
the first day you see a wide range candle that closes near the bottom of the range. The sellers are still in control of this
stock. Then on the second day, there is only a narrow range candle that closes up for the day. Note: Do not confuse this
pattern with the engulfing pattern. The candles are opposite!
Piercing: This is also a two-candle reversal pattern where on the first day you see a wide range candle that closes near
the bottom of the range. The sellers are in control. On the second day you see a wide range candle that has to close at
least halfway into the prior candle. Those that shorted the stock on first day are now sitting at a loss on the rally that
happens on the second day. This can set up a powerful reversal.
Doji: The doji is probably the most popular candlestick pattern. The stock opens up and goes nowhere throughout the
day and closes right at or near the opening price. Quite simply, it represents indecision and causes traders to question the
current trend. This can often trigger reversals in the opposite direction.
Bearish Candlestick
Engulfing: This pattern consists of two candles. The first day is a narrow range candle that closes down for the day. The
buyer are still in control of the stock but because it is a narrow range candle and volatility is low, the sellers are not very
aggressive. The second day is a wide range candle that “engulfs” the body of the first candle and closes near the top of
the range. The sellers have overwhelmed the buyers (supply is greater than demand). Sellers are ready to take control of
this stock!
Shooting Star: The stock opened, then at some point the buyers took control of the stock and pushed it higher. By the
end of the day, the sellers won and had enough strength to close the stock at the low of the range..
Harami: When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. On
the first day you see a wide range candle that closes near the top of the range. The buyers are still in control of this stock.
Then on the second day, there is only a narrow range candle that closes down for the day.
Piercing: This is also a two-candle reversal pattern where on the first day you see a wide range candle that closes near
the bottom of the range. The buyers are in control. On the second day you see a wide range candle that has to close at
least halfway into the prior candle.
Doji: The doji is probably the most popular candlestick pattern. The stock opens up and goes nowhere throughout the
day and closes right at or near the opening price. Quite simply, it represents indecision and causes traders to question the
current trend. This can often trigger reversals in the opposite direction.
•
PRICE PATTERN
Teknikal analysis tidak mempercayai harga bergerak secara acak,
namun bergerak dalam pola (pattern) tertentu, biasanya teknikal analisis
mengelompokan pola ini sbb:
REVERSAL:
- HEAD AND SHOULDER vs INVERTED
- DOUBLE TOP vs DOUBLE BOTTOM
CONTINUATION:
- TRIANGLE: ASCENDING vs DESCENDING
- FLAG
- RECTANGLES
- WEGDES
REVERSAL PATTERN
Head and Shoulder
Inverted Head and Shoulder
Double Bottom
Double Top
CONTINUATION PATTERN
Ascending Triangle
Descending Triangle
Symmetrical Triangles
Flag and Pennant
Rectangles
Wedges
Modern Technical Analysis
Bollinger Band
•
BB determines
trends and signal.
•
Bullish
Confirmation If
curve stays in
upper band zone
•
Bearish
Confirmation If
curve stays in
lower band zone
Modern Technical Analysis
Bollinger Band
BB signals:
•
If curve move above
upper band line,
normally it should have
correction to came back
at upper band zone
•
If curve move below
lower line, in bearish
period it shall move back
in to lower zone.
Bollinger Band is best used combined with stochastic to determine decisions
Modern Technical Analysis
Indikator Stochastic Oscillator (Stochastic-S)
•
Stochastic is a lagging
indicator to show
oversold/overbought.
•
Bullish Confirmation
when %K Stochastic
(grey line) crosses
from below the %D
(red line) in less than
20% line (oversold)
•
Bearish Confirmation
when %K Stochastic
crosses from above
the %D in over than
80% line (overbought)
Relative Strength Index (RSI)
Relative strength index (RSI) is an oscillator that measure current price strength
in relation to previous prices. RSI is a versatile tool, it can be used to;
•Generate BUY and SELL signal
•Show Overbought and Oversold condition
•Confirm price movement
•Warn to potencial price reversals through divergence
RSI Buy signal
Buy when RSI crossing oversold line (30)
RSI Sell Signal
Sell when RSI crossing overbought line (70)
Note: The period RSI usually use is 14 days
SELL
BUY
Momentum Indicator
Momentum indicator is the basic application in technical analysis. Momentum
indicator calculate the speed in changing price to actual price. To get the signal
more clear, use 12 days period for momentum indicator. Momentum indicator do
not give overbought and oversold area, but only give one indicator that is 100
line.
Momentum BUY signal
Buy when momentum line below 100 line, and crossing up signal line.
Momentum SELL signal
Sell when momentum signal is turning back and crossing down to 100 line
again.
Note: Using 12 – days period
SELL
BUY
Average Directional Index – ADX
ADX Line shows the power from trend. If this line above the normal line (25),
then there is an implication that the trend will confirmed . ADX Line usually used
with DI lines. DI lines give confirmation if the positive line above negative line
Note: ADX usually use 14 days period. Bear in mind that increasing the number
of periods will smooth the ADX line (making it less volatile), and display more
significant readings. The readings, however, will present more of a lag .
Example: using 20 days ADX line will smooth the trend but the signal
will lagging maybe if we use the smaller period the signal will be seen
BUY SIGNAL
: ADX Line
: Positive Directional Index
: Negative Directional Index
MACD & MACD Histogram
SELL
BUY
BUY
SELL
Moving Average Convergence/Divergence is the indicator that can give the
information for the changing in the trend. BUY signal is triggered when there is a
crossing from below MACD line with Signal line . SELL signal is triggered when
MACD line cross Signal line from above.
MACD Histogram have the same movement MACD, but with the different picture.
Please observe the blue circle, uptrend can be confirmed when MACD line do
the crossing and MACD Histogram move above 0 line. Different with the red
circle, when downtrend can be confirmed when with the crossing in MACD line
and MACD histogram move below to 0 line.
Note :MACD indicator is the lagging indicator(lagging indicator).
Period thea usually use is short time period 12, untuk long time period 26 dan
signal period 9
Moving Average
Moving Average is 1 of the simple indicator that can be used for trader or
investor in pointing BUY or Sell, and can be used for pointing support and
resistance
There is two way using moving average, that is:
1. Single Moving Average
2. Double Moving Average
Single Moving Average
As seen in picture where we can use Moving Average (MA) 50 for indicate
support and resistance, but can also indicate Buy and Sell
In using this indicator we do not follow the minor trend but we follow the major
trend. We buy when candlestick cross over MA 50 or when the candle is above
MA 50 and sell when the candlestick below MA 50
Note: when using moving average as support it depend from investor, whether
short term or long term. for short term usually use 10 or 20 days.
for medium term usually us 50-60 days
For long term usually use 200 days
Double Moving Average
In this chart we use 2 Moving Average (MA) that is MA 10 and MA 20,
usually trade use for BUY and SELL. In this case we buy when MA 50
crossing above MA 20 line usually called Golden Cross and sell when
MA 10 crossing below MA 20 line usually called Death Cross
This indicator usually used with stochastic to give the stronger
indicator.
Note: usually use10-20 or 10-50 or 20-50 or 50-200. the longer the
time frame, the longer our investing strategy
Williams %R
BUY
SELL
BUY
SELL
BUY
SELL
Developed by Larry Williams, Williams %R is a momentum indicator that works
much like the Stochastic Oscillator. It is especially popular for measuring
overbought and oversold levels. The scale ranges from 0 to -100 with readings
from 0 to -20 considered overbought, and readings from -80 to -100 considered
oversold.
William %R, sometimes referred to as %R, shows the relationship of the close
relative to the high-low range over a set period of time. The nearer the close is to
the top of the range, the nearer to zero (higher) the indicator will be. The nearer the
close is to the bottom of the range, the nearer to -100 (lower) the indicator will be. If
the close equals the high of the high-low range, then the indicator will show 0 (the
highest reading). If the close equals the low of the high-low range, then the result
will be -100 (the lowest reading)
NOTE: the reading in HOTS system is reversed
Typically, Williams %R is calculated using 14 periods and can be used on
intraday, daily, weekly or monthly data. The time frame and number of periods
will likely vary according to desired sensitivity and the characteristics of the
individual security.
Thank You
An Introduction
Prepared by Research Team
eTrading Securities
1
FUNDAMENTAL VS TECHNICAL
FUNDAMENTAL:
• KINERJA
PERUSAHAAN
• INDUSTRI
• KONDISI MAKRO
• KONDISI MIKRO
TECHNICAL:
• HISTORICAL PRICE
• PATTERN
• INDICATOR
Candle Stick
CHART
• LINE CHART
• BAR CHART
• CANDLE STICK CHART
LINE CHART
BAR CHART
CANDLE STICK
TA Assumptions
•
Price always moving in the trend
“a good investor’s stay ahead of a curve”
”Trend is your Friend, do not fight it”
Change in Trend
Support
The price level which,
historically, a stock had
a difculty falling
below. It is thought of
as the level at which a
lot buyers tend to enter
the stock.
Resistance
The price which a stock
or market can be
traded, but not exceed,
for a certain period
time
Types of Trend Line
Minor
Trend Line
Major
Trend Line
Intermediate
Trend Line
Major trends –6 months s/d 2 years
Intermediate Trends – 3 weeks s/d 6 months
Minor Trends –1 s/d 3 weeks
Market Stages
Trend line
UPTREND
DOWNTREND
SIDEWAYS TREND
UpTrend
DownTrend
SideWays
Candle Stick
BENTUK BENTUK CANDLE STICK
Bullish Candlestick
Engulfing: This pattern consists of two candles. The first day is a narrow range candle that closes down for the day. The
sellers are still in control of the stock but because it is a narrow range candle and volatility is low, the sellers are not very
aggressive. The second day is a wide range candle that “engulfs” the body of the first candle and closes near the top of
the range. The buyers have overwhelmed the sellers (demand is greater than supply). Buyers are ready to take control of
this stock!
Hammer: The stock opened, then at some point the sellers took control of the stock and pushed it lower. By the end of
the day, the buyers won and had enough strength to close the stock at the top of the range. Hammers can develop after a
cluster of stop loss orders are hit. That’s when professional traders come in to grab shares at a lower price.
Harami: When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. On
the first day you see a wide range candle that closes near the bottom of the range. The sellers are still in control of this
stock. Then on the second day, there is only a narrow range candle that closes up for the day. Note: Do not confuse this
pattern with the engulfing pattern. The candles are opposite!
Piercing: This is also a two-candle reversal pattern where on the first day you see a wide range candle that closes near
the bottom of the range. The sellers are in control. On the second day you see a wide range candle that has to close at
least halfway into the prior candle. Those that shorted the stock on first day are now sitting at a loss on the rally that
happens on the second day. This can set up a powerful reversal.
Doji: The doji is probably the most popular candlestick pattern. The stock opens up and goes nowhere throughout the
day and closes right at or near the opening price. Quite simply, it represents indecision and causes traders to question the
current trend. This can often trigger reversals in the opposite direction.
Bearish Candlestick
Engulfing: This pattern consists of two candles. The first day is a narrow range candle that closes down for the day. The
buyer are still in control of the stock but because it is a narrow range candle and volatility is low, the sellers are not very
aggressive. The second day is a wide range candle that “engulfs” the body of the first candle and closes near the top of
the range. The sellers have overwhelmed the buyers (supply is greater than demand). Sellers are ready to take control of
this stock!
Shooting Star: The stock opened, then at some point the buyers took control of the stock and pushed it higher. By the
end of the day, the sellers won and had enough strength to close the stock at the low of the range..
Harami: When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. On
the first day you see a wide range candle that closes near the top of the range. The buyers are still in control of this stock.
Then on the second day, there is only a narrow range candle that closes down for the day.
Piercing: This is also a two-candle reversal pattern where on the first day you see a wide range candle that closes near
the bottom of the range. The buyers are in control. On the second day you see a wide range candle that has to close at
least halfway into the prior candle.
Doji: The doji is probably the most popular candlestick pattern. The stock opens up and goes nowhere throughout the
day and closes right at or near the opening price. Quite simply, it represents indecision and causes traders to question the
current trend. This can often trigger reversals in the opposite direction.
•
PRICE PATTERN
Teknikal analysis tidak mempercayai harga bergerak secara acak,
namun bergerak dalam pola (pattern) tertentu, biasanya teknikal analisis
mengelompokan pola ini sbb:
REVERSAL:
- HEAD AND SHOULDER vs INVERTED
- DOUBLE TOP vs DOUBLE BOTTOM
CONTINUATION:
- TRIANGLE: ASCENDING vs DESCENDING
- FLAG
- RECTANGLES
- WEGDES
REVERSAL PATTERN
Head and Shoulder
Inverted Head and Shoulder
Double Bottom
Double Top
CONTINUATION PATTERN
Ascending Triangle
Descending Triangle
Symmetrical Triangles
Flag and Pennant
Rectangles
Wedges
Modern Technical Analysis
Bollinger Band
•
BB determines
trends and signal.
•
Bullish
Confirmation If
curve stays in
upper band zone
•
Bearish
Confirmation If
curve stays in
lower band zone
Modern Technical Analysis
Bollinger Band
BB signals:
•
If curve move above
upper band line,
normally it should have
correction to came back
at upper band zone
•
If curve move below
lower line, in bearish
period it shall move back
in to lower zone.
Bollinger Band is best used combined with stochastic to determine decisions
Modern Technical Analysis
Indikator Stochastic Oscillator (Stochastic-S)
•
Stochastic is a lagging
indicator to show
oversold/overbought.
•
Bullish Confirmation
when %K Stochastic
(grey line) crosses
from below the %D
(red line) in less than
20% line (oversold)
•
Bearish Confirmation
when %K Stochastic
crosses from above
the %D in over than
80% line (overbought)
Relative Strength Index (RSI)
Relative strength index (RSI) is an oscillator that measure current price strength
in relation to previous prices. RSI is a versatile tool, it can be used to;
•Generate BUY and SELL signal
•Show Overbought and Oversold condition
•Confirm price movement
•Warn to potencial price reversals through divergence
RSI Buy signal
Buy when RSI crossing oversold line (30)
RSI Sell Signal
Sell when RSI crossing overbought line (70)
Note: The period RSI usually use is 14 days
SELL
BUY
Momentum Indicator
Momentum indicator is the basic application in technical analysis. Momentum
indicator calculate the speed in changing price to actual price. To get the signal
more clear, use 12 days period for momentum indicator. Momentum indicator do
not give overbought and oversold area, but only give one indicator that is 100
line.
Momentum BUY signal
Buy when momentum line below 100 line, and crossing up signal line.
Momentum SELL signal
Sell when momentum signal is turning back and crossing down to 100 line
again.
Note: Using 12 – days period
SELL
BUY
Average Directional Index – ADX
ADX Line shows the power from trend. If this line above the normal line (25),
then there is an implication that the trend will confirmed . ADX Line usually used
with DI lines. DI lines give confirmation if the positive line above negative line
Note: ADX usually use 14 days period. Bear in mind that increasing the number
of periods will smooth the ADX line (making it less volatile), and display more
significant readings. The readings, however, will present more of a lag .
Example: using 20 days ADX line will smooth the trend but the signal
will lagging maybe if we use the smaller period the signal will be seen
BUY SIGNAL
: ADX Line
: Positive Directional Index
: Negative Directional Index
MACD & MACD Histogram
SELL
BUY
BUY
SELL
Moving Average Convergence/Divergence is the indicator that can give the
information for the changing in the trend. BUY signal is triggered when there is a
crossing from below MACD line with Signal line . SELL signal is triggered when
MACD line cross Signal line from above.
MACD Histogram have the same movement MACD, but with the different picture.
Please observe the blue circle, uptrend can be confirmed when MACD line do
the crossing and MACD Histogram move above 0 line. Different with the red
circle, when downtrend can be confirmed when with the crossing in MACD line
and MACD histogram move below to 0 line.
Note :MACD indicator is the lagging indicator(lagging indicator).
Period thea usually use is short time period 12, untuk long time period 26 dan
signal period 9
Moving Average
Moving Average is 1 of the simple indicator that can be used for trader or
investor in pointing BUY or Sell, and can be used for pointing support and
resistance
There is two way using moving average, that is:
1. Single Moving Average
2. Double Moving Average
Single Moving Average
As seen in picture where we can use Moving Average (MA) 50 for indicate
support and resistance, but can also indicate Buy and Sell
In using this indicator we do not follow the minor trend but we follow the major
trend. We buy when candlestick cross over MA 50 or when the candle is above
MA 50 and sell when the candlestick below MA 50
Note: when using moving average as support it depend from investor, whether
short term or long term. for short term usually use 10 or 20 days.
for medium term usually us 50-60 days
For long term usually use 200 days
Double Moving Average
In this chart we use 2 Moving Average (MA) that is MA 10 and MA 20,
usually trade use for BUY and SELL. In this case we buy when MA 50
crossing above MA 20 line usually called Golden Cross and sell when
MA 10 crossing below MA 20 line usually called Death Cross
This indicator usually used with stochastic to give the stronger
indicator.
Note: usually use10-20 or 10-50 or 20-50 or 50-200. the longer the
time frame, the longer our investing strategy
Williams %R
BUY
SELL
BUY
SELL
BUY
SELL
Developed by Larry Williams, Williams %R is a momentum indicator that works
much like the Stochastic Oscillator. It is especially popular for measuring
overbought and oversold levels. The scale ranges from 0 to -100 with readings
from 0 to -20 considered overbought, and readings from -80 to -100 considered
oversold.
William %R, sometimes referred to as %R, shows the relationship of the close
relative to the high-low range over a set period of time. The nearer the close is to
the top of the range, the nearer to zero (higher) the indicator will be. The nearer the
close is to the bottom of the range, the nearer to -100 (lower) the indicator will be. If
the close equals the high of the high-low range, then the indicator will show 0 (the
highest reading). If the close equals the low of the high-low range, then the result
will be -100 (the lowest reading)
NOTE: the reading in HOTS system is reversed
Typically, Williams %R is calculated using 14 periods and can be used on
intraday, daily, weekly or monthly data. The time frame and number of periods
will likely vary according to desired sensitivity and the characteristics of the
individual security.
Thank You