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Название: Английский для дилеров системы Рейтер. English for Reuters Dealers

Автор: Ю.М. Зудин

Жанр: Учебники, лекции и словари

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Просмотров: 2768

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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.

 




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