Forecastingexchangerate(国际金融香港大学,WONGKa.pptx

Forecasting exchange rate: part 1;If you are looking for a white or black, or black white cat, I am your perfect choice.;Content;A taste of technical analysis;Technical analysis;Three tenets of technical analysts;1. All market fundamentals are depicted in the actual market data. ;2. History repeats itself.;3. Prices move in trends ;The building blocks of any technical analysis system include;Some of the price charts used in technical analysis:;Head and Shoulders are a reversal pattern consisting of three price peaks, the middle being the largest. Its potential in the opposite direction is measured by the distance from top of middle (head) to the base (neckline). This price distance is extrapolated from neckline at the point of breakout.;Double tops and double bottoms are reversal patterns consisting of two peaks with a price valley. To confirm pattern, prices must form a pullback (decline below and close below previously established low). To predict move size, measure height from high to low and project under beltline (Vice versa for double bottom) ;Flags and pennants are continuation patterns, usually a pause in fast, or almost vertical, price movement. Flags are in the shape of a parallelogram, while pennants are very short triangles.;Broadening is a reversal pattern usually found at trend peaks rather than lows. ;Triangles can be continuation and reversal patterns, this usually determined by the direction which they point. Confirmation is at breakout, and the strongest signals are when breakout occurs between 1/2 and 3/4 the triangle length. Ascending triangles: bullish Descending triangles: bearish Symmetrical triangles: neutral ;Saucers are reversal patterns which are slow and rounding in form (at the end of a move). No clear breakout signals occur because it is so slow; no clear Support /Resistance areas are found either. This pattern can last a long time. Be on the lookout for any trending activity.;Gaps are areas in charts where no trading occur