In finance, a derivative represents a contract deriving its value from the performance of an underlying entity. In a nutshell, derivatives are agreements between buyers and sellers. Derivatives specify a future price at which an asset can be sold, known as the underlier. This could be a physical commodity, such as corn, wheat or natural … Continue reading What Are Derivatives: An Introduction
Tag: financial markets
A Primer to Understanding Basic Chart Patterns
Do technical trading patterns exist and are they profitable? This is a question often asked by new traders. Depending on who you ask, the response will differ. Some academics and investors believe patterns don’t exist – that price action is entirely random, whereas the majority of technical analysts are adamant chart patterns exist and are … Continue reading A Primer to Understanding Basic Chart Patterns
Trading the Head and Shoulders Chart Pattern
Technical analysis is an efficient technique used to study price movements of financial markets, with its findings forming a credible guide to future market direction. One of the most well-known chart patterns is the head and shoulders formation, boasting not only high profitability, but also distinct rules for its assembly. Although considered a high-probability pattern, … Continue reading Trading the Head and Shoulders Chart Pattern
The Dow Theory: How It Can Help Traders Navigate the Markets
Considered by many as the father of technical analysis, Charles Henry Dow was the first to create an index measuring the overall price movement of US stocks. Founded in 1896, the Dow Jones Industrial Average took its name from Dow and statistician Edward Jones. The index was a way for Dow and Jones to report … Continue reading The Dow Theory: How It Can Help Traders Navigate the Markets
An Introduction to MetaTrader 4 Indicators
Technical analysis requires the use of various tools, and is often associated with the application of indicators. The award-winning MetaTrader 4 (MT4) platform offers an extensive selection of technical indicators. It is one of the most popular trading platforms for forex traders, owing to its ease of use, generous features and automated trading ability. What’s … Continue reading An Introduction to MetaTrader 4 Indicators