Introduction to Analysis - Hummingbird Trading
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.6% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. 70.6% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.

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Intro to analysis

Hummingbird Trading intro to analysis

Making money trading requires analysing historical data in order to identify future trends. Although not an exact science, here are some of the more common trends you will see and how to act on them.

Moving Average

A moving average is a way to visualize a trend on a trading chart. The moving average is the sum of the X previous closing prices for a given time frame divided by X.

In the case of Hummingbird Trading, the default setting for a single moving average, averages the last 20 closing prices on the time frame.

You can add a moving average to your chart by tapping once on the screen.

Trade Hummingbird: Learn to trade - Moving Average

Second Moving Average

In order to identify entry and exit opportunities on a chart, traders will often add a second moving average, using a second trendline with additional closing prices. One of the most basic strategies is to act when the lines cross, which may indicate a reverse trend.

In the case of Hummingbird, the default setting for a second moving average is the last 50 closing prices.

You can add a second moving average to your chart by tapping a second time on the screen.

Trade Hummingbird: Learn to trade - Moving Average

Double Bottom

The rate will possibly go up after initially going downtrend and consecutively bottoming twice on the same level. A double bottom looks a bit like a W. The longer the time frame duration, the higher the probability that a trade on this chart will be succesful.

Suggested action: Buy

Trade Hummingbird: Learn to trade - Double Bottom

Head and Shoulders

The rate will possibly plunge after initially going uptrend and forming a head-and-shoulders pattern that is made up of the higher high point in the middle of two low points sided with two lower high points, the shoulders.

Suggested action: Sell

Trade Hummingbird: Learn to trade - Head and Shoulders

Inverse Head and Shoulders

An inverse head-and-shoulders pattern is simply the opposite of a regular head-and-shoulders. In this case, the rate may possibly rise.

Suggested action: Buy

Trade Hummingbird: Learn to trade - Inverse Head and Shoulders

Rising Wedge

The rate will possibly reverse directions and go down after appearing as a rising wedge-like shape regardless of the initial trend.

Suggested action: Sell

Trade Hummingbird: Learn to trade - Rising Wedge

Falling Wedge

The rate will possibly rise up after presenting a falling wedge-like shape regardless of the initial trend.

Suggested action: Sell

Trade Hummingbird: Learn to trade - Falling Wedge

Bearish Rectangle

The rate will possibly break the support level and continue to go down after initially going downtrend and fluctuating between the ceiling and floor for a while.

Suggested action: Sell

Trade Hummingbird: Learn to trade - Bearish Rectangle

Bullish Rectangle

The rate will possibly break through the ceiling and continue to move up after initially going downtrend and consolidating in a range for a while.

Suggested action: Buy

Trade Hummingbird: Learn to trade - Bullish Rectangle

Descending Triangle

The rate will possibly bounce off the support level by the same height as the vertical height of the triangle after soaring up and consolidating for a bit.

Suggested action: Sell

Trade Hummingbird: Learn to trade - Decending Triangle

Symmetrical Triangle

The rate will possibly go up after shortly consolidating confined by two converging trendlines.

Suggested action: Buy

Trade Hummingbird: Learn to trade - Symmetrical Triangle

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