Vol.

1 2021

A1 Trading Free Education PDF

TECHNICAL

ANALYSIS
In This Issue:

Technical Analysis is a trading discipline

employed to evaluate investments and identify
trading opportunities by analyzing statistical
trends gathered from trading activity, such as
price movement and volume.

A1 Trading Technical Analysis

TECHNICAL ANALYSIS 01

01 SUPPORT AND
RESISTNCE 16 MACD INDICATOR
video: two best methods for
video: mastering support and
moving averages
resistance zones

19 CANDLESTICK
05 TRENDLINES PATTERN BASICS
video: how to trade forex
video: how to trade
using trendlines
candlestick patterns
video: mastering trendlines for successfully
pullbacks and breakouts video: tops and bottoms
reversal candles

09 MOVING AVERAGES
22 ENGULFING
video: two best methods for
moving averages CANDLESTICK
PATTERN
video: how to trade
candlestick patterns
13 RELATIVE successfully
STRENGTH INDEX
22 PINBAR
CANDLESTICK
video: how to trade the rsi
profitably PATTERN
video: rsi divergence trading video: mt4 tool for finding
explained price action signals
TECHNICAL ANALYSIS 02

25 DOJI CANDLESTICK
PATTERN 38 HEAD AND
SHOULDERS
video: how to trade PATTERN
candlestick patterns video: Simple Forex Trading
successfully Strategy: 50+ Pips a Day with
this One Pattern

28 HAMMER
31 BULL FLAG
CANDLESTICK
PATTERN
PATTERN
video: Forex Trading:
video: how to trade +$191.01 on EURJPY Trading
candlestick patterns a Bull Flag Pattern!
successfully
31 BREAKOUT
44 WEDGE PATTERN /
TRADING
RISING & FALLING
video: breakout trading
strategy: How to Trade Forex WEDGE PATTERN
Breakouts like a Pro! video: FREE Price Action
Mastery Course: How to Trade
video: Forex Trading Strategy:
the Wedge Pattern
2 Ways to Trade Breakouts!

47 BUILDING A
34 REVERSAL TRADING TECHNICAL BIAS
video: What is the Most
video: How to Trade Forex Profitable Forex Strategy?
Reversals: Evidence a Trend Technical Analysis vs.
Might be Ending! Fundamentals

video: Price Action Strategy:

How to Find Reversal Points in
Forex!
 Technical Analysis

Support and Resistance

To most investors/traders, support

and resistance levels are the number 1
most commonly used price action tool
for gauging when to enter and exit
trades. It is also one of the easiest
indicators to see even without having
to put much effort into spotting them
on a chart.

BIG IDEA

A1 Trading Financial Education Page 01

Technical Analysis

Support and Resistance

Support Zones

Support zones, by definition, are areas or price points that act as a

level of demand for buyers. In other words, when the price of a certain
pair/stock/crypto comes down to touch a level of support, it is an
incentive for buyers to step in for the chance of price recovering to the
upside. An important thing to note: if this indicator is easy to spot,
then it is likely that most traders will spot the same thing, and that will
make your trades more accurate in both the short and long term.

Resistance Levels

Resistance levels, however, work in the same way, just vice versa. A
recurring themeto
100 Things in Do
business and economics is supply and demand.
at ACHS
Support acts as a level of demand for buyers to want to get in while
resistance acts as a level of supply. Basically, it means there is less
demand for this pair at a higher price (the trade looked more
attractive at a lower price). This also means that a level of resistance
will be hard to beak and could cause price to fall back to support.
Although any kind of indicator isn’t 100% accurate, support and
resistance is still a great way to gauge entries and exits.

A1 Trading Financial Education Page 02

Technical Analysis

Support and Resistance

EUR/USD

Here is a picture of a chart of the EUR/USD pair on the 4H timeframe. You can see
the lines that act as support are marked in green and the zones of resistance are
marked in red. On the green areas of demand, you can see how price fell to that
level before bouncing back up. This doesn’t always happen, but more often than
not, you can find that they do work. And the same thing applies to resistance levels.
On that area marked in red, you can tell that the most recent candles on this chart
are testing the area that it couldn’t break the first time. Notice how these candles
never bounce or retrace at an exact level but around the same area. Lots of traders
try to pick perfect entries which usually come with a tight stop loss, so most of the
trades end up not working out for them. The trading world isn’t a perfect one, so
it’s better to use tools like this to help find a good area to enter after doing
considerable fundamental analysis as well. With enough practice, trading support
and resistance can end up being very beneficial to you and your account. And as
usual, practice minimizing risk to protect your account.

A1 Trading Financial Education Page 03

 KEY
TAKEAWAYS

01
SUPPORT LEVELS ACT AS AREAS
OF DEMAND

02
RESISTANCE LEVELS ACT AS
AREAS OF SUPPLY

03
ONE OF THE MOST COMMONLY
USED TOOLS IN TRADING IS
SUPPORT AND RESISTANCE

04
THERE ISN’T A PERFECT WAY TO
TRADE, BUT THESE SETUPS HELP

05
PRACTICE RISK MANAGEMENT
TO PROTECT YOUR ACCOUNT!

A1 Trading Financial Education Page 04

 Technical Analysis

Trendlines

Trendlines are another commonly used tool to help

traders spot wedges or channels in price action. Trendlines
are straight lines that connect one point to another to help
investors see where channels form and whether price is
nearing a breakout or if it is stuck in consolidation. The
way some traders draw these lines can vary from the way
others do, so it is mostly subjective which can cause
discrepancies in price action. Some traders may even argue
that trendlines do not work solely for that reason; but like
support and resistance levels, trendlines are used for
investors to consider certain areas or zones on where to
place their trades.

BIG IDEA

A1 Trading Financial Education Page 05

Technical Analysis

Trendlines

What traders are mainly looking for is a general area to long or

short certain pairs/stocks/crypto based on the overall trend. That
way, you can get a near-perfect entry and considerable probability
of success in whatever direction you are trading in. For example, if
you were bullish on the SPX500, but see that it is in an uptrend,
you might want to buy when price comes down to or around its
trend line.

SPX500

This is a chart of SPX500 on the 1D chart. You can see that a blue,
supportive trendline connects all the dips in price on the uptrend.
In this case, price is moving in an uptrend, so price comes down
only to reach new highs. The red line shows areas of tops where
traders take a break by holding, closing or even shorting at those
levels so they can buy in again. An upward trend that looks like a
staircase such as this example is a healthy move whereas a
parabolic jump in price is not. The importance of noticing this
trend will help you see when a trade looks safer than a sudden,
dramatic jump.

A1 Trading Financial Education Page 06

Technical Analysis

Trendlines

EURNZD

Here is another example of trend lines in action. You can see that
this pair has been trading sideways for some time creating its own
highs and lows where each crest and trough sit at around the same
level each time. Price finds support at the same price as the last
low, and it retraces at the same levels of resistance. These
sideways channels are usually areas of consolidation before big
moves. And at some point, price will eventually break out, but for
the time being, the trend will stay relatively strong.

A1 Trading Financial Education Page 07

 KEY
TAKEAWAYS

01
A TREND LINE IS A LINE THAT
CONNECTS TWO OR MORE
POINTS ON CHART TO SHOW THE
OVERALL DIRECTION OF PRICE
ACTION AS WELL AS THE
RELATIVE BOUNDARIES IN
WHICH PRICE TRADES

02
THERE CAN BE AN UPTREND,
DOWNTREND OR SIDEWAYS
TREND

03
TREND LINES ARE SUBJECTIVE,
SO THERE IS NO SUCH THING AS
A PERFECT WAY TO DRAW THEM

04
TREND LINES ARE WAYS FOR
TRADERS TO SPOT DIRECTION
AND TRADE IN THAT DIRECTION

A1 Trading Financial Education Page 08

 Technical Analysis

Moving Averages

Moving averages are basically a collection of data

points where price has been before and the average of
those data points. This helps suggest the general
trend of price action, and it can also be used as
support or resistance. Any break in either direction
could signal continued selling or buying. The
different kinds of moving averages are called simple,
cumulative and weighted. Traders use these various
moving averages according to the type of data they
would like to look at. Two main strategies traders use
with moving averages is trend following and mean
reversion.

BIG IDEA

A1 Trading Financial Education Page 09

Technical Analysis

Moving Averages

Think of price action like a rubber band and the moving

average is the center. If price stretches too far in either direction,
the stronger the pull, and eventually, price will return to “normal”
levels. Although not always 100% accurate, moving averages help
the trader see what’s going on with price action and whether or
not to be bullish or bearish in the short/long term.

EURUSD

This chart shows a 200 period simple moving average on the 15

minute timeframe. The red line moving through the middle of the
chart is the moving average. You can see that price oscillates
around the moving average; when price moves too high above, it
eventually comes back down. When price dips under, it finds its
way back up. This is a form of mean reversion, or finding a trend
reversal.

A1 Trading Financial Education Page 10

Technical Analysis

Moving Averages

CADJPY

Here is a different example of moving averages where we would

trade the trend. This chart shows how obedient price is to the
moving average and catching support at that level. Each time price
tags that level, it acts as a trampoline and bounces off and
continues the uptrend here.

A1 Trading Financial Education Page 11

 KEY
TAKEAWAYS

01
A MOVING AVERAGE IS A
COLLECTION OF DATA POINTS
THAT TAKE THE AVERAGE OF
WHERE PRICE HAS BEEN BEFORE

02
TRADERS LIKE TO USE MOVING
AVERAGES FOR MEAN
REVERSION AND TREND
FOLLOWING

03
PRICE CAN ACT LIKE A RUBBER
BAND AROUND MOVING
AVERAGES

04
THEY CAN BE USED TO GAUGE
THE SHORT OR LONG TERM
TRENDS OF ANY KIND OF
MARKET

A1 Trading Financial Education Page 12

 Technical Analysis

Relative Strength Index

Relative Strength Index or RSI is a good tool to

measure whether or not price is overbought or oversold.
An RSI scale will show a chart labeled 1-100, where 30
and below is oversold, and 70 and above is considered
overbought. It works as a data average of whatever the
time period is and measures the current price relative to
the average of the previous prices. For example, a 14-
day moving average measures the relative strength or
weakness within those 14 days and places the current
price on the scale from 1-100. If the point dips to 30,
investors might want to look at buying. If the point
comes up over 70, investors might look to sell.

BIG IDEA

A1 Trading Financial Education Page 13

Technical Analysis

Relative Strength Index

CADJPY

This chart shows the price of CADJPY on the top and the 14-4 Hour
Period Relative Strength Index on the bottom. As you can see, there are
several points where the chart hits above or below the purple area.
Anything within that zone is the “normal level” of where price could be.
The part in gray represents where price is overbought or oversold.
When price dipped to 30 on that first blue line, CADJPY entered into a
short term uptrend. When the price rose to 70, the pair came back
down.
This tool is very helpful in buy-the-dip or short-the-top
opportunities, but they are not always correct. You can also see that
those two overbought areas on the chart marked above 70 twice, but
price continued to rise. Just as any trading tool, RSI should be used to
estimate potential entries. In this instance, it would have been better to
buy the dips rather than shorting when the pair moved too high
according to the 14-Period RSI tool.
A1 Trading Financial Education Page 14
 KEY
TAKEAWAYS

01
RSI MEASURES THE RELATIVE
STRENGTH OR WEAKNESS OF AN
INDIVIDUAL
PAIR/STOCK/CRYPTO

02
RSI IS A TOOL THAT HELPS
INVESTORS DECIDE WHEN
SOMETHING IS OVERBOUGHT OR
OVERSOLD

03
YOU CAN SET AN RSI PERIOD TO
ANY NUMBER OF MINUTES,
HOURS, DAYS, ETC.

04
SOMETIMES, THE TREND (OR
OTHER NEWS/INDICATORS)
TAKES PRECEDENCE OVER WHEN
PRICE IS
OVERBOUGHT/OVERSOLD, SO
IT’S NOT A GUARANTEED
INDICATOR

A1 Trading Financial Education Page 15

 Technical Analysis

MACD Indicator

The moving average convergence

divergence indicator focuses on the 12 and 26
day moving average looking for bearish or
bullish signals in a particular market. You
calculate it by subtracting the 12 period from
the 26 period Exponential Moving Average.
That line is then charted with the 9 day EMA.
If the MACD crosses above or below the
signal line, the trader can indicate when to
buy or sell.

BIG IDEA

A1 Trading Financial Education Page 16

Technical Analysis

MACD Indicator

Here on this chart, you can see the MACD line colored
in blue and the signal line colored in orange. When the blue
line here crosses above the orange, that is a bullish indicator.
When the blue line crosses under the orange, that is a bearish
indicator. In this example, the convergence was clear, and
price went up accordingly, but this is not always an accurate
depiction of what happens. The MACD can cross above or
below the signal line and nothing could happen as well, or the
price continues in the same direction it's been going in.

A1 Trading Financial Education Page 17

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What you're missing:

Candlestick pattern Basics

Engulfing candlestick pattern
Pinbar candlestick pattern
Doji candlestick pattern
Hammer candlestick pattern
Breakout trading
Reversal trading
Head and shoulders pattern
BIG IDEA
Bull flag pattern
Wedge pattern / rising & falling wedge pattern
Building a technical bias

A1 Trading Financial Education Page 18