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Building a Technical Bias

Big Idea: Now that we have all this knowledge on technical analysis, we can combine these tools and knowledge to expand our trading and performance. Building a technical bias includes the use of one or more indicators to find ideas and setups and improve the way we trade. Using a technical bias before placing a trade can benefit a trader’s results and even risk management.

CADJPY Example

Here is an example of different indicators used on this chart. The chart consists of EURUSD’s 14-Day RSI, 50 and 200-Day moving averages, trend lines, and support and resistance zones. The low reading on the RSI suggests that price is oversold and could be ready to turn bullish. The moving averages tell us that price is relatively stable because the 50 day MA hasn’t crossed under the 200 day MA, so it might still be bullish. The support and resistance lines show us key levels where price may have to test more than once before a break.

Key Takeaways


-Technical biases usually include the combination of a few to several various tools that give the trader an incentive to go long or short in a market

-Building a technical bias before entering a trade can drastically improve your trading performance and results

Resources

What's Next?

Keep learning about technical analysis!
  • SUPPORT & RESISTANCE

    Learn how to use the number 1 most commonly used price action tool!
    BEGIN LESSON

    MOVING AVERAGES

    Learn all about moving averages, and how to trade with them!
    BEGIN LESSON

    RELATIVE STRENGTH INDEX

    Learn all RSI, and how to trade with it!
    BEGIN LESSON
  • ENGULFING & PINBAR CANDLESTICK PATTERN

    Learn all about engulfing & pinbar candlestick patterns, how to spot them, and how to trade them!
    BEGIN LESSON

    HAMMER CANDLESTICK PATTERN

    Learn all about hammer candlestick patterns, how to spot them, and how to trade them!
    BEGIN LESSON

    CANDLESTICK PATTERN BASICS

    Learn all about candlestick patterns, how to spot them, and how to trade them!
    BEGIN LESSON
  • REVERAL TRADING

    Learn how to spot markets reversing early, and get involved!
    BEGIN LESSON

    HEAD & SHOULDERS PATTERN

    Learn how to use this popular reversal method in your trading
    BEGIN LESSON

    BUILDING A TECHNICAL BIAS

    How to use technicals to assist your trading entries
    BEGIN LESSON
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