PTMC team 07.10 2014

How to read charts. Technical Market Analysis

Hey there, Protraders!

Many people, especially at the beginning of their adventure with trading wonder what will happen next, what price will do in an hour or by the end of the day. When we start looking for methods to predict future price movements, we will find plenty of different analyzing techniques rather quickly. Many people think that to make a good trade, they need to learn how to make good analysis. It's well known fact that investment banks got probably most professional analysis in the world and what comes next are their financial reports with outstanding trading profits.

First thing we will probably walk on is Technical Analysis or Price Action. Both these methods focus on a historical price behavior and try to extend it to the future - as history tends to repeat itself. It seems totally understandable, as to know where we are going we need to know where did we start and which way we're moving. For example, if price bounced at a support level and formed upward candle, and next one is upward as well, we can anticipate that heading that way price will eventually hit the nearest resistance.

On the other hand, some Technical Analysis opponents speak up here saying that you cannot drive a car observing reverse mirror only. Or if you'll sit at a bus stop tracking colors of bypassing cars, you will find it very difficult to predict next car basing on colors of preceding cars. Does three green cars in a row would signal that fourth or fifth will also be green?

But such approach assuming that markets are totally random is very extreme and most probably unable to defend it in argument.

Beginner traders often look at charts and think, i.e.: "It went down a lot, so I think it will rise up now", or "Now it looks like it will drop". It's simply reading a charts but without the skill of reading. It's like you would take book written in Chinese and looking at writing you would try to guess if the book is good or boring.

But let's start from the beginning

On a chart each candle has its meaning. Well, maybe not each and every candle, but most of them. From each candle and each set of candles you can acquire some information. Taking any piece of chart, couple subsequent candles, into consideration, we may find information about what market is doing right now. How? Each candle can be described by 6 basic parameters: (1) open, (2) close, (3) high, (4) low, (5) time, (6) range. Out of these values we derive other measures such as: wick length, body length, ratio of a wick compared to body, candle's dynamics - range compared to time, etc. Each timeframe, each candle, looks like it really looks not without a reason, and not by accident. Candle with a big range and small body may mean that market was undecided at that time, while long candle with big body will prove strong supply or demand on a market during certain time period. If counter wick is short or absent at all, it may mean that market was basically one way and no one was going to fade the move or take profits of it at that point in time. Will such situation last in close future? If market was undecided or bold, how long would such state persist? Why buyers are buying and sellers are selling? Well, an answer to this question will probably come to us from the "big picture". Long supply candle in an uptrend may mean temporary profit taking, i.e. on a weak data release. But eventually probability favors trend continuation, and traders love to buy such dips. On other occasion strong candle breaking out of consolidation may mean that market decided to pick direction, and we should not buy such dip, obviously.

Context and current situation

If we place two moving averages, slow one - showing tendency in a longer term price movement - and fast one - which follows price with low latency - then we will receive example of a context (big picture) and current situation (small picture). Therefore, in certain trend (slower moving average) we can identify retracements, impulses and periods of consolidation (faster moving average) which might be a potential supply/demand area.

Why context is so important?

When we begin to learn various types and methods of analysis and we focus on them so much, that we may lose attachment to basics. We start to use trend lines, indicators, channels, supports and resistances, etc. which proved to be good signals with assumption that these signals will pay well no matter what. We assume logical consequence - if A then B. We read on forums or in books about patterns that should result in reversal or bounce or at least they give good chance of that. However in practice we will fail on these signals very often while theoretically signal was perfect. After we test such approach of focusing on single signals, we start to discover, that proper signal is not the only thing that matters but also context in which it occurs is important as well. And now, context is a confusing thing here. Pinbar in any position is not any specific clue about future price action. But Pinbar on a support or resistance level may suggest some certain market reaction. But even here we will find it difficult to trade, as support and resistance levels tend to be broken.

Context or prevailing trend (technical and fundamental) will tell us the way of interpreting such signals we are finding on charts. Well known rule says, that trader should not sell in an uptrend nor buy in a downtrend.Signals that stay in opposition to the trend most often are ignored by market or tied with potentially great risk and small reward - it's a reversal of what we should chase in our trading. Trend is all about breaking S/R levels on its way even if these levels are able to hold price for a while.

Specialization will be the key

Many traders found their specialization in certain ways of analyzing and interpreting charts. They focus on waves, candles, patterns, indicators. After some time certain schemes on a chart become clear to traders what allows them to read charts more effectively. For example, they see higher trend and signals warning of possible retracement. Trader starts to notice continuation or reversal signals which help him to determine whether it's better to stay in position or run out with profits.

We can read from the chart using couple most basic terms and patterns like: impulse/momentum, retracement, wicks, reversal patterns like double bottom or double top, supply or demand zones, candlestick formations, movement range correlation (harmonic patterns or trend lines, channels, etc.) and many more. Prevailing trend shows us the tendency among traders on a given instrument. And trend always tends to continue, so we should properly treat signals we find regarding if they are in line with the trend or opposite. We may count waves, use moving averages, highs/lows positioning or one of many other techniques to determine dominating context for our trading signals. Therefore trader does not need dozens of signals to generate profits - usually trend accompanied by 2-3 good entry signals should be enough.

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Referral Program Agreement

Referral Program Agreement (henceforth referred to as “the Agreement”, “Referral Agreement”) is made between PTMC (henceforth referred to as “the Company”) and Referral Partner (henceforth referred to as “Referral Partner” or “the Partner”).
Terms and conditions of the present Agreement are binding for the Company and for the Referral Partner.

The Agreement contains all the terms and conditions that shall regulate relations between the Company and the Referral Partner.

The Agreement shall enter into effect as soon as the Referral Partner registers on the PTMC official website and shall remain valid until the termination of the Agreement.

Please note that the Company reserves the right to revise, modify, change or remove clauses of the Agreement at any time at its sole discretion. Please check periodically terms and conditions of this Agreement on the Company website.

The Company reserves the right to reject the registration of any entity or person in the PTMC Referral program including the case if such entity is a person suspected of fraudulent activities фе its sole discretion.

1. General Terms

1.1. The Company and the Referral Partner agree and accept the obligations under the Agreement.

1.2. The Referral Partner undertakes rights and obligations set forth hereinafter. The Referral Partner agrees to acquire users to the Company acting in his name.

1.3. The Referral Partner acknowledges that all the users acquired to the Company are the Clients of the Company.

1.4. The Agreement is written in English language. The Company may provide the Сlient with the translation of the Agreement into the needed language on demand. English version of this Agreement is to be of prior importance. The translation may be provided only for the convenience of the Сlient.

1.5. To become an Referral Partner a user must:

1.5.1. Register on the Company website PROTRADER.ORG.

1.5.2. After the registration on the PTMC official website the Referral Partner receives an individual unique referral link which is available in user profile.

1.6. The Company has the right to request confirmation of any information provided by the Referral Partner during the registration.

1.6.1. When the information provided by the Referral Partner during the registration is changing, the Referral Partner should inform the Company about such modifications and request the Company to update the data.

1.7. After the Referral Partner accepts terms and conditions of the Agreement, he/she has the right to:

1.7.1. Conduct advertising campaigns in the interest of the Company.

1.7.2. Introduce marketing and advertising campaigns with the aim to acquire new Clients to the Company, provided that such events are legal in the country where they are conducted.

1.7.3. Provide the Clients with the necessary information about the Company, including the Company contact information, as well as general conditions of the services provided.

1.7.4. The Referral Partner has the right to use promotional materials provided by the Company representatives, they are: banners, text links, landing pages etc. The Referral Partner may use banners with the Company logo provided by PTMC and/or his personal referral link.

2. Rights and obligations of the Referral Partner

2.1. By registering on the official PTMC website the Referral Partner confirms that he/she accepts all the terms and conditions set out in the present Agreement. The Referral Partner acknowledges the fact that the Company has a right to modify the terms and conditions of the Agreement unilaterally.

2.2. The Referral Partner agrees to acquire new Clients to the Company under the present terms and conditions set by the Company.

2.3. The Referral Partner accepts terms and conditions regarding funds withdrawal and commissions charged that are specified in the Client Agreement.

2.4. It is prohibited to the Referral Partner to use any fraudulent methods, such as threatening, blackmailing etc. to attract new Clients to the Company.

2.5. The Referral Partner is obliged to get acquainted with the services provided by the Company on his own and inform the Clients he/she has acquired/is going to acquire about important changes in time.

2.6. The Referral Partner is obliged to warn the Client about the risks of currency trading on the foreign exchange market.

2.7. The Referral Partner is obliged to solve the problems the Client may face with while trading on the foreign exchange market. In case if the Referral Partner does not achieve to solve the above mentioned problems on his own, the Referral Partner is obliged to contact the Company and represent the necessary details.

2.8. The Referral Partner shall not give any recommendations or advice to the Client related to trading operations on the market. The Company shall not be responsible for the consequences of such recommendations and advice

2.9. The Referral Partner is not permitted to conduct trading operations on the account of the Client he has acquired.

2.10. It is prohibited to the Referral Partner to get referral revenue from his own accounts and those owned by his close relatives in case if the partner is an individual; as well as from private accounts of founders or accounts of their close relatives in case if the partner is a legal entity.

2.11. In case it is detected that the Referral Partner uses documents of the third parties with the aim to get referral revenue, the Company has the right to block all such accounts including personal account of this Referral Partner without any right of further renewal.

2.12. The Referral Partner shall not disclose the information received from the Company during the collaboration period and the data the containing in the Agreement to any third parties.

2.13. It is forbidden to the Referral Partner to use the following types of advertisement:

2.13.1. Advertisement on websites that contradict the laws of the country where the Referral Partner is located.

2.13.2. Advertisement on websites content of which is contrary to current legislation, morality, public order, good faith or is defamatory, aggressive, obscene, offensive, violent or incites violence, racist or xenophobic, or in general which is illegal or violates a person's rights and/or physical and/or moral integrity.

2.13.3. Spam mailing.

2.13.4. Advertisement with the false information contained.

2.13.5. Any other advertising that may affect credibility or reputation of the Company or any other dishonest marketing methods.

2.14. It is prohibited to the Referral Partner to organize monetary relations with the Clients (including receiving money, payment or banking cards, etc.).

2.15. The Referral Partner certifies and agrees that he shall act in accordance with all the applicable Anti-Money Laundering laws.

2.16. The Referral Partner is obliged to inform the Client of the need to protect security and confidentiality of account and login information and of the necessity not to disclose such information to any third parties. The Company shall not be responsible for the unauthorized use of the Client account information by any third parties.

2.17. The Referral Partner shall be responsible for the accuracy of the Client registration form and the authenticity of the data provided by the Client.

2.18. The Referral Partner allows the Company to use contact information provided during the registration, such as email address and other information specified in order to send the letters and proposals.

2.19. The Referral Partner agrees that the Company may unilaterally terminate and change terms and conditions of the Agreement without any explanations.

2.20. The Referral Partner is not entitled to: publish any negative comments (essays, letters) concerning the Company in any newspapers, magazines or other periodicals, blogs, Internet forums or other web-resources that may affect credibility or reputation of the Company. If the Referral Partner uses his own web-resource in order to attract clients to the Company, the content of the web-resource regarding the Company shall be approved by the Company.

2.21. If the Company detects that the Referral Partner has been involved in activities described in clause 2.20 of the Agreement, the Company is entitled to reject the Referral Partner request for funds withdrawal and to block his account, as well as inform the regulatory authorities of the jurisdiction of the Referral Partner.

2.22. It is prohibited to the Referral Partner to use PTMC brands in any way or manner whatsoever, including but not limited to the words “PTMC” spelled in any possible way (including with typos, spaces, signs, symbols or in any other way). Such forbidden use of the PTMC brands includes the use of such words/trademarks in the referral advertisements or in any part therewith, in the displayed URL and/or in the destination URL.

2.23. The Referral Partner shall only deal with third parties as a client of the Company. The Referral Partner shall not use the Company name, Company logo, etc. anywhere, including promotional materials, letterhead and business cards, advertisements and publications without the Company’s prior consent, with the exception of the case described in clause 1.8.4. of the Agreement.

2.24. The Referral Partner shall respect the confidentiality of the Company business and it is prohibited to him/her to disclose any confidential information or any information concerned the Company business for five years after termination or cancellation of the Agreement.

2.25. The Referral Partner guarantees the precise performance of the above mentioned obligations.

3. Rights and obligations of the acquired Clients

3.1. A user shall be considered as acquired by the Referral Partner after it is registered on the official PTMC website by following the unique link of the Referral Partner.

3.2. A client shall be considered as the acquired by the Referral Partner under the condition that the Client has not be previously registered as the client of the Company.

3.3. The Referral Partner shall not be entitled to refer his close relatives in case if the Referral Partner is an individual; or close relatives of the founders in case if the Referral Partner is a legal entity. The Referral Partner shall not be entitled to refer his own accounts.

3.4. Account owned by the Referral Partner and those owned by his close relatives if the partner is an individual, as well as private accounts of founders or accounts of their close relatives if the partner is a legal entity shall not be considered as those that the Referral Partner has acquired.

3.5. Accounts detected to be registered by the Referral Partner himself in order to get money through dishonest means shall not be considered as those that the Referral Partner has acquired. In case if such violation of the terms and conditions is detected the Company is entitled to terminate the Agreement and to block the Referral Partner account.

3.6. The Referral Partner himself, his relatives or any other affiliated parties shall not be considered as the Clients acquired by the Referral Partner. In case if any data of the Referral Partner coincides with the data provided by any acquired Client (such as ID data, address, telephone number, email address, IP address, etc.), such Client shall not be considered as the acquired one and shall be removed from the Referral Partner list. In such a case the referral revenue credited for this Client will not be paid.

3.7. Should the IP address of the Client be the same as that of the Referral Partner then they shall be considered affiliated and the referral revenue credited for this Client will not be paid.

4. Rights and obligations of the Company

4.1. In case if the Referral Partner fails to perform any obligations under the Agreement, the Company is entitled to terminate this Agreement.

4.2. The Company reserves the right to take legal actions against the Referral Partner in case the Referral Partner attempts to manipulate the Company and/or the Company proprietary trading platform and/or abuse the Referral Program. The Company reserves the right to withhold and/or deduct from any payment to the Referral Partner in the event of such manipulation and/or abuse.

4.3. The Company reserves the right under its sole discretion to reject the registration of any entity or person to the Referral Partner, including the case if such entity is involved in fraudulent activities.

4.4. If the Referral Partner appears to belong to one of the categories described in clause 4.3 the Company is entitled to terminate the Agreement and to block the Referral Partner account.

4.5. If any activity conducted by the Referral Partner is contrary to international law, morality, public order, good faith etc., the Company has a right to terminate the Agreement and to block the Referral Partner account.

4.6. The Company shall pay referral revenue to the Referral Partners after the Company receives payments for the software license paid by the acquired Clients.

4.7. The Company shall provide the software paid by the acquired user after the fact the payment has been carried out.

4.8. The Company shall enable Clients to conduct trading operations using PTMC software by providing them with logins and passwords to the trading terminal.

4.9. The Company maintains records of all trading operations made by the Clients.

4.10. In case if the Referral Partner fails to perform any obligations under the present Agreement, the Company has a right to exclude Clients from his list of the Clients acquired by him/her.

4.11. The Company is responsible for calculations of the referral revenue. In case if the Referral Partner wishes to check the calculations, the Referral Partner may request his Clients to provide the necessary statements. The Company shall not provide Referral Partners with the payment statements of the Clients.

4.12. The Company agrees to pay referral revenue to the Referral Partner in accordance with Appendix 1 of the present Agreement.

4.13. The Company determines method of the referral revenue calculation at its sole discretion.

4.14. In case if revenue is charged for the allegedly fraudulent accounts the Company reserves the right to cancel the revenues from such accounts and exclude such Referral Partners from the Referral Program.

4.15. Neither Party hereof shall be held liable for the complete or partial failure to fulfill its obligations in case if this failure results from Acts of God (including but not limited to fire, earthquake and other natural disasters, war or other military operations, blockades, government regulations and other extraordinary and unavoidable circumstances beyond either Party’s control).

4.16. Under the above mentioned circumstances the Party that fails to fulfill its obligations is obliged to inform the other Party through written notification within five business days from the moment of their onset and cessation.

Appendix 1. Referral revenue calculation

The Company shall pay the Referral Partner percentage in the amount from 10% up to 30% from the software license payments carried out by the Clients acquired by the Referral Partner.

The equivalent of the above mentioned referral revenue is calculated immediately as soon as the acquired client pays for the software and displayed in the user profile of the Client on the official PTMC website.

The Company shall pay the Referral Partner a certain percentage from 10% to 30% from the software license payments. This percentage is determined by the total number of the Clients acquired to the Company by the Referral Partner. The percentage is calculated according to the table attached below.

Crediting of the referral revenue shall be made on a monthly basis and shall be calculated within the first 10 days of each calendar month.

Any other payments are possible only in case if the Company and the Referral Partner agreed it in an amendment agreement.

Total number of the attracted users*	Referral revenue percentage
1 – 9 users	10,00%
10 – 99 users	20,00%
100 + users	30,00%