What is Relational Analysis?
Chart created with Saxo Trader
Any forex chart, stock chart or financial markets chart essentially contains only two variables, prices and times.
The theory of technical chart analysis states that "all information" is in the last price, therefore having access to the most recent last prices is all you need for technical analysis purposes.
The basic technical anlysis theory, that you only need the price already came under huge pressure when the importance of volume information and the enhancements it made to technical analysis, became evident. It clearly helps to have the volumes included in the last price(s).
||During the pre-information age there wasn't real conflict between this view and what analysts did in practice.
While they could work with end-of-day data in many cases and first form opinions based solely on the study of historical prices (daily, weekly and monthly data series), they could also the next day or next few days get relevant news about the content of those prices in the news papers.
There wasn't in practice a real issue with the statement, that the latest price contains all the information, followed with the assumption "therefore you only need the latest price".
Clearly this has changed with real-time price information up to the second, coupled with real-time news and opinions about everything.
To fire up a Metatrader 4 trading platform, pre-populated with popular technical indicators you run on miniscule timeframe price data series isn't necessarily the pinnacle of technical analysis, let alone a complete analysis.
Relational analysis concerns itself with the "content" of the last prices and also with the context of the last prices.
In our Weekly Relational Analysis Briefings we seek the answer to two questions:
What is the price content? | What is in the price?
What is the price context? | In what is the price?
In that sense relational analysis also links prices together by exploring what common content and context denominators are "in those prices". We call these "RA Themes" and they are embedded in a storyline
Relational analysis is supported by basic technical anlysis. "Keep it simple, simpler". Support - Resistance - Trend - trend reversal - reversion to the mean.
We also use two unique tools, both "context creators" - "price levels" and "median grids", in our relational analysis.
What do you get in the weekly briefing?
A weekly PDF document of approximately 15 pages (some with charts) containing:
A discussion of current market drivers based on the identified main "themes"
Each main "Theme" is explored as follows:
Review and main takeaway of last week considering the review and takeaway of the separate themes.
- Which markets / currencies are mainly impacted?
- What data / news one should look out for?
- What market / currency correlations should one look for?
- What is the longer term storyline?
- What were the recent developments? (price and time and events)
- What was the gist of what we said last week?
- What is the main takeaway from the last week?
Opinions (analysis) provided by market commentators we follow. Our own comments on these opinions.
An "editorial" discussion "DDT (Dirk du Toit) Own thoughts".
A look at the data calendar and activities of note in the Week Ahead
- A review of price action in major currencies (considering main events also)
- A short main takeaway based on the indepth analysis of the themes
We aren't guessing about the future here. That's a fools game. We actually filter the data releases and events to exclude the noise and focus on the essence considering the context as we understand it.
Looking out for This Week - we identify the essence of what "the market" will focus on, (which will drive prices).
Reference Prices at the time of the conclusion of the briefing as its written up.
A section about the current "Median Grid" and any adjustments if applicable.
A section about the current median grid adjustment bias.
A section about a current trading bias.
You also get access to our Relational Analysis discussion Forum
How will the weekly briefing benefit you?
- You will develop a proper understanding of what drive prices at the moment and how to trade accordingly.
- You will learn what "the market" is pricing in and how that impacts on trend development / trend reversal / reversion to the mean.
- You will become an expert in fundamental analysis which is useful for your short term trading / swing trading / trend trading / price action trading / momentum trading /position trading.
Allow DayForex to teach you how to improve your trading results with relational analysis
Subscribe now for US$35.00 / month or US$339.00 / year.
(Included the latest edition of Bird Watching in Lion Country - Forex Trading Explained)
Chance favours the prepared trader