Trading from charts
Trade straight from the charts. Use the analysis drawing tools to keep an eye on trends and pick your moment to trade more successfully.
The CMC Tracker platform comes with advanced charts, with up to five years of history for each product. Choose between candlestick charts, Open High Low Close (OHLC), spread and line charts, and then trade directly from your charts. You can open up an order ticket simply by clicking the ‘buy’ or ‘sell’ price, and you can edit your stop loss and take profit levels right on your charts.
Our technical studies, overlays and drawing tools help you analyse price movements and trends on your charts so you can make more informed investing decisions. Here are some of the popular analysis techniques and features used when trading from our advanced charts:
Candlestick charts let you see more information than simple line charts. A candle represents a specific time period – for example, five minutes, one hour or one day. Each candle shows you four important values – the high price, low price, open price and close price for the selected time period.
The thick coloured ‘body’ of the candle shows the opening and closing prices and the thin ‘wicks’ represent the highest and lowest prices. If the price is trading higher than the previous close, then the body of the candle is coloured green; if it’s lower, the candle will be red.
Identifying support and resistance
When high or low prices are frequently plotted along a common level, these are often called support or resistance levels. Support levels represent prices where the buying pressure tends to be strong enough to overcome the selling pressure at that price, so when price reaches a support level it tends to start rising again. Resistance levels represent prices where the selling pressure is strong enough to overcome the buying pressure at that price level, which usually pushes price down again.
If a candle breaks and closes through a common support or resistance level, then this is called a breakout. Breakouts can sometimes be followed by a short-term spike in price action.
A Fibonacci retracement is a technical analysis tool that is used on a previous trend to try and predict future levels of support and resistance.
How to use the Fibonacci retracement
First, identify the previous trend you want to analyse and then apply the Fibonacci retracement to its highest and lowest points. The overlay will then contain three strategically important points: the 61.8%, 50% and 38.2% retracement levels.
These levels represent potential support and resistance levels, which could lead to buying or selling opportunities.
In a strong trend, a minimum retracement is typically around 38%. In weaker trends you’ll tend to see the maximum retracement (about 62%). A 100% retracement also tends to mark the spot for a significant support and resistance level.
Simple Moving Average (SMA)
A Simple Moving Average (SMA) is a line that connects the average price over a certain period of time and can provide insight to the future direction of a trend.
The most commonly used average is the standard (or simple) moving average. A moving average is a line that connects the average price over a certain period of time, for example, over 20 or 50 days. The SMA, like all moving average indicators, is known as ‘trend following’ because it has the best track record in a trending market.
How to use the SMA
The buy and sell signals that technical analysts look for are very simple to spot. When the price closes above the SMA you have a buy signal. If price closes below the SMA you have a sell signal.
When the SMA is in a trending market it can also provide potential support and resistance levels. These are levels that could be key if the existing trend is to continue.
Moving Average Convergence Divergence (MACD)
The MACD is a popularly used technical indicator that generates buying and selling signals on your chosen timeframe when the white and red lines cross.
The white line in the MACD oscillator is called the MACD line and is calculated as the difference between two exponentially smoothed moving averages of closing prices (usually the last 12 and 26 periods). The slower red line (called the signal line) is usually a 9-period exponentially smoothed average of the MACD line.
How to use the MACD
The actual buy and sell signals are given when the two lines cross. A crossing by the white MACD line above the slower signal line is a buy signal (when the red ribbon crosses and becomes white). A crossing by the faster white MACD line below the slower line is a sell signal (when the white ribbon crosses and becomes red). The MACD values also move above and below a zero line, which gives another set of signals about price trends. Technical analysts believe that an overbought condition is present when the lines are too far above the zero line. This can mean that there has been too much buying, and the price trend could reverse soon. And so an oversold condition is present when the lines are too far below the zero line.
Analysts who use the MACD believe that the best buy signals are given when prices are well below the zero line (oversold), and the white MACD line crosses from below to above the red signal line.
The blue and orange coloured section of the MACD shows the strength of the trend. A growing blue chart shows an increasingly positive trend while a shrinking blue chart shows a decreasingly positive trend. And vice versa – a growing orange chart shows an increasingly negative trend while a shrinking orange chart shows a decreasingly negative trend. When the histogram hits the zero line, it then switches colour indicating there has just been a MACD crossover.
Relative Strength Index (RSI)
The RSI is a technical indicator that generates buying and selling signals when the white line breaks then crosses back through the blue or orange lines.
The RSI is a number (often called a reading) that moves between 0 and 100. You’ll notice that there are horizontal lines placed at the 30 and the 70 mark. These two lines correspond to and define ‘oversold’ and ‘overbought’ readings on the RSI.
How to use the RSI
The area below the 30 RSI reading is defined as an oversold zone, and the area above the 70 RSI reading is defined as an overbought zone. These levels can be used to find buy and sell signals.
Both of these zones should be regarded as danger zones. When the RSI enters these zones, it can be a warning that a change in trend is coming.
Technical analysts believe a buy signal occurs when the RSI reading drops below the 30 RSI level and then crosses back above it (indicated by an orange shading). And vice versa – sell signals occur when the RSI reading moves over the 70 RSI level and then crosses back below it (indicated by a blue shading).
The RSI has a better track record in stable or ranging market conditions. Many technical analysts will ignore the RSI if the market is trending as it can give false signals.
The Slow Stochastic is a technical indicator that attempts to predict price turning points by comparing the closing price of an instrument to its price range.
The Slow Stochastic is an indicator with numbers (readings) that range between 0 and 100. It is plotted against a vertical scale and there are horizontal lines placed at the 20 and the 80 mark. These two lines correspond to and define ‘oversold’ and ‘overbought’ readings on the Slow Stochastic.
How to use the Slow Stochastic
The area below the 20 Stochastic reading is defined as an oversold zone and the area above the 80 Stochastic reading is defined as an overbought zone. These levels can be used to generate buy and sell signals.
Both of these zones should be regarded as danger zones as Stochastic levels entering these zones usually (though not always) warn that a change in trend is approaching.
Technical analysts believe a buy signal occurs when the Stochastic reading drops below the 20 Stochastic level and then crosses back above it (indicated by an orange shading). Sell signals occur when the Stochastic reading moves over the 80 Stochastic level and then crosses back below it (indicated by a blue shading).
The Slow Stochastic has a better track record in stable or ranging market conditions. Many technical analysts will ignore the Slow Stochastic if the market is trending as it can give false signals.