In this lesson, you will learn:

  1. Types and indicators of technical analysis 
  2. What does technical analysis mean 
  3. How to spot a trend 
  4. How to use indicators 

WHAT TECHNICAL ANALYSIS MEANS

This type of analysis looks at the historical data of an asset and looks for patterns in past price movements. It also takes into account the trading volume of the securities. Technical analysis can be used for any type of financial instrument (stocks, bonds, commodities) as long as there is historical data on the desired asset.

Technical analysis is often used for short-term investments because it does not take into account the future prospects of a company’s potential, but is based only on the history of the asset. Technical analysis is useful for those who calculate a daily strategy for intraday trading. Such analysis is done using statistical methods and charts that can be used to identify certain patterns.

WHAT IS TECHNICAL ANALYSIS

Technical analysis is based on the following assumptions:

– All relevant information is already included in prices;
– Supply and demand determine market value;
– Past performance is an indicator for predicting future price movements;
– Hidden patterns and trends can be identified in the history of an asset;
– Investor sentiment can be predicted;
– There are trends in market behavior;
– In the case of any particular asset, investor behavior can be repeated.

TYPES AND INDICATORS OF TECHNICAL ANALYSIS

There are many different types of technical analysis depending on its nature and properties. First of all, an analyst may use different types of charts such as bar chart, line chart or candlestick chart. Charts show price movements at different time intervals – one minute, five minutes, an hour, an hour, a day, a week, a month or a year. 

In addition to charts, analysis uses different types of indicators. A trend line is used to find trends in past stock prices. Fibonacci retracement is an indicator that can be used to find support and resistance levels. Many other indicators are also available in technical analysis.

All of the above components of technical analysis are used in the process of developing an investment strategy. They can be useful in identifying patterns and recurring trends in the movement of a stock price or the price of other instruments.

TECHNICAL ANALYSIS AND FUNDAMENTAL ANALYSIS

Unlike technical analysis, fundamental analysis is an in-depth analysis. It evaluates an investment decision based on a company’s financial statements, industry, competition, future prospects, etc. It is more expensive to perform, but can help in the process of assessing the real value of a company or investment.

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Список Уроков


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