Technical Analysis

Always perform a technical analysis
Do not lose what the technical analysis is able to bring into the table

Technical analysis considers price movements and past patterns they create. It is believed that under the same circumstances, assets behave the same, producing the same trends and patterns. There are three assumptions when it comes to technical analysis: the price of the asset is automatically influenced in economic conditions, interest rate changes influence the buyers and sellers behaviour, and trends tend to repeat themself. Technical analysis covers a wide range of data and variables, from prices to volume and market capitalization for any asset. It is mainly related to stocks. Its purpose is to bring a taste of the future prices in the present. There are different kinds of charts which need to be analysed to get the information needed to make a decision. Bar charts, line and candlesticks will provide a wide range of information.

There are also technical indicators, like the most used one, the moving average for different timeframes. There are support and resistance levels, which can be inserted as a line on a chart to show the levels at which the stock price faces a resistance when it is trying to go up, and it is supported to not go lower.

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Technical analysis is the study of market action, primarily using charts, for the purpose of forecasting future trends. The term “market action” includes the three-principal sources of information available – price, volume and open interest. Technical analysis aims to forecast the price movement of any tradable asset that is subject to forces of supply and demand. Technical analysis most of the time is based on the price changes, but some analysts track other data like trading volume or open interest figures.

Technical Summary

Technical analysis is based on
these assumptions:

Technical analysis is often criticized because it does not take in consideration fundamental factors. Technical analysts explain that everything from company’s financial situation to outside factors are already priced into the stock. So, according to them, there is no need to consider outside factors separately.
Technical analysts believe that prices move in a certain way, in short, medium and long-term trend. In other words, a stock price is more likely to repeat a past trend than move strangely.

Technical analysts believe that history tends to repeat itself. Technical analysis uses chart patterns to analyze these emotions and subsequent market movements to understand trends. Many forms of technical analysis have been used for more than 100 years; they are still believed to be relevant. 

Technical analysts look at the following broad types of indicators: Price trends, chart patterns, volume and momentum indicators, oscillators, moving averages, support and resistance levels.

The range of financial instruments

FIAT CURRENCIES

STOCKS

ENERGY

METALS

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