![]() With the breaking of the trend – the models that appear on the chart, which, if fulfilled under certain conditions, may foreshadow the change of the existing trend in the market.Graphical technical analysis – this is an analysis of the various graphical models, formed by the determined regularities of the price movement of the graphs, in order to suggest the probable development or change of the existing trend. Market strength indicator – reports the strength of the current trend.Cycle indicator – serves to illustrate cyclic factors and their length.Moment indicator – used to measure the rate of change of a price for a certain point in time.Change indicator – serves to measure the strength of change in the price of the underlying asset.Trend indicator – factors that serve to measure a trend – its strength and duration.The main tool of analytical methods is the indicator, which is broken down into five categories: Estimation of the amplitude price fluctuations in the current direction (weak or strong change of course).Estimation of the period in which a certain direction of movement is active (short and long term, beginning and end of the trend).Assessment of the current direction of price dynamics, ie the derivation of the trend.“History repeats itself”, a bit differently: the key to the future lies in learning about the past. And if in the past these models worked, then there is every reason to believe that they will continue to work in the future, as long as they are based on human psychology, which has not changed over the years. The graphical pricing models that have been separated and classified over the last 10 years reflect the most important features of the psychological state of the market. History repeats itself – technical analysis is linked to the study of human psychology. Price movements are subject to trends – from this the following implications arise:Ĭorollary 1: The current trend is likely to develop in future, but it will not develop in the opposite direction, that is, it is excluded the disorder of the chaotic movement of the market.Ĭorollary 2: The current trend will develop by the time it starts moving in the opposite direction. Each price change is matched by a corresponding change to internal factors (economic, political, psychological). ![]() The market takes everything into account – the market itself indicates its most likely direction on the move. The graphs reflect the influence of fundamental factors in the market and in the technical analysis takes into account the following tenets: ![]() Primary the analysis is considered prices and the change in other factors (volume and open positions), is studied to confirm the correct direction of the price. Technical analysis – this is a study of market dynamics, most often using graphs to predict future directions. ![]()
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