Monday, 22 April 2019

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Technical Analysis

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To try to discover how the stock market can be developed in the future, analysts and traders use different tools we can classify into two groups:

● Fundamental analysis.

● Technical analysis.

The Fundamental analysis is developed solely on the basis of the study of economic data of each company.

Technical analysis - which is what concerns us - use the information you provide the evolution of the stock price and the formation of patterns recognizable, for which it employs graphics as principal observation tool. In technical analysis, there are several forms of analysis, between these highlight the chartist analysis or graphical analysis, the Wave Elliott principle, indicators and candlestick charts. Technical analysis is more complete than the fundamental, incorporating your own analysis the effects that derived of it.

Why is it better the technical analysis that the fundamental analysis to find the possible future evolution of any financial asset that is listed on a stock market?

 Well because we assume these three conditions:

● That the market gives us all the information possible to predict its tendency.

● That the prices evolve, always, following certain trends, movements or repetitive patterns.

● That the market has memory, ie what happened in the past is likely to be repeated in the future.

Using technical analysis we try to recognize, in advance, the market trend will continue in the near future, to make decisions of buying or selling beneficial to our interests.

We have said that technical analysis uses different tools, but the best known are the graphics and statistical indicators. The vast majority are calculated using the prices and trading volumes.

These are some of the graphics and statistical indicators more used:

Graphics

- Linear
- Bars
- Candles (*)
- Etc.

 (*) It is the one that we will use.

Statistical indicators (*)

- Moving averages
- Bollinger bands
- MACD
- Momentum
- RSI
- Stochastic Oscillator
- Etc.

(*) We will use the least possible.

At this point, Closure this paragraph because it is not an object of the same one to realize an exhaustive description of all the existing tools to develop the technical analysis. I think it is enough to have a simple idea of what is technical analysis and what is important, do not forget, It is all that that "surrounds" the trading that is going to allow to improve, day after day, our trades. Moreover, the theory of technical analysis is easily affordable by all, and the interesting thing is the application that will make every one of us at the time of operation.

To deepen the technical analysis, I suggest consulting one of the many good books exists on the subject, or, alternatively, find online information about the particular through any search engine.

Visit the following link to learn more of the technical analysis

 Author: Traderpirata.com

Erick Gálvez
Author: Erick GálvezWebsite: http://www.asdforex..comEmail: This email address is being protected from spambots. You need JavaScript enabled to view it.
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ASDForex manager and professional trader since 2008. I am also Aleforex.com manager where you can view the services that I give
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