Technical analysis is a method used in the field of finance, particularly in the context of financial markets such as stocks, currencies, commodities, etc. It aims to evaluate and predict future price movements based primarily on the study of historical market data, including charts and technical indicators.
Let's check some so:
Charts: Technical analysts use charts to visually represent the price movement of a financial asset over a period of time. The most common chart types are candlestick charts and bar charts.
Trends: Technical analysis is often based on the idea that trends observed in the past tend to repeat themselves in the future. We distinguish between upward trends (when prices increase), downward trends (when prices decrease), and lateral trends (when prices remain relatively stable).
Technical Indicators: These are mathematical and statistical tools that are used to provide additional information about the likely direction of prices. They can be based on data such as trading volumes, moving averages, oscillators, etc.
Supports and Resistances: Support levels represent price thresholds below which it is difficult for an asset to fall, while resistances are thresholds above which it has difficulty moving.
Volume Analysis: It involves examining the trading volume of a financial asset, which can provide insights into the strength or weakness of a trend.
Chart Patterns: Technical analysts look for recurring patterns on charts, such as heads and shoulders, triangles, flags, etc., which can provide clues about future price movements.
Oscillator Analysis: These indicators are used to gauge how overbought or oversold an asset is, which may suggest an impending trend reversal.
It is important to note that technical analysis generally does not take into account the fundamental factors of an asset (such as earnings, financial ratios, economic events, etc.). Therefore, some investors prefer to use a combination of technical analysis and fundamental analysis to make investment decisions.
Each technical analyst may have their own approach and interpretation of data, which means that there are different schools of thought and strategies in the field of technical analysis. This does not constitute investment advice in any way. The result of all analyzes will depend on the type of investor profile. Don't just rely on the information that comes to you, go find it yourself.
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