Terms in Technical Analysis
Technical analysis is a way of analyzing asset price movements in financial markets using statistical tools, such as charts and mathematical formulas. The purpose of studying technical analysis is so that investors or traders can assess current market conditions based on price history in the past, as well as provide an overview or prediction of future market movements.
Technical analysis can be used for both investors and traders, although their goals are different. For investors, technical analysis can help to determine when is the right time to buy a stock for long-term storage. Meanwhile, for traders, of course, technical analysis is used to determine selected stocks that have the potential to be profitable in the short term. The portion of the use of technical analysis will be used more by traders than investors. Technical analysis plays an important role in showing stock price charts, trends that occur, support and resistance, as well as the right time to sell or buy with the help of indicators. These are the terms in technical analysis:
Chart
Chart is a graphic display that represents price movements. Inside there is a candlestick that shows the daily movement of prices.
Trend
Trend is the direction of the tendency of price movements in a certain period of time. Divided into rising (bullish), declining (bearish) and horizontal (sideways) trends.
Support and Resistance
Support is the lowest limit that keeps the price from falling again. Meanwhile, resistance is the highest limit that keeps the price from rising.
Indicators
Indicators themselves are tools to determine entry and exit
points. The indicators that are often used are moving averages, stochastic,
MACD, and Bollinger bands. Using technical analysis is not as difficult as one
might think.
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