2 Types of Prices For Technical Analysis

Technical analysis is an analytical technique to analyze price fluctuations in a certain time range which is presented in the form of a graph or chart. Technical analysis has many indicators that can be used to sharpen and simplify analysis. There are 3 terms that a trader must learn first before a trader learns about technical analysis in depth. The three terms are trend, chart, and support and resistance. These three terms will often appear when traders use technical analysis.

Trends

Trend is the direction of the tendency of price movements in a certain period of time. According to the Dow theory, prices move based on three kinds of trends, namely bullish (uptrend), bearish (downtrend), and sideways.

Chart

In technical analysis, charts are used to see the movement of the price value of a stock that occurs in the time period that the trader wants. Several types of charts that can be used in technical analysis include line charts, bar charts, candlestick charts etc.

Support and Resistance

Support and resistance are the most common and frequently used methods and indicators in technical analysis.

Support is the price point below, where at that level the price decline has a high probability of being stuck and has a great potential for a rebound.

Resistance is the upper price point where at that level the price increase has a high probability of being stuck and has great potential to reverse down (correction).

There are many ways to determine support and resistance levels, namely Fibonacci retracements, moving averages, trendlines, and pivot points.

The appropriate technical analysis is of course different for everyone, because every trader has different goals. Both fundamental analysis and technical analysis, both analyzes have their respective advantages and risks because many traders combine fundamental analysis and technical analysis.


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