Technical Analysis Suitable for Beginners
Technical analysis is an analytical technique that analyzes price fluctuations within a certain time span. From these price movements, traders observe certain patterns that can be used as a basis for buying or selling. Generally, the use of technical analysis is a trader who wants to take advantage of price fluctuations to make a profit. Technical analysis can be used on all financial products that have price data.
Technical analysis always uses charts (charts) to perform the analysis. Therefore, traders who purely adhere to technical aspects are called chartists. In the past, price charts were made by traders themselves. Fortunately, now there is a lot of software that makes it easier for traders, can display price charts in real time.
Technical Analysis Function
Detecting Current Trends or Patterns
Technical analysis is used to analyze prices based on past price data. With this data, the analysis tries to see if there is a trend or price pattern that occurs. Usually traders follow the pattern that occurs. For example, when the price tends to rise, the trader opens a buy position. Or vice versa when the price tends to fall, the trader opens a sell position. To determine the trend, you can use tools or indicators.
Help Provide Buy or Sell Signals
Technical analysis can help traders to make buy or sell decisions. Usually use the help of indicators.
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.
Trends
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 prices from continuing to rise.
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