⭐Technical Analysis (TA)⭐ 👋🏻Guys, we recently finished considering the basic trading methods. 👇🏻
I suggest starting a new section. 💪🏻One of the most important for the trader. ✌🏻Fundamentals of Technical Analysis (TA). ✌🏻I am sure that it would be very important for beginners, and for other traders too. Let's start from the beginning.✈
💫 Let’s Go 💫
The essence of technical analysis is, that people, from a psychological point of view, behave the same way in the markets and in ordinary life.
At the same time, models of people's behavior are drawn on the markets, which are repeated constantly.
The task of technical analysis is to assess the future state of the market from an analysis of its past state.
🗝🗝🗝Key Points🗝🗝🗝
Technical analysis (TA) is a study of market dynamics, most often through charts, in order to predict the future direction of price movements. In this technical theory, as in any theory. There are basic postulates.
1️⃣ Axiom - Prices include everything
Any factor affecting the price (for example, the market price of a product) - economic, political, psychological - is taken into account in advance and reflected in its chart.
2️⃣ Axiom - Price Movement Subjected to Trends
This assumption became the basis for the creation of all methods of technical analysis. The main task of technical analysis is to determine the direction of price movement for use in trade.
3️⃣ Axiom - History Repeats
Analysts suggest, that if certain types of analysis worked in the past, then they will work in the future, as this work is based on sustainable human psychology.
Technical analysis also allows you to understand the general state of the market at the moment.
Technical analysis as a whole can be defined as a method of forecasting prices based on mathematical, rather than economic calculations.
Technical analyst reveals market sentiment, setting himself a set of the following goals:
⭐1. Assessment of the current direction of price dynamics, that is, the identification of a trend. The following options are possible here:
✔ up movement
✔ down movement
✔ flat (accumulation / distribution)
⭐2. Assessment of the term and period of validity of this area. May be:
✔ short-term trend
✔ long-term trend
⭐3. Estimation of the amplitude of price fluctuations in the current direction:
✔slight change in course
✔ strong change in course
🙃🙃🙃If this introductory post interested you, put me like and subscribe.❤
🥰😍🥰A lot of interesting things awaits us further.
Soon you’ll know about:
🔖Graphic methods
🔖Analytical methods
🔖Cycle theory
🔖Wave analysis
🔖Resistance / support levels
🔖Channel - element of technical analysis
🔖 Fibonacci levels
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