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Technical analysis is the study of stock prices and patterns to predict future market movements. It is based on the assumption that the market has a "memory" and that price patterns tend to repeat themselves over time.
Technical analysts use a variety of tools and techniques to identify trends, patterns, and potential trading opportunities. These tools and techniques include:
Volume: Volume is the number of shares of a stock that are traded in a given period of time. It can be used to gauge the strength or weakness of a trend. Technical charts: Technical charts show the price movements of a stock over time. There are a variety of different types of technical charts, such as candlestick charts, line charts, and bar charts. Trading indicators: Trading indicators are mathematical formulas that can be used to identify trends, patterns, and potential trading opportunities. Some popular trading indicators include moving averages, MACD, and RSI. Illustration tools: Illustration tools can be used to draw trend lines, support and resistance levels, and other technical indicators on a chart.
Technical analysis can be a complex and challenging subject, but it can be a valuable tool for traders and investors. By understanding the basics of technical analysis, traders and investors can make more informed decisions about their trading and investment activities.
Imagine you are a detective trying to solve a crime. You have access to all of the evidence, including the crime scene, witness statements, and physical evidence. You use this evidence to piece together what happened and to identify the perpetrator.
Technical analysis is similar to detective work in that it involves using all of the available information to identify trends and patterns. Technical analysts use this information to predict future market movements and to identify potential trading opportunities.
Here is the Complete Guide for Technical Analysis: https://www.finowings.com/technical-analysis/basic-technical-analysis/beginner-guide-to-technical-analysis/
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