What is Technical Analysis | Technical analysis Tools

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 WHAT IS TECHNICAL ANALYSIS & ITS TOOLS

In finance, technical analysis is a security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. While fundamental analysts examine earnings, dividends, new products, research and the like, technical analysts examine what investors fear or think about those developments and whether or not investors have the wherewithal to back up their opinions, these two concepts are called psych (psychology) and supply/ demand. Technicians use many techniques, one of which is the use of charts. Using charts, technical analysts seek to identify price patterns and market trends in financial markets and attempt to exploit those patterns. Technicians use various methods and tools, the study of price charts is but one. 
 
Basics of Technical Analysis
In this article you will come to know various tools of Technical Analysis, used in stock market. Let’s proceed:-

WHAT ARE THE CONCEPTS OF TECHNICAL ANALYSIS

  1. Support and resistance 
  2. Trend line (technical analysis) 
  3. Breakout (technical analysis) 
  4. Market trend 
  5. Dead cat bounce 
  6. Elliott wave principle 
  7. Fibonacci retracement 
  8. Pivot point 
  9. Dow Theory

WHAT IS CHARTS AND ITS TYPE

  1. Candlestick chart 
  2. Open-high-low-close chart 
  3. Line chart 
  4. Point and figure chart 
  5. Kagi chart 

WHAT ARE CHART PATTERNS

  1. Head and shoulders (chart pattern) 
  2. Cup and handle 
  3. Double top and double bottom 
  4. Triple top and triple bottom 
  5. Broadening top 
  6. Price channels 
  7. Wedge pattern 
  8. Triangle (chart pattern) 
  9. Flag and pennant patterns 
  10. The Island Reversal 
  11. Gap (chart pattern)

TYPES OF CANDLESTICK CHART PATTERNS  

  1. Doji 
  2. Hammer (candlestick pattern) 
  3. Hanging man (candlestick pattern) 
  4. Inverted hammer 
  5. Shooting star (candlestick pattern) 
  6. Marubozu 
  7. Spinning top (candlestick pattern) 
  8. Three white soldiers 
  9. Three Black Crows 
  10. Morning star (candlestick pattern) 
  11. Hikkake Pattern

WHAT ARE TREND INDICATORS AND ITS TYPE

  1. Average Directional Index 
  2. Ichimoku Kinkō Hyō 
  3. MACD 
  4. Mass index 
  5. Moving average 
  6. Parabolic SAR 
  7. Trix (technical analysis) 
  8. Vortex Indicator 
  9. Know Sure Thing (KST) Oscillator

WHAT ARE MOMENTUM INDICATORS AND ITS TYPE

  1.  Relative Strength Index 
  2.  Stochastic oscillator 
  3.  Williams %R

WHAT ARE VOLUME INDICATORS AND ITS TYPE

  1. Accumulation/distribution index 
  2. Money Flow Index 
  3. On-balance volume 
  4. Volume Price Trend 
  5. Force Index 
  6. Negative volume index 
  7. Ease of movement

WHAT ARE VOLATILITY INDICATORS AND ITS TYPE

  1. Average True Range 
  2. Bollinger Bands 
  3. Donchian channel 
  4. Standard deviation

OTHER INDICATORS

  1. Advance decline line 
  2. Commodity Channel Index 
  3. Coppock curve 
  4. Keltner channel 
  5. McClellan Oscillator 
  6. Ulcer Index 
  7. Ultimate Oscillator

CHARTING TERMS USED IN TECHNICAL ANALYSIS

 Resistance : A price level that may prompt a net increase of selling activity

 Support : A price level that may prompt a net increase of buying activity

 Breakout :The concept whereby prices forcefully penetrate an area of prior support or resistance, usually, but not always, accompanied by an increase in volume.

 Trending :The phenomenon by which price movement tends to persist in one direction for an extended period of time.

Average true range : Averaged daily trading range, adjusted for price gaps.

Chart pattern : Distinctive pattern created by the movement of security prices on a chart

 Dead cat bounce : The phenomenon whereby a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement.

Fibonacci ratios : Used as a guide to determine support and resistance

Momentum : The rate of price change

Cycles : Time targets for potential change in price action (price only moves up, down, or sideways)

Open-high-low-close chart :OHLC charts, also known as bar charts, plot the span between the high and low prices of a trading period as a vertical line segment at the trading time, and the open and close prices with horizontal tick marks on the range line, usually a tick to the left for the open price and a tick to the right for the closing price.

Candlestick chart : Japanese origin and similar to OHLC, candlesticks widen and fill the interval between the open and close prices to emphasize the open/close relationship. In the West, often black or red candle bodies represent a close lower than the open, while white, green or blue candles represent a close higher than the open price.

 Line chart : Connects the closing price values with line segments.

Overlays: Overlays are generally superimposed over the main price chart. Like:-

• Resistance — a price level that may act as a ceiling above price

Table of Contents

• Support — a price level that may act as a floor below price

• Trend line — a sloping line described by at least two peaks or two troughs

• Channel — a pair of parallel trend lines

Parabolic SAR : Wilder’s trailing stop based on prices tending to stay within a parabolic curve during a strong trend.

Pivot point : Derived by calculating the numerical average of a particular currency’s or stock’s high, low and closing prices.

BOTTOM LINE

I hope you have learnt a lot by reading this article. In future also you will get such type article related to stock market learning. if you have any suggestion kindly post in comment box. Thank you.

Please this also:-https://www.knowledgecredo.com/2022/09/hilega-milega-trading-system-developed.html

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