🌠 Methods of Technical Analysis 🌠

٢٣ أبريل ٢٠٢٠

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And we look further at the technical analysis.👌🏻 Today we'll analyze the main methods of technical analysis.
You can choose for yourself the most convenient. Further, we'll consider in more detail each of them)
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Graphical technical analysis is the analysis of various market graphical models formed by certain patterns of price movements on charts, with the goal of assuming the likelihood of a continuation or change of an existing trend.

👉🏻👉🏻👉🏻Classical figures of technical analysis are divided into:

⚡confirming a trend reversal
⚡confirming the continuation of the trend
⚡confirming the possibility of both a reversal and a continuation of the trend


👉🏻👉🏻👉🏻The main tool of analytical methods is an indicator, which in turn is a set of functions from one or more basic time series, with a specific time "window".

⚡Trend indicators

These indicators include indicators used to measure the trend, its strength and duration. A classic example of trend-confirming indicators is the moving average. This class includes such well-known indicators as MACD, Directional Movement, Parabolic and others.

⚡Volatility indicators

Indicators of the second category are used to measure the measure of price volatility of the underlying a sset. Variability is a concept that describes the magnitude of daily price fluctuations independent of the main direction. These indicators include: Chaikin's Volatility, Standard Deviation, Bollinger Bands.

⚡Moment indicators

Representatives of this category are used to measure the rate of price change over a certain period of time. These are, first of all, Momentum Indicator, Relative Strength Index (RSI) and Price Rate-Of-Change (ROC).

⚡Cycle indicators

These indicators are used to identify cyclic components and their length. These are Fibonacci Time Zones, MESA Sine Wave Indicator, and others. Such indicators work well only on sideways trends. These indicators are very important for futures traders working in commodity markets for sugar or oil grains - in markets with a very high cyclical component.

⚡Market strength indicators

It uses either the volume of transactions or the number of open positions as one of the basic independent variables. Indicators of this category, based on a series of volume data, give signals about the strength of the current trend. Indicators in this category include On Balance Volume, Volume Accumulation, and others.

Wave analysis is based on the notion that markets follow certain patterns called waves, which are the result of the natural rhythm of mass psychology that exists in all markets. There are several advanced wave theories. The essence of the Elliott Waves is that prices alternate between the phases of the momentum, which establish the trend, and the phases of correction, which adjust the trend. The simplest and clearest description is that the pulse phase contains 5 smaller waves, and the correction phase contains 3 smaller waves. NeoWave is an extension of Elliott Wave concepts to reduce subjectivity.

In fact, wave analysis has nothing to do with the market. At least in the modern world. This theory once worked, but not now. Although it attracts a lot of people with its simplicity and visibility. Now you will not find two wave operators that would give the same market assessment and forecasts.
So many directions and methods of wave analysis have formed today. Wave analysis is an artificially invented method for predicting markets, that is, not natural even for human behavior. If you use it, then be extremely careful. To say that wave analysis does not work is too subjective. Each for himself decides what and how to use. Right or wrong - the market will judge by adding or taking money to the account.

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