Mon, 04 Sep 2006 13:29:22 MDT
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Written by Dean Kleb
How does the professional trader organise the endless stream of price data into a logical format that doesn't require rocket science to interpret? Technical analysis is an extremely visual medium and this one fact alone sets it apart from the colder method of fundamental analysis. Price charts allow traders to look at past and present price action in order to make reasonable decisions and intelligent choices.
The oldest form of interpreting price charts is PATTERN ANALYSIS. This method gained popularity through both the writings of Charles Dow as mentioned earlier and Technical Analysis of Stock Trends, a classic book written on the subject just after World War II.
Pattern analysis gains its power from the tendency of charts to repeat the same formations over and over again. These patterns have been categorised over the years as having a bullish or bearish bias. Some well-known ones include HEAD & SHOULDERS, TRIANGLES, RECTANGLES, WEDGES, DOUBLE & TRIPLE TOPS, DOUBLE & TRIPLE BOTTOMS, FLAGS and PENNANTS. Also, basic SUPPORT & RESISTANCE and TREND-LINES have great importance on price action.
Mon, 04 Sep 2006 13:24:43 MDT
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Written by Dean Kleb
A trend reflects the average rate of change in price over time. Trends exist in all time frames and all markets. Day traders may attempt to establish and take action in the short-term trends to within minutes. Position and swing traders may attempt to establish and take action in the intermediate trends of days or weeks and the long-term investors watch trends that persist for many months or even years.
Mon, 04 Sep 2006 13:19:47 MDT
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Written by Aboutcurrency
Technical analysis is the study and analysis of market price movement in order to forecast future market price movement. Technical analysis does not concern itself with a currency's basics or fundamentals.
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