Definition of technical analysis:
Technical analysis is the study of the market (or price) by the use of charts Charts, and so to predict the movement of the market (price) future
Philosophy of Technical Analysis:
Technical analysis is built on three assumptions, namely:
1 - the market settled everything
2 - Prices move in trends
3 - History repeats itself
1 - the price settled everything:
This hypothesis represents the cornerstone of technical analysis. Believes analysts technicians that anything that can affect the price reflected the market price, whether this thing related to analysis of the basic (economic analysis and analysis of the fundamentalist and the news of the market) or political events or Balsekologih or otherwise, so the study of price movement is all that is required.
Thus, the technical analyst studies the fundamental analysis, but indirectly.
Most agree that the local technicians on the forces of supply and demand, basic economic analysis of the market is leading to make the market are either bullish or bearish. Fees graphs (used for technical analysis) do not make markets move up or down, but these fees reflect the psychology of the market, whether for the benefit of the upward trend or downward trend.
Analysts and technicians interested in the reasons for their expectations high or low the market, because each affects the market price reflected in this price, all you want is to study the movement of that price. Through the study of price charts and technical indicators in support of this study, he can count a technical analyst to know the direction that is expected to take the market. And all technical analysis tools that will be explained in detail later are tools used by technical analyst to assist in the analysis of the market and predicted his future.
2 - Prices move in trends:
The concept of direction is essential in technical analysis, markets are moving in the direction of real, and the purpose of charting the price of the market on a graph is to identify the direction of the market in its early stages, for the purpose of trading in the same direction as the market.
It is possible to infer the validity of the hypothesis that prices move in trends of Newton's First Law of the movement, which is that the probability of continuation of the trend in the movement more than the possibility of reflection. Thus we can say that the trend will continue in his movement in the same direction until a reversal.
3 - History repeats itself:
Most of the techniques and technical analysis tools that are used in the study of the market is the study of the psychology of human also, for example: models of price of the graphs (which have been identified and classified during the past hundred years) reflect certain images that appear on graphs of prices.
It reveals the psychology of the market towards the upward trend or downward trend.
Since these models have had a good performance in the past, it is supposed to continue the same quality performance in the future, because it depends on the study of human psychology, which tend not to change, and said that the key to understanding the future lies in the study of the past.
Flexible and adapt to technical analysis:
Of the most strong points that distinguish the technical analysis is the adaptation to any medium of media circulation, where there is no financial market can not apply the principles and rules of technical analysis, whether this was the financial market stock market or a market share of world currencies (Forex) or market contracts future.
Can the analyst who relies on technical analysis to follow many markets as he wants, the analyst who relies on fundamental analysis (economic analysis and the fundamentalist and the news of the market) it can not, because the amount of data the huge deal with it and analyzing of depends on fundamental analysis.
Also has a technical analyst with a broad picture and the horizon where he could pursue more than one market and have an excellent background for the performance of markets in general, nor has the vision to be narrow, which produces the follow-up single market.
Since there are many markets that are related to economic ties, the price movement in one market could give indications of value to the future direction in another market.
Application of technical analysis in different markets:
Principles of technical analysis is applicable in the stock markets and futures markets and foreign exchange markets (Forex) trading and also in the option contracts.
Application of technical analysis on the different time frames:
Of the most important advantages of technical analysis is the ability to apply the principles of the tire of a different time, whether used technical analyst changes (in prices) that occur during the day (part time during the day interday time frame) as part of four hours of 4H for the purpose of daily circulation, or for the purpose of trading on the the medium term on the daily time frame, the same rules will apply in both cases.
Some would say that he must use fundamental analysis in the process of long-term prediction and that technical analysis is not useful unless it was used in the short term, there are those who oppose this and say that technical analysis has proven reliability when applied in the expectation over the long term, using graphs weekly and monthly, but I see that it must incorporate fundamental analysis with technical analysis to predict the movement of prices in the long term (weeks or months).
Economic Forecasting:
Plays a Technical role in Economic Forecasting, for example, tells us the direction of commodity prices into inflation, and give us the direction of these price signals about the strength or weakness of the economic situation, which indicates high commodity prices to the strength of the economy and increase inflation, while indicating low commodity prices, slowing economic growth and inflation. The direction of commodity prices affect the direction of interest rates
Technical analysis is the study of the market (or price) by the use of charts Charts, and so to predict the movement of the market (price) future
Philosophy of Technical Analysis:
Technical analysis is built on three assumptions, namely:
1 - the market settled everything
2 - Prices move in trends
3 - History repeats itself
1 - the price settled everything:
This hypothesis represents the cornerstone of technical analysis. Believes analysts technicians that anything that can affect the price reflected the market price, whether this thing related to analysis of the basic (economic analysis and analysis of the fundamentalist and the news of the market) or political events or Balsekologih or otherwise, so the study of price movement is all that is required.
Thus, the technical analyst studies the fundamental analysis, but indirectly.
Most agree that the local technicians on the forces of supply and demand, basic economic analysis of the market is leading to make the market are either bullish or bearish. Fees graphs (used for technical analysis) do not make markets move up or down, but these fees reflect the psychology of the market, whether for the benefit of the upward trend or downward trend.
Analysts and technicians interested in the reasons for their expectations high or low the market, because each affects the market price reflected in this price, all you want is to study the movement of that price. Through the study of price charts and technical indicators in support of this study, he can count a technical analyst to know the direction that is expected to take the market. And all technical analysis tools that will be explained in detail later are tools used by technical analyst to assist in the analysis of the market and predicted his future.
2 - Prices move in trends:
The concept of direction is essential in technical analysis, markets are moving in the direction of real, and the purpose of charting the price of the market on a graph is to identify the direction of the market in its early stages, for the purpose of trading in the same direction as the market.
It is possible to infer the validity of the hypothesis that prices move in trends of Newton's First Law of the movement, which is that the probability of continuation of the trend in the movement more than the possibility of reflection. Thus we can say that the trend will continue in his movement in the same direction until a reversal.
3 - History repeats itself:
Most of the techniques and technical analysis tools that are used in the study of the market is the study of the psychology of human also, for example: models of price of the graphs (which have been identified and classified during the past hundred years) reflect certain images that appear on graphs of prices.
It reveals the psychology of the market towards the upward trend or downward trend.
Since these models have had a good performance in the past, it is supposed to continue the same quality performance in the future, because it depends on the study of human psychology, which tend not to change, and said that the key to understanding the future lies in the study of the past.
Flexible and adapt to technical analysis:
Of the most strong points that distinguish the technical analysis is the adaptation to any medium of media circulation, where there is no financial market can not apply the principles and rules of technical analysis, whether this was the financial market stock market or a market share of world currencies (Forex) or market contracts future.
Can the analyst who relies on technical analysis to follow many markets as he wants, the analyst who relies on fundamental analysis (economic analysis and the fundamentalist and the news of the market) it can not, because the amount of data the huge deal with it and analyzing of depends on fundamental analysis.
Also has a technical analyst with a broad picture and the horizon where he could pursue more than one market and have an excellent background for the performance of markets in general, nor has the vision to be narrow, which produces the follow-up single market.
Since there are many markets that are related to economic ties, the price movement in one market could give indications of value to the future direction in another market.
Application of technical analysis in different markets:
Principles of technical analysis is applicable in the stock markets and futures markets and foreign exchange markets (Forex) trading and also in the option contracts.
Application of technical analysis on the different time frames:
Of the most important advantages of technical analysis is the ability to apply the principles of the tire of a different time, whether used technical analyst changes (in prices) that occur during the day (part time during the day interday time frame) as part of four hours of 4H for the purpose of daily circulation, or for the purpose of trading on the the medium term on the daily time frame, the same rules will apply in both cases.
Some would say that he must use fundamental analysis in the process of long-term prediction and that technical analysis is not useful unless it was used in the short term, there are those who oppose this and say that technical analysis has proven reliability when applied in the expectation over the long term, using graphs weekly and monthly, but I see that it must incorporate fundamental analysis with technical analysis to predict the movement of prices in the long term (weeks or months).
Economic Forecasting:
Plays a Technical role in Economic Forecasting, for example, tells us the direction of commodity prices into inflation, and give us the direction of these price signals about the strength or weakness of the economic situation, which indicates high commodity prices to the strength of the economy and increase inflation, while indicating low commodity prices, slowing economic growth and inflation. The direction of commodity prices affect the direction of interest rates
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