When talking about finance, technical analysis is a type of method for security analysis in order to forecast the direction of all the prices through studying the past data of market, usually the price and the volume. Two common fields that are using this kind of method are the behavioral economics and the quantitative analysis. This method has become one of the aspects of active management and also, its efficacy, together with fundamental analysis is being debated by market hypothesis in which it states that the prices are very unpredictable.
The job of fundamental analysts is to examine the quality, earnings, ratio, dividends, new products, assets, research, etc. Many methods are already being used by most people but the most common is the chart. Through using the charts, to do futures technical analysis is made so much easy to identify the patterns of the prices and also the market trends in financial market and to exploit the patterns.
Patterns such as double top reversal or bottom reversal and the head patterns and shoulders patterns are searched by technicians for them to study on the technical indicators, for moving averages, and for looking other forms like balance days, flags, cup pattern and handle pattern, and pennants. Other used indicators are price mathematical transformation. Transformation includes down and up volumes, advance and decline data, and other input types.
And also, they look at the relationships in between the indices of volume and price and as well as indicators. Examples for this are MACD, moving averages, and relative strength indices. Some other indicators that are also important are bear or bull ratios, implied volatility, call or put ratios, short interest, etc.
A lot of techniques are being used in technical method. One of it is the subjective judgment. This is done in order to decide on which pattern an instrument will reflect in a given period of time and on what will be the interpretation of that certain pattern. Others use either the mechanical approach or the systematic approach for the identification and the interpretation of a pattern.
As a contrast, a fundamental method studies on economic factors which can influence the decision of investors of pricing financial markets. The technical procedure stated that prices are reflected already to fundamental factors. Other traders are using either of the methods and others are using both.
This method is widely used by traders and some other financial professionals. Other people that uses it are market makers, day traders, and pit traders. But some people have said that it cannot really predict the future, instead, it can help identify trading opportunities since the evidences on this are inconsistent and sparse.
The main principle for this method or procedure is reflecting the prices to relevant information. They do this in order for them to analyze not on external drivers but on looking at the history for security trading pattern. Drivers are news, fundamental, and economic events.
There are three basic principles that the analysts believe. These include market action that discounts everything, prices will move in trends, and history will tend to repeat itself. Thus, the action of price will tend to repeat because the investors will continue tending towards the patterned behaviors.
The job of fundamental analysts is to examine the quality, earnings, ratio, dividends, new products, assets, research, etc. Many methods are already being used by most people but the most common is the chart. Through using the charts, to do futures technical analysis is made so much easy to identify the patterns of the prices and also the market trends in financial market and to exploit the patterns.
Patterns such as double top reversal or bottom reversal and the head patterns and shoulders patterns are searched by technicians for them to study on the technical indicators, for moving averages, and for looking other forms like balance days, flags, cup pattern and handle pattern, and pennants. Other used indicators are price mathematical transformation. Transformation includes down and up volumes, advance and decline data, and other input types.
And also, they look at the relationships in between the indices of volume and price and as well as indicators. Examples for this are MACD, moving averages, and relative strength indices. Some other indicators that are also important are bear or bull ratios, implied volatility, call or put ratios, short interest, etc.
A lot of techniques are being used in technical method. One of it is the subjective judgment. This is done in order to decide on which pattern an instrument will reflect in a given period of time and on what will be the interpretation of that certain pattern. Others use either the mechanical approach or the systematic approach for the identification and the interpretation of a pattern.
As a contrast, a fundamental method studies on economic factors which can influence the decision of investors of pricing financial markets. The technical procedure stated that prices are reflected already to fundamental factors. Other traders are using either of the methods and others are using both.
This method is widely used by traders and some other financial professionals. Other people that uses it are market makers, day traders, and pit traders. But some people have said that it cannot really predict the future, instead, it can help identify trading opportunities since the evidences on this are inconsistent and sparse.
The main principle for this method or procedure is reflecting the prices to relevant information. They do this in order for them to analyze not on external drivers but on looking at the history for security trading pattern. Drivers are news, fundamental, and economic events.
There are three basic principles that the analysts believe. These include market action that discounts everything, prices will move in trends, and history will tend to repeat itself. Thus, the action of price will tend to repeat because the investors will continue tending towards the patterned behaviors.
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