Technical analysis
Technical analysis
Technical analysis is used to predict future price movements based on systematic research, analysis and evaluation of past and current data. It is used for all financial products, including securities , futures and interest rate products. Technical analysis uses data made the market such as price , volume, volatility , number of open contracts on the market, or intermarket correlation. Technical analysis is therefore not deal with such events and facts, such as the publication of economic data, market sentiment , political situation , fiscal policy and state economic environments. The aim of technical analysis is about identifying future price trends, identify potential end and turn the trend. Like weather forecasting, technical analysis does not lead to certain predictions. However, if used correctly, can dramatically reduce the percentage error of prediction. Therefore serves investors to determine what is likely. Demand and supply is influenced by many factors and analysts who use technical analysis believe that all events and information affecting the market are already included in the price. It thus created a fair price and thus the basis for technical analysis. Prices do not move randomly, but it follows trends. The use of technical analysis would not be appropriate or profitable at random price movements. Traders believe that they can recognize a trend in his line to make a profitable trade with the trend to continue. Because technical analysis can be applied to many time frames, it is possible to spot trends in the short, medium and long term. In addition, the application of technical analysis relies on the assumption that history tends to repeat . This is due to the behavior of market players, ie people who behave as emotional beings. Their reactions to stimulations are often repeated, and therefore it is possible to find some regularities. The final price is created with the help of supply and demand. In a situation where demand is higher than supply, expected growth rates. Conversely, in the situation where a lower demand than supply, expected price drop. Technical analysis depends on the price and only on the price. While fundamental analysis focuses on the question of why what happens, engineers are asking what is happening and it does not matter to them why this is happening. There are many factors that can affect the price and their interpretation is very difficult. It’s more buyers (demand) and less selling (offer), what pushes the price up. The value is ultimately the only thing for which traders are willing to pay. Types of graphsIn technical analysis and trading itself is commonly used by large number of variations and combinations of characteristics. The most basic element is but the chart itself. The horizontal axis shows the time and it can be vertical as crowns, dollars and euros, as well as point. It shows us where it is the price or value is or was situated.
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