Learn Technical Analyzing of Stocks
Before knowing the tips of analyzing we must know what marketing analysis today’s technical analyst of stocks prepares a chart or a graph is and by using mathematical formulas they usually analyze market trends, and this is what said to be technical marketing analysis. Now let’s check out the necessary steps for technical analysis:
STUDY LONG TERM CHARTS: the first step is to prepare a table which carries details of the weekly, monthly and yearly analysis. For a better and long term perspective in the market, a large scale map is required to have a clear visibility of market. After completing the long term plan, one must check for daily intro day chart. It’s necessary for any market whether it’s long term or short term to do better the trading must be in the same direction as the intermediary.
DETERMINE AND FOLLOW THE TREND: in the market, it depends on its size if it’s long term, short term or intermediate. You have first to make a choice which trend you are going to follow, and then you will have to look for the chart and be sure for what you are trading is in trend. For medium business, you have to use the daily and weekly chart. But for any trade, you just have to choose the appropriate table according to the trend and commerce. At last, you can go for long term chart and then short term chart just to check if you are on right business.
FIND small AND HIGH LEVELS: the next thing you need to do is you need support level because once resistance is broken, you will need help to understand how trends change and what’s new for the market. You have to follow the old pattern was once high, but now it’s small in the same way the little trend becomes high in demand. It all depends on selling and patterns ‘the old “small” may become the new “high.”
MEASURING OF PERCENTAGE: market usually retraces what is down in trend and what is again back in trend, and it all depends on the previous years of trend. The correction needs to be done on the following trends and existing trend in simple percentage calculation. And the maximum time it is seen the retracement is two-thirds.
DRAW THE LINES OF TREND: one of the simplest and most effective tools for charting is trend lines. Two point on charts and a straight edge is required to make trend lines upside drawn lines indicates two successive lows and down side lines indicates two successive peaks, and it is necessary the solid lines touch at least three times.
FOLLOWING THE AVERAGES: to know the buy and sell objectives moving averages are provided. Moving averages will confirm the changes in trends if it’s still in motion or not find trading signals a combination of the chart is the popular way. Most popular combinations are 4–9 days, 9–18 days. These signals are passed once the average line crosses the longer one. Moving averages are said to be the best trading lines indicator.
TREND OR NOT A TREND: use of ADX indicator determines if it’s trending or a trading phase. If the ADX line seems to be moving upwards, then it shows the presence of strong trend, and if the line is falling, then it means it’s its phase of the trading and not in trending.
KNOW THE CONFIRMING SIGNS: the most important confirming indication is volume one should not ignore it. Rising volume denotes new money which is supporting the prevailing trend and slowing down volume indicates a warning that the trend is near completion.
Analyzing technical marketing is a kind of skill which is improved by the experience you gain and the study you do so it is always said for a learner to be a student and always keep learning.