1 Moving Average

If you believe in the tenet of technical analysis that "the trend is your friend", then you will benefit greatly from the moving average. The moving average shows The average price at a specific time during a specific period. They are called "moving" because they are measured over the same time and reflect the latest average.

One of the shortcomings of moving averages is that they Lags the market and therefore does not necessarily serve as a sign of a trend change. To address this issue, using a shorter period moving average of 5 or 10 days will better reflect recent price movements than a 40 or 200 day moving average. .Alternatively, moving averages can also be used by combining two averages with different time spans. Whether using a 5- and 20-day moving average, or a 40- and 200-day moving average, buy signals typically average over the shorter term The sell signal will be detected when the short-term average line crosses the longer-term average line upward. On the contrary, the sell signal will be prompted when the shorter-term average line crosses the longer-term average line downward.

2. Support and Resistance

Support and resistance levels are points on a chart that experience sustained upward or downward pressure. Support levels are usually the lowest point of any chart pattern (hourly, weekly, or yearly), while resistance levels are The highest points (peaks) on a chart. When these points show a reoccurring trend, they are identified as support and resistance. The best times to buy/sell are near support/resistance levels that are difficult to break. Once these levels are broken, they tend to act as reverse barriers. Thus, in a rising market, a broken resistance level may act as support for an upward trend; however, in a declining market, once a support level is broken, It will turn into resistance.

3. Lines and channels

Trend lines are a simple and practical tool in identifying the direction of market trends. An upward straight line consists of at least two consecutive lows. Points are connected. Naturally, the second point must be higher than the first. The extension of the straight line helps determine the path the market will move along. Uptrends are a specific method used to identify support lines/levels. Conversely, Basically, a downward line is drawn by connecting two or more points. The volatility of a trading line is partly related to the number of connecting points. However, it is worth mentioning that the points do not have to be too close together. Channels are Defined as an upward trendline that is parallel to the corresponding downward trendline. The two lines can represent an upward, downward, or horizontal corridor of price. A common property of a channel that supports a trendline connection point is that it should be located between the two connection points of its opposite line. Time.

4. Discover trends

Regarding technical analysis, the first thing you may hear is the following motto: "The trend is your friend". Finding the dominant trend will help You have an overall view of the market and can give you sharper insights - especially when shorter-term market fluctuations disrupt the overall market. Weekly and monthly chart analysis is best used to identify longer-term trends. Once By discovering the overall trend, you can choose the trend within the time span you wish to trade. This way, you can buy or sell in uptrends and sell in downtrends.