What came 1st the chicken or the egg? The point can be debated all day and it becomes nowhere. Feel that this century old query is quite like the technical research question, what came 1st, price action or the indicator in the right section?
This is what used to bog my mind with questions on technical research on my trading charts. If the price is moving higher breaking thru resistance, the oscillator would be pointing to a sell signal. If we blindly ignored fact we might have sold too early and been in a hill of difficulty.
My point here is that it doesn’t move the price in one or more direction, but I just wish it probably did. It might make our life as traders far easier and plenty more lucrative.
Technical analysis can be helpful for traders to time our entries and exits of the trade. It should not be used alone as it can often be a little confusing info if not used correctly.
First we want to identify the details of basic technical research of your fave stock, bond, etf ( exchange traded fund ), commodity and foreign currency. They’re support, resistance, volume, stochastic and eighteen bar moving average.
* Support is when the cost of a stock has stopped declining. No new lows have been made in the last few trading sessions, and price has moved in a sideways direction.
* Resistance is the area of the chart where the price stops inflating. No new highs have been met in the last few trading sessions and the price is in a sideways direction.
* Volume is the quantity of shares or contracts which have been traded on a regular, weekly or mins chart and it’s also called liquidity. You wish to trade stocks that have high volume good interest from the general public due to the simplicity of getting out and in when necessary.
* Stochastic are oscillators and there are plenty that we are able to use on our charts, they essentially let us know all the same thing, price has moved into a purchase or sell area. The indicator tells us the stock has become overbought or oversold. Price may stay in that area for some time, it does not mean that we blindly enter into a position because stochastic has moved into the buy section. It should however alert us to go looking for a long or short position shortly.
* Eighteen bar moving average takes the present session on open high low close and compares that to the open high low close of eighteen days back, then smooths the average and places it into a line on the chart to give us a trend of the current conditions. Breaks above it are bullish and breaks below it are bearish.
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