What is Technical Analysis?

Technical Analysis Strategies

Technical Analysis is the science and art of forecasting future price movement based on historical prices combined with technical indicators. Technical Analysis Course - This Technical Analysis study often interprets the price data by studying a chart & looks for energies patterns and signals for buying and selling.

The history and origin of this Technical Analysis method dates back several hundred years to Japanese and Arabian markets, Technical Analysis involves using math manipulation of price data to optimize buy & sell points. The use of this type of Technical Analysis in modern computerized programs has become increasingly popular.

The information which the is studied and assessed is energies price movement so as to plan an entry or exit into a trade. The goal is to determine how the trading market is trending.

What Does It Really Measure?

This Technical Analysis - studies the supply and demand of a energies instrument in an attempt to determine in what direction the price will continue to move in.

While energies analysis deals with price and indicators it is just a measure of investor sentiment.

What to Look For

Find the Trend

The motto of energies analysis is: "the trend is your friend." Finding the prevailing trend will help you become aware of the overall direction and offer you better energies trading opportunities - especially when shorter term market movements give conflicting trading signals.

Daily charts are more ideally suited for identifying long-term trends. Once you have found the overall direction then you generally open buy or sell orders in that direction.

Trend or Range

No matter what price is doing, it usually falls into one of those two categories. If the price is moving in a setup or in one direction, you can use trend lines to analyze where the price should go. If the market seems to be bouncing back and forth in a range, you can use support & resistance lines to make note of where to open buy or sell orders.

One of the greatest goals of Technical Analysis studies & techniques in the trading market is to determine whether a given instrument will move in a trend in a certain direction, or if market will continue moving sideways and remain range-bound. The most common Technical Analysis method to determine this is to draw energies trend lines which are used by traders to determine whether or not the current direction of the market will continue. Many investors avoid trading in a range-bound market and only buy or sell energies when there is a trend since this makes trading more predictable.

For energies technical analysts the most important energies tool is the chart. The purpose of a chart is to provide a visual representation of price quotes (drawn on the y-axis) against time (drawn on the x-axis) for energies instrument, this energies chart is used as a basis for making predictions of the future price direction.

Energy Trend Lines

The direction of these trend lines determines the market direction. A energies trend line drawn moving upward represents a bullish market and a trend line drawn moving downward represents a bearish market.

Support & Resistance

Support & resistance zones are points on a chart that tend to act as boundaries. A support zone is usually the trough or low point on a chart whereas a resistance level is the high or the peak point on a chart. These support and resistance levels are used as buy/sell points.

Moving Averages Indicator

Moving averages energies indicator are used to show the average price of a energies instrument over a given period of time. Moving Averages indicators are called moving because they reflect the latest average in the movement of the prices.

Energies Strategies

To be a successful trader you need to come up with a energies strategy. There is not one set Energies Trading strategy that is good for all traders. But Rather, each trader needs to develop their own energies strategy.

Technical Analysis is the most widely used strategy in the market and is used to decide the entry and exit points.

Market movements have identifiable repeating price patterns that have been studied over many years providing a thorough understanding of these market trends and how they can be used to form the basis of a good trading energies strategy.

There are many Technical Analysis tools available provided to facilitate this study

The beginner energies trader is advised to study each Technical Analysis tool separately to get working knowledge of the concepts & application for each Technical Analysis study. Once you understand one Technical Analysis method, keep on using it while studying others. Each Technical Analysis tool tends to combine well when used with other Technical Analysis Tools.

Support and resistance levels are also used in many energies strategies. Support is defined as the level that is repeatedly seen as the bottom (floor) - when the price reaches this level it tends to bounce. Resistance level is the ceiling, the upper boundary (ceiling) that a energies instrument rarely trades above.

Support and resistance levels are valid for a period of time, until they are broken, When the market breaks through these support and resistance levels, the price is expected to continue in that direction. For example, if the market rises above the previous resistance level, it is seen as a bullish signal and the bullish movement should continue upwards.

Longer energies chart timeframes establish more stronger support and resistance levels. traders can use these support and resistance levels to determine when to enter a trade or exit an open position.

Moving averages is another common technical indicator used as to create energies strategies. Moving averages try to smooth out short term market price fluctuations giving a clearer picture of the price movements and trends. Traders can draw SMA to determine price movement tendency to move up or down - energies trend.

If price crosses above the simple moving average then it will keep on moving up.

If price crosses below the SMA then it will keep moving down

These are examples of energies strategies that can be used individually or combined.

Traders use two or more Technical Analysis studies to determine when to open an order when both Technical Analysis indicators support the same direction. If several Technical Analysis indicators show that the market is moving towards a particular direction the a trader can trade with more reassurance than when he is only relying on a single Technical Analysis indicator.

Fundamental analysis should also be used together to reinforce Technical Analysis findings, or vice versa. A trader should ideally take into account two or more Technical Analysis indicators when developing a Energies Strategy.

Every energies strategy should provide clear guidelines about when to enter and exit a buy or sell trade position, how much loss can be accepted if the market moves in the other direction and how much profit is expected. Following these simple Technical Analysis guidelines can help you become successful in energies.