Technical Analysis is Based on 3 Factors Common in the Trading Market:

1. Price Moves in Trends

Crude price movements follow trends. This means that after a trend has been established, the future crude market price movement is more likely to be in same direction as the trend than to be against it. Most oil strategies are based on this oil analysis concept - trend trading.

2. Price Movement Discounts Everything

trading analysis only considers price movement and assumes that, at any given time, price reflects everything that has or could affect the oil instrument including even the fundamental factors. This only leaves the study of price, which is a product of the supply and demand for a particular oil in the crude market.

3. History Tends to Repeat Itself

History repeats itself mainly in terms of price movement. The repetitive nature of oil market movements is attributed to oil traders investor psychology: in other words, oil trading participants tend to provide a consistent reaction to the market most of the time. Crude trading analysis uses oil setups to analyze these price movements. Although these charts represent historical data they are still relevant because they illustrate chart patterns that often repeat themselves.

List of All Oil Indicators - Technical Analysis Explained PDF - Technical Analysis PDF

Understanding this oil analysis of the market can be a valuable oil tool in determining the trend of any oil market and assisting with entry and exit levels for your crude trades.

The goal of these oil analysis methods is to help oil traders determine when the market is trending, and when it is not. If the oil is moving in one particular direction, then we want to be on board. If the oil instrument is not moving in a particular direction, all you are going to do is lose money as you will get whipsawed around and this is not what we want as oil investors.

Unfortunately, many oil traders fight the trend and buy or sell in the opposite direction of a this trend direction, trying to pick a top or a market bottom, only to see the market move further in direction of the trend.

Another common mistake traders often make is adding on to a losing oil position, averaging a loss. This isn't a good oil strategy especially in a strongly trending crude trading market. It is something that experienced investors never do. The trend is your friend, never go against it.

This oil analysis studies alert investors of oil setups and there are no certainties in financial crude trading market. Profits come from using proven oil strategies and oil methods to find a trending crude oil and taking crude trades in the same direction of the trend.

With so many oil investors using similar oil tools, oil analysis can become a self fulfilling prophecy. If many oil investors use the same levels as a buying point, the price goes up as everyone will make similar oil analysis moves. However, the question is always how long these oil moves will last?

Understanding this oil analysis methods will give the charts some meaning when you look at them and apply oil analysis. Crude trading analysis will help you understand why certain price movements occurred.

charts are used with indicators to look for oil chart setups that have occurred in past under certain conditions. When these conditions are noted again, you can use the past oil chart patterns studies to make a buy or sell decision.

Learn Technical Analysis Lesson

• Moving Averages Indicator
• Relative Strength Index Indicator
• Stochastic Oscillator Indicator
• MACD Indicator
• Crude Oil Fibo Retracement Indicator
• Bollinger Bands Indicator

Most oil indicators are shown separately from the chart usually below it. This is because these indicators often use a different scale than that of the price chart.

Some of the indicators are shown on the price chart itself, such as Moving Averages and Bollinger bands - these indicators are referred to as price overlays.

Explanation of these indicators is found under the tutorial: List of All Indicators Lesson - Learn Oil Technical Analysis Tutorial Guide - Technical Analysis Examples

SUMMARY

1. Technical Analysis Relies on Defining Probabilities
2. Technical Analysis Uses History of Oil Price Patterns
3. Technical Analysis Uses Several Analytical Tools (Indicators)
4. Technical Analysis Uses Chart Patterns

Learn Oil Technical Analysis Lesson

Most oil traders prefer technical analysis - learning the oil analysis methods also takes time to learn due to its nature which involves abiding by the technical rules.

To learn how to trade oil successfully, it is important that you understand the 3 strategies, outlined below:

1. Oil Trading moves will always follow a trend which can be identified by looking at the crude oil setups or the candlesticks charts. If any oil investor tells you that you can also profit from the counter-trends consistently it will not be possible because the trend is the only proven method of making money in the crude market.

2. The market forces will drive the prices up or down depending on supply and demand. Crude trading analysis seeks to measure the demand supply of a oil instrument using various oil analysis tools and indicators. The demand supply is reflected in the price action. Therefore, by simply looking at the price movements themselves you can try and predict what direction the price is likely to move towards using one or two oil indicators - oil analysis indicators like the moving average or support and resistance levels indicators.

3. The market not only shows the history of the past prices, but will also follow the trend that was in place, until its trend direction reverses. Some very important oil indicators used to determine these market movements are Moving Averages, MACD and Bollinger Bands Indicators.

When price starts to consolidate, which means there is no oil trend, you should use a different approach to analyze the crude trading market. You should use support and resistance levels and breakout oil strategies to analyze the ranging oil market prices.

When the market retraces, you should use patterns and technical indicators to analyze whether the current oil trend will continue or reverse.