Market Basics

Market Basics

Technical analysis is a method of analyzing financial markets that relies on the use of charts and other tools to identify patterns and trends in price movements. Market basics under technical analysis refer to the key principles and concepts that are used to understand how prices move in a particular market.

Some of the market basics under technical analysis include:

Trend analysis – this involves studying price movements to identify whether a market is in an uptrend, downtrend, or trading range.

Support and resistance levels – these are key price levels that can act as barriers to further price movement. Support levels are prices at which buyers tend to enter the market, while resistance levels are prices at which sellers tend to enter the market.

Moving averages – these are indicators that are used to smooth out price movements and identify trends. They are calculated by averaging the prices over a specific period of time.

Technical indicators – these are mathematical calculations based on price and volume data that are used to identify overbought or oversold conditions, as well as potential trend reversals.

Chart patterns – these are recognizable shapes that appear on price charts and can indicate potential trend reversals or continuation.

By understanding these market basics, technical analysts can make informed trading decisions based on the behavior of the market.

 

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