Using volume to validate the strength of a price move. Recommended Resources for Mastering Technical Analysis
Repetitive price movements are often attributed to market psychology, which is driven by predictable human emotions like fear and excitement. Essential Tools and Indicators
Technical analysis is built upon three foundational assumptions:
Traders use several key components to analyze market movements:
Technical analysis can be applied to any tradable instrument with historical data, including stocks, forex, commodities, and cryptocurrencies. Professional traders often use it to:
Prices are more likely to continue in a past trend than to move erratically, regardless of the time frame observed.
Mathematical calculations that smooth out price data to help identify the general direction of a trend.
A trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. Strategic Applications