Stock Terms: Technical Side &Nbsp; What Is Technical Side?

Technical analysis has three premises: (1) market behavior contains all information; (2) price changes have certain trends or laws; (3) history repeats itself.

Because we believe that market behavior includes all information, we can ignore the factors such as macroscopical and policy aspects, and think that price changes have rules and history repeats itself. It makes it easier to judge future trends through historical paction data.

Basic theory of technical analysis

(1)

The oldest theory in this technical analysis is that prices can fully reflect all existing information, and the knowledge acquired by participants (traders, analysts, portfolio managers, market strategist and investors) has been converted into price behavior.

Currency fluctuations caused by unforeseen events, such as the will of God, will be included in the overall trend.

Technical analysis aims at studying price behavior and making conclusions about future trends.

The Dow Jones theory, which is mainly based on the development of the stock market average line, holds that prices can be interpreted as three waves, namely, dominant, auxiliary and subordinate.

The related time periods range from less than 3 weeks to more than 1 years.

This theory can also explain the anti galloping mode.

The anti galloping mode is the normal stage of trend slowing down of mobile speed, and the level of such anti car mode is 33%, 50% and 66%.

(2) Fibonacci counter phenomenon

This is a widely used anti car phenomenon group based on natural and artificial phenomena.

This phenomenon is used to determine the extent of rebound or backtracking between price and its underlying trend.

The most important anti car phenomena are 38.2%, 50% and 61.8%.

(3) Elliot Spo

Elliot scholars categorized prices in a fixed wave pattern.

These models can represent future indicators and reversals.

The wave moving in the same direction as the trend is known as the driving wave, while the wave which moves with the trend is called the modified wave.

Elliot's wave theory divides the driving wave and the modified wave into 5 and 3 main directions respectively.

These 8 directions form a complete wave period.

The time span can range from 15 minutes to several decades.

The challenging part of Elliot's wave theory is that the 1 wave periods can be composed of 8 sub wave periods, and these waves can be further divided into driving and correcting waves.

Therefore, the key to Elliot's wave is to identify the environment in which a particular wave is located.

The Elliot faction also uses Fibonacci counter motion to predict the peak and valley of future wave periods.

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Two. Content of technical analysis

(1) trend finding

As for technical analysis, the first thing you may hear is the following proverb: "trend is your friend".

Finding the leading trend will help you see the overall direction of the market and give you a more discerning insight, especially when the shorter term market volatility disrupt the market.

Weekly and monthly chart analysis is most suitable for identifying longer-term trends.

Once you see the overall trend, you can choose the trend in the time span you want to trade.

In this way, you can buy up in the rally and sell up in the downtrend.

(2) support and resistance

The level of support and resistance is the point where a graph continues to go upward or downward.

The support level is usually the lowest point in all chart models (hourly, weekly or annual), and the resistance level is the highest point (peak point) in the chart.

When these points show the trend of reappearance, they are identified as support and resistance.

The best time to buy / sell is to be near the level of support / resistance that is not easily broken.

Once these standards are broken, they tend to be a reverse obstacle.

Therefore, in the rising market, the broken resistance level may be a support for upward trend; however, once the support level is broken, it will turn into resistance in the declining market.

(3) lines and channels

Trendline is a simple and practical tool for identifying the direction of market trend.

The upward line is connected by at least two successive low points.

Naturally, the second point must be higher than the first point.

The extension of the line helps to determine that the market will move along the path of movement.

Upward trend is a specific method used to identify support lines / levels.

Conversely, downward lines are drawn by connecting two points or more.

The variability of paction lines is related to the number of connection points to a certain extent.

However, it is worth mentioning that each point does not need to be too close.

The channel is defined as an upward trend line parallel to the corresponding downward trend line.

The two line can represent the corridor of price up, down or horizontally.

The common properties of the channel supporting the trendline connection point should be between the two connection points of the reverse line.

If you believe in the tenet of "trend is your friend" in technical analysis, the moving average will benefit you greatly.

The moving average shows the average price at a specific time in a given period.

They are called "mobile" because they measure at the same time and reflect the latest average.

One of the shortcomings of the moving average is that they lag behind the market, so they are not necessarily a sign of a trend change.

To solve this problem, the shorter moving average line with 5 or 10 days will reflect the recent price trend better than the 40 or 200 day moving average.

Alternatively, the moving average can also be used by combining the average of two different time frames.

Whether using the moving average of 5 and 20 days or the moving average of 40 and 200 days, the buy signal is usually detected on the longer average line in the shorter average line.

On the contrary, the selling signal is prompted when the shorter average line crosses the longer period average line.

There are three kinds of mathematically different moving averages: simple arithmetic moving averages, linear weighted moving averages, and squared weighted averages.

The last is the preferred method, because it gives more weight to recent data and considers data in the whole cycle of financial instruments.