Tuesday, 20 December 2011

Trading techniques

In what direction the market is moving there?

What is the potential increase or decrease of an action, to what level the market will go up there? or drop it?

These are the basic concerns that all active traders will arise before intervening in the markets.
For that traders try to answer these questions based on graphs or mathematical formulas whose origin comes often famous mathematician or theorist (example: John Bollinger, etc. ..)

All these mathematical formulas are used to define the potential increase or decrease of an action.
All these precepts are associated with a pseudo science, which is call'd the technical analysis.

The mechanisms of the founders of technical analysis models used to identify buying opportunities and sales.

Technical analysis provides a simple and effective method for understanding the evolution of financial markets.
The following principles will help you better understand the evolution of an action using the basics of technical analysis, such as trends, support and resistance and oscillators.

The trend may be given by a simple observation moving averages. Moving averages, which aims to smooth the way, we will quickly give a sense to price changes as based on the past.
The trend in the short term will be given by the moving average at 20 jours.La trend over the medium term will be given by the moving average at 50 days.
The trend over the long term will be given by the moving average at 200 days.

After drawing our patterns, we will draw our support and resistance levels, which is really the best place to buy or sell a stock.
To draw the lines of support or resistance on a curve representing the course of
closing of each meeting, simply searching for all horizontal alignments of points
that are close to a course. It is not necessary that the course of these points have an identical course, tolerance of difference between the curve and the support or resistance depends on the period of observation of the curve.

Now that we have anticipated the direction of the trend, we will devote ourselves to the study of oscillators to detect areas of over-and oversold oscillators (RSI and Stochastics, ..) help identify overbought market and sold. While the moving average will inform us about the meaning of the market trend.
IT CAN BE USED, oscillators especially help us to detect trend reversal.

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