What is technical analysis?

What is technical analysis? Technical Analysis

Technical analysis, also known as Technical Analysis in English, is an investment analysis method that conducts investment analysis, trend judgment and trading point identification by analyzing transaction data.

Technical analysis and fundamental analysis (Fundamental Analysis) have become the two most important financial investment analysis methods nowadays.

Technical analysis pays more attention to human nature, that is, it pays attention to the thoughts of other investors, while fundamental analysis pays more attention to the company itself, such as the company's profitability or cash flow status.

You can usually find technical analysis data and fundamental analysis data from the analysis data provided by brokers, such as TradeUP Securities. If you focus on short-term speculation through technical analysis, then the money you earn is actually the money lost by other investors.

This is what people often call a "zero-sum game", or Zero-Sum Game in English. If you invest in a growth company through fundamental analysis, you may be more concerned about the company's future growth, so the money you earn mainly comes from the growth of the company's profitability. Technical analysis focuses on the price and quantity of transactions.

By collecting various data, conducting statistical analysis of the data, making charts, etc., the analysis results are displayed in the form of digital reports and intuitive graphics. Analysts or investors obtain market trends from data tables or graphic reports, estimate future trends, and judge the most appropriate investment opportunities.

Technical analysis considers investors' sensitivity to numbers and their ability to use statistics. Different from fundamental analysis, technical analysis does not pay attention to factors such as the company's operating model and the overall economic environment, but focuses more on numbers and trends.

Through TradeUP Securities [Open Account], you can analyze the trends and fluctuations of stock prices through a variety of technical indicators and analysis tools provided by it, such as moving averages, relative strength index (RSI), stochastic oscillator, etc.

In addition, TradeUP Securities also provides information such as stock charts and trading volumes, which can help you better understand the reasons and trends of stock price changes.

When opening an account and depositing funds at TradeUP Securities, you often have the opportunity to select multiple US stocks and view recent TradeUP account opening bonuses and detailed account opening guides. In the explanation, we use Apple stock AAPL as an example. This stock is only used as an example and is not intended to guide you to buy the stock.

Remember: There are risks in the stock market and investment needs to be cautious. Price trends (Trends): Price trends refer to the direction and trend of stock price changes within a certain period of time. Price trends can be divided into upward trends, downward trends and consolidation trends.

Some investors will predict future stock price trends by observing stock price trends and changes. Volume: Trading volume refers to the number of stock transactions in a given period of time. It is an important indicator that reflects the situation of market participants and is recognized as one of the most important indicators in technical analysis.

Momentum Indicators: Momentum indicators are a type of indicator commonly used in technical analysis. They are usually used to measure the speed and magnitude of stock price changes. The momentum indicator is usually presented as a straight line below the price chart.

Investors can judge the price trend and the momentum of the stock price based on the changes in the momentum indicator. Oscillators: Oscillators establish high and low bands between two extreme values of a stock price and then set trend indicators when the price enters these ranges.

Investors can use these tools to detect short-term overbought or oversold conditions. Moving Averages: The moving average is also one of the most basic indicators of concern in technical analysis. It smoothes the price data within a given range by constantly updating the average price line.

The calculation of the average gives a given range based on the needs of investors or analysts, which can be 20 minutes, 10 days, or a week, etc.

Support and Resistance Levels: Support and resistance levels represent the point in time when the current supply and demand relationship for a stock is satisfied in the market, which is crucial for analysts to conduct stock price analysis. What are the main types of technical analysis of a company?

There are two main categories of technical analysis: chart patterns and technical indicators. Chart Patterns Chart mode refers to the use of a series of trend lines or trend curves to analyze price movements in a graphical form. Technical analysts look for price reversal or continuation signals from fluctuations in charts.

Chart patterns have a certain degree of subjectivity. Technical analysts use various data charts to judge the information prompts on the chart based on specific models, and then determine various indicator areas such as support areas, resistance areas, etc. based on certain subjective psychological factors.

Source: TradeUP The chart patterns of technical analysis usually include the following: Candlestick chart: Candlestick chart is one of the most widely used chart patterns in technical analysis. It presents stock price fluctuations in an intuitive way, including information such as opening price, closing price, highest price, and lowest price.

Line chart: Line chart mainly reflects the trend changes of stock prices and is presented in the form of lines connecting all price points. Bar chart: Bar chart is usually used to display stock trading volume, using vertical bars to represent the trading volume of each trading day.

Bollinger Band chart: The Bollinger Band chart is a chart model based on the Bollinger Band indicator. It mainly reflects the fluctuations and trends of stock prices, including information such as the middle track, upper track, and lower track.

MACD chart (Moving Average Convergence Divergence chart): The MACD chart is a chart model based on the MACD indicator. It mainly reflects the long-term trend and short-term fluctuations of stock prices, including information such as DIF, DEA and MACD.

Technical Indicators Technical indicators of technical analysis are mathematical formulas and algorithms used to analyze stock price movements and market trends. These indicators usually help analysts better predict future price movements and trends by calculating changes in data such as price and trading volume.

Technical indicators can be divided into different types based on their characteristics, such as momentum indicators, trend indicators, oscillators, etc. Technical indicators in technical analysis are usually calculated and presented using computer programs, and investors can use these indicators through stock trading platforms or other analysis tools.

Common technical indicators include Moving Average (MA), Relative Strength Index (RSI), Bollinger Bands, Average True Range Index (ATR), etc. What are some ways to analyze a company's technical aspects?

When conducting specific technical analysis, there are several commonly used methods, including drawing candlestick charts, setting moving averages, pivot points, and momentum indicators, etc.

Candlestick chart (Candlesticks): Candlestick chart, also known as "K-line chart", is a technical analysis method based on icon pattern and is also the most commonly used method to track price changes. A candlestick chart is drawn from the price in a single time period within any time range.

For example, each candlestick on the hourly chart represents the price trend within one hour, and each candlestick on the 4-hour chart represents the price trend within 4 hours.

When drawing a candlestick chart, the highest point is the highest point of the company's stock price within the set time period, and the lowest point is the lowest point of the company's stock price within that time period. Each "candlestick" is drawn in blue or red to represent the opening and closing prices during that time period.

A blue "candlestick" indicates that the closing price is higher than the opening price, and a red "candlestick" indicates that the opening price is higher than the closing price. Some investors will also use black and white as the colors of the "candlestick", or other color pairs.

With candlestick charts, technical analysts or investors can visually determine whether a stock's price will close higher or lower at the end of a given time period based on the candlestick's high, low, and color trends. Moving Averages: Moving averages are a technical analysis method based on technical indicators.

It is one of the most basic and most widely used methods. Technical analysts can set one or more moving averages to help them quickly determine trading points.

For example, setting "buy when the price remains above the 30-period exponential moving average, and sell when the price is below." This can greatly simplify the process of judging investment points and quickly decide on transactions.

At the same time, you can also set more complex crossing moving averages, such as setting "buy when the 10-period moving average exceeds the 30-period moving average" and so on. Pivot points: This is also a technical analysis method based on technical indicators.

Pivot points mark important support or resistance levels and are used by analysts or investors to determine the price range within which to enter or close a position.

Typically, if pivot points and support or resistance levels suddenly spike or fall, investors will assume a "breakout" trade is about to occur, meaning the market price will move sharply higher or lower beyond the current range. Momentum Indicators: This is an analytical method based on technical indicators to measure the intensity of market fluctuations.

The basic idea of this method is to determine whether the current price trend is a normal small fluctuation or marks an important fluctuation trend by measuring the intensity of price fluctuations. The size of the momentum indicator can be used as a signal of trend change.

For example, after a stock has maintained a strong and sustained upward trend for a period of time, its momentum indicator begins to weaken steadily, indicating that the stock's upward trend has begun to fall back, and investors can start to consider selling.

In addition to the most basic momentum indicators, there are also more complex momentum indicator analysis methods such as the Relative Strength Index (RSI), Moving Average Convergence-Divergence (MACD), and Average Directional Movement Index (ADX) to conduct more advanced technical analysis. How to use TradeUP for technical analysis?

TradeUP Securities is an American online brokerage that provides stock trading and investment services. On its website and app, it provides some technical analysis tools and information, such as real-time stock quotes, stock charts and technical indicators, to help investors make technical analysis and investment decisions.

TradeUP provides a basic Candlesticks chart for price analysis. The charting software includes 22 technical analysis indicators, including common indicators such as MACD, RSI and Bollinger Bands.

For some indicators, such as BBI, you can superimpose them on the candlestick chart; for other technical indicators, such as MACD, RSI, you can display them below the candlestick chart at the same time point.

Next, let’s introduce how to find technical indicators in TradeUP: Step 1: Find the button in the left picture below in the TradeUP App, and click [Full Screen] on the subsequent page (right picture below). Step 2: You can see the candlestick chart of a specific stock. In the list on the right, you can select the technical indicators you want to display.

By swiping down the list, you can find a total of 33 technical indicators, including the BBI indicator being displayed. Some indicators are overlaid on the candlestick chart, while some technical indicators are displayed directly below the candlestick chart. Step 3: Add technical indicators such as RSI.

These indicators will be displayed below the candlestick chart. Step 4: Select the time period displayed by the technical indicators, such as daily K-line, monthly K-line, annual K-line or other time periods. Step 5: In addition, the TradeUP Certificate APP also provides some drawing tools, and you can customize the corresponding technical indicators.

Here you can choose from six graphs: Trend Line: A straight line tool, trend lines are the simplest drawings used by technical analysts. It is used to represent trends and their acceleration, apply the sector principle, analyze relative steepness and other purposes. Horizontal line: Horizontal line tool.

The price level is a line perpendicular to time that acts as a support and resistance line to mark a specific price. Vertical line: Vertical line tool, time horizontal line is a line perpendicular to the price, used to mark a specific time.

Channel Line: Channel Line Worker interval statistics channel line Here we take the trend line as an example, click on the option [Trend Line]. Then, click directly on the candlestick chart with your finger to select the start and end points of the trend line: In this way, the trend chart is automatically drawn, which is very convenient to use.

The following are the 34 technical analysis indicators currently provided by TradeUP App: MA: Moving Average is a method used to smooth stock price fluctuations and helps to observe stock price trends and changes. It mainly includes simple moving average (SMA) and exponential moving average (EMA). BOLL: Bollinger Bands.

Bollinger Bands are composed of three lines. The middle line is the simple moving average of the stock price, and the upper and lower lines are the plus and minus values of the standard deviation of the stock price. Bollinger Bands can help analysts determine the range of stock price fluctuations and the possible direction of price changes.

BBI: Bull and Bear Index is a comprehensive technical indicator. The calculation method of BBI is to add the moving averages of five different periods, namely the 3-day, 6-day, 9-day, 12-day and 26-day moving averages, and then divide it by 5 to get an average value.

ENE: Elder’s Force Index is a technical indicator proposed by stock trading expert Alexander Elder. The Aird Energy Index can help analysts identify trends and changes in stock prices and determine the strength and momentum of price changes. PBX: Price and Volume Trend Indicator is a comprehensive technical indicator.

The PBX indicator is based on the relationship between stock price and trading volume and can help analysts determine the strength and direction of stock price trends. MIKE: A technical indicator developed by stock analyst Michael S. Koval. The MIKE indicator can help analysts identify trends and changes in stock prices and provide buy and sell signals.

VMA: Volume Moving Average (Volume Moving Average) is a technical indicator based on trading volume. VMA can help analysts identify trends and changes in stock prices and determine the momentum and intensity of stock price changes.

LMA: Linear Moving Average (Linear Moving Average) is a technical indicator based on stock prices. LMA can help analysts identify trends and changes in stock prices and provide buy and sell signals. HMA: Swaminathan Moving Average (Hull Moving Average) is a technical indicator based on stock prices.

HMA can help analysts identify trends and changes in stock prices and provide buy and sell signals. SAR: Stop and Reverse Indicator, also known as Parabolic SAR Indicator, can identify turning points in stock price trends and provide buy and sell signals.

VOL: Volume Indicator, which can identify the momentum and intensity of stock price changes, as well as determine the buying and selling pressure and power of the market. MACD: Moving Average Convergence Divergence (Moving Average Convergence Divergence), which can identify trends in stock prices and provide buy and sell signals.

KDJ: Stochastic Oscillator (KDJ Stochastic Oscillator), composed of three curves: K line, D line and J line. The calculation of the KDJ indicator is based on the price data of the highest price, lowest price and closing price.

The K line represents the speed of stock price changes, the D line represents the average of the K line, and the J line represents the gap between the K line and the D line. RSI: Relative Strength Index is a technical indicator used to measure the strength and speed of stock prices.

It can be used to determine the buying and selling power of stock prices and provide buy and sell signals. WR: The full name is also called "William Indicator", which was founded by American trader William Vann.

The WR indicator is usually used to analyze short-term market trends and evaluate the overbought and oversold status of stock prices by calculating the ratio between the highest price and the lowest price within a certain period of time. Normally, the WR indicator uses the 14-day time period to calculate.

ARBR: The full name is Asking-Bid Ratio, founded by Chinese analyst Shao Ping. The calculation of the ARBR indicator is based on the buying and selling power in the stock market. The ARBR indicator uses a 5-day or 10-day time period to calculate and includes two lines: the popularity line and the willingness line.

Among them, the popularity line represents the ratio of buying and selling orders in the market that day, and the willingness line represents the changes in trading volume in the market. ADX: A trend indicator, the full name is Average Directional Movement Index (Directional Movement Index).

The ADX indicator determines the upward or downward trend of stock prices by comparing the stock price of the previous day with the current day's price, and provides buy and sell signals. The DMI indicator contains two lines: +DI line and -DI line.

The +DI line represents the strength of the upward trend, and the -DI line represents the strength of the downward trend. ATR: stands for Average True Range, which is used to measure the amplitude and extent of stock price fluctuations.

The calculation of the ATR indicator is based on the fluctuation range of the stock price and the difference between the previous day's closing price and the day's highest and lowest prices. The ATR indicator is usually calculated using a 14-day time period.

DMA: Difference of Moving Average is a trend indicator used to measure the trend direction and strength of stock prices. The DMA indicator evaluates the trend direction and strength of a stock price by calculating the difference between the short-term moving average and the long-term moving average of the stock price.

The DMA indicator is usually calculated using the 10-day moving average and the 50-day moving average.

CCI: Commodity Channel Index is an indicator used to measure the trend and intensity of stock price fluctuations. The CCI indicator determines the trend and intensity of price fluctuations by calculating the difference between a stock's price and its average price. The CCI indicator is usually calculated using a 20-day time period.

MFI: Money Flow Index is an indicator used to measure the trend and intensity of stock price fluctuations. The MFI indicator determines the trend and intensity of price fluctuations by calculating the relationship between trading volume and stock prices. The MFI indicator is usually calculated using a 14-day time period.

EMV: Ease of Movement Value is an indicator used to measure the trend and intensity of stock price fluctuations. The EMV indicator determines the trend and intensity of price fluctuations by calculating the relationship between trading volume and stock prices.

The EMV indicator can help analysts determine whether price fluctuations are caused by changes in trading volume or changes in price itself. ROC: Rate of Change, also called the rate of change indicator, is used to measure the rate and extent of stock price changes.

The ROC indicator determines the rate and degree of price change by calculating the percentage change in a stock's price. The ROC indicator is usually calculated using a 12-day time period. SKDJ: A variation of the KDJ indicator used to measure the trend and strength of stock prices.

The SKDJ indicator determines the price trend and strength by calculating the relationship between the closing price, the highest price, and the lowest price. The SKDJ indicator is usually calculated using a 9-day time period. MTM: Momentum indicator (Momentum), used to measure the rate and extent of stock price changes.

The MTM indicator determines the rate and extent of price changes by calculating the absolute value of stock price changes. The MTM indicator is usually calculated using a 12-day time period. ADTM: Accumulation Distribution Trendline Multi Timeframe, used to measure the buying and selling momentum of stock prices.

The ADTM indicator determines the buying and selling momentum of the price by calculating the relationship between trading volume and price changes within multiple time periods. The ADTM indicator uses multiple time periods to calculate. Commonly used time periods include 5 days, 10 days, 20 days, 30 days, 60 days, etc.

CR: Cumulative Return, used to measure the buying and selling momentum of stock prices. The CR indicator determines the buying and selling momentum of the price by calculating the relationship between the stock price and trading volume. The CR indicator is usually calculated using a 26-day time period.

TRIX: Triple Exponential Moving Average indicator, used to measure the rate and trend of stock price changes. The TRIX indicator determines the rate and trend of price changes by calculating a triple exponential smoothed moving average of stock prices. The TRIX indicator is usually calculated using a 12-day time period.

BIAS: Bias indicator (Bias) is used to measure the deviation and trend of stock prices. It indicates the deviation and trend of stock prices relative to the moving average.

When the value of the BIAS indicator is positive, it means that the stock price is in an upward trend; when the value of the BIAS indicator is negative, it means that the stock price is in a downward trend. PCNT: Percentage Change, used to measure the change range and trend of stock prices.

The value of the PCNT indicator represents the percentage change of the stock price. When the value of the PCNT indicator is positive, it means that the stock price is in an upward trend; when the value of the PCNT indicator is negative, it means that the stock price is in a downward trend.

DKX: Long-Short Indicator (DiaoKongXi), used to measure the long-short power and trend of stock prices. The value of the DKX indicator indicates the long and short power and trend of the stock price. When the value

Full article: https://kgwv.com/encyclopedia/basics/technical-analysis/

#Investing #Markets #Stocks