Technical Analysis

in Tron Fan Clublast year

Technical analysis is an analysis to identify trends in a security's price over time. Technical analysis is a popular method of evaluating securities like stocks and bonds. It is based on their historical price and volume data. It can be related to crypto trading as well. Technical analysts use a variety of tools and techniques to study price trends and identify patterns that can help predict easily the future price movements. This analysis basically uses line charts, bar charts, and candlestick charts to visualize price data. It is looking for patterns such as higher highs and higher lows. And vice versa for the downtrend.

It shows some technical indicators which are mathematical calculations that use historical price and volume data to provide additional insight into a security's current or future performance. Some technical indicators are moving averages, relative strength index (RSI), and stochastic oscillators. Moving averages are one of the simplest and most widely used technical indicators. They are calculated by averaging a security's price over a specified time period (e.g., 50 days or 200 days) and plotting the result on a chart. Traders often use moving averages to identify trends and potential support and resistance levels. RSI is also a popular technical indicator that measures a security's strength or weakness relative to its past performance. RSI is actually calculated by comparing the average gains and losses over a specified period. Finally scaling the result between 0 and 100. Traders often use the RSI to identify overbought or oversold conditions in a security. This shows some signals for potential buying or selling opportunities. The stochastic oscillator is a very important indicator indeed. It compares a security's closing price to its trading range over a specified period. It also scales the result between 0 and 100. Traders often use the stochastic oscillator to identify potential trend reversals and to confirm the strength of an existing trend.


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The technical analysis focus on objective data and statistical analysis. It is a much clear and more objective analysis than fundamental analysis. Technical analysis is based on historical price and volume data that can be analyzed using various mathematical tools and techniques. Still, this analysis can be prone to false signals and whipsaws. Especially when a security's price briefly moves in the opposite direction of its underlying trend. Another limitation is that technical analysis can only provide a limited view of a security or crypto portfolio's overall performance and does not take into account broader economic or geopolitical factors. However, those have an impact on the price of crypto. Some traders prefer to use technical analysis exclusively. In contrast, others combine technical analysis with fundamental analysis or other types of analysis to get a more complete picture of a crypto performance.


~ Regards,
VEIGO (Community Mod)



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