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Technical Analysis and Candlestick Charts


 * Home
 * Technical Analysis
 * Candlestick
 * Charts
 * Guide to Buy Stocks
 * …  
   * Home
   * Technical Analysis
   * Candlestick
   * Charts
   * Guide to Buy Stocks

Technical Analysis and Candlestick Charts

 * Home
 * Technical Analysis
 * Candlestick
 * Charts
 * Guide to Buy Stocks
 * …  
   * Home
   * Technical Analysis
   * Candlestick
   * Charts
   * Guide to Buy Stocks



Technical Analysis and Candlestick Charts

 * TECHNICAL ANALYSIS AND CANDLESTICK CHARTS
   
   MADE BY: KEVIN D

 * TECHNICAL ANALYSIS
   
   
   
   
   WHAT IS TECHNICAL ANALYSIS?
   
   Technical analysis is a trading discipline that uses statistical trends
   gathered from trading activity, such as price movement and volume, to assess
   investments and pinpoint trading opportunities. Technical analysis is
   involved with the analyses of price and volume, as opposed to fundamental
   analysis, which looks at a security's value in relation to financial metrics
   like sales and earnings.
   
   
   
   WHAT IS TECHNICAL ANALYSIS FOR?
   
   Using technical analysis tools, we could look at how changes in a security's
   supply and demand will impact changes in price, volume, and potential
   volatility. It is predicated on the idea that, when combined with suitable
   trading or investment rules, historical trading activity and price variations
   of a security could serve as useful indicators of the security's future price
   movements. It can help improve the assessment of a security's strength or
   weakness in relation to the market as a whole or one of its sectors. It is
   frequently used to produce short-term trading signals using various charting
   tools. Analysts can enhance their overall valuation estimate with the use of
   this information.
   
    
   
   Any security with past trading activity can be subjected to technical
   analysis. This covers stocks, futures, commodities, currencies, fixed-income,
   and other assets. Technical analysis is actually a lot more common in foreign
   exchange and commodities markets since traders there are more interested in
   short-term price changes.Technical analysis looks to predict the price
   movement of almost any tradable item, such as stocks, bonds, futures, and
   currency pairings, that is often subject to supply and demand dynamics.
   Technical analysis, in fact, is seen by some as little more than the
   examination of supply and demand dynamics as they relate to changes in a
   security's market price.
   
   
   
   
   HOW DO TECHNICAL ANALYSIS HELP PEOPLE?
   
   Researchers have produced hundreds of patterns and signals to improve
   technical analysis trading across the industry. To help traders predict and
   trade price fluctuations, technical analysts have also created a wide range
   of trading systems. While some indicators focus mostly on identifying the
   current market trend, including areas of support and resistance, others are
   more focused on analyzing the strength of a trend and its chances of
   continuing. Trendlines, channels, moving averages, and momentum indicators
   are examples of frequently used technical indicators and charting patterns.
   
   
   
   INDICATORS THAT ANALYST USUALLY EXAMINE
   
    * Trends in prices
    * Chart Patterns
    * Indications of momentum and volume
    * Oscillators (a technical analysis technique used to identify short-term
      overbought or oversold conditions. It creates high and low bands between
      two extreme values and then creates a trend indicator that moves between
      these boundaries.)
    * Moving averages
    * Levels of resistance and support
   
   
   TECHNICAL ANALYSIS AND FUNDAMENTAL ANALYSIS
   
   Technical and fundamental analysis are the two main techniques used to
   evaluate stocks and make investment decisions. Technical analysis focuses on
   statistical analysis of price movements and believes that a security's price
   already represents all publicly accessible information, while fundamental
   analysis examines a company's financial documents to ascertain the fair worth
   of the business.
   
   
   The process of assessing securities by figuring out a stock's intrinsic value
   is known as fundamental analysis. The financial health and management of
   businesses are just as important as the state of the economy and industry as
   a whole, according to fundamental experts. Fundamental analysts consider
   earnings, expenses, assets, and liabilities to be significant attributes.
   
   
   The only inputs in technical analysis are the volume and price of the stock,
   which sets it apart from fundamental analysis. The key idea is that pricing
   takes consideration of all known fundamentals, so there's no need to focus on
   them. Instead of attempting to determine a security's fundamental value,
   technical analysts analyze stock charts to spot patterns and trends that
   indicate potential future movements for the stock.
   

 * CANDLESTICK CHART
   
   
   
   
   WHAT IS CANDLESTICK CHART?
   
   Candlestick charts, a type of financial chart employed in technical analysis,
   visually represent the price movements of assets like stocks or commodities
   by displaying the high, low, open, and closing prices for a specific period.
   
   
   CANDLESTICK CHARTS VOLUME
   
   Candle volume charts are the same as regular candle charts with one important
   difference. The width of the real bodies varies with the level of volume
   during that particular session. The greater the volume, the wider the real
   body and vice versa. This is a very useful way of presenting the data because
   the signals from the regular candlesticks are preserved, yet the width of the
   real bodies offers a quick and simple overview of the volume pattern.
   

 * PARTS OF A CANDLESTICK CHART
   
    
   
   A typical candle consists of two parts: the real body, that is, the
   rectangular part, and the shadow or wick, that is, the two vertical
   extensions. The top and bottom of the rectangle are determined by the opening
   and closing prices for the day. If the closing price ends up above the
   opening (the real body), it is plotted in white. When it closes below the
   opening, it is plotted in black. The top of the real body represents the
   opening price, the bottom the close. This is reversed in the case of a white
   rectangle where the close is plotted at the top and the open at the bottom.
   
   
   
   
   BULLISH AND BEARISH CANDLESTICK CHART
   
    
   
   Bullish candlestick charts are usually represented in green or white,
   signaling a rising market as the closing price exceeds the opening price
   which shows buying strength. They are characterized by a body at the top
   which indicates upward momentum, and the line above the body represents the
   height of the period. On the other hand, bearish candlestick charts are
   usually represented in red or black to indicate a falling market as the
   closing price is lower than the opening showing selling pressure. The body is
   at the bottom which indicates downward momentum, with the line below the body
   indicating the low of the period. These charts provide insight into market
   sentiment, with bullish signals suggesting a positive sign and bearish
   signals indicating a negative sign. Traders analyze various patterns, such as
   engulfing patterns or hammers for bullish trends and shooting stars or
   bearish engulfing patterns for bearish trends, to make informed decisions
   based on prevailing market sentiment.
   
   


 * GUIDE TO BUY STOCKS FOR BEGINNERS
   
   1
   
   
   SELECT AN ONLINE STOCKBROKER
   
   Investing in stocks is most straightforward through online stockbrokers.
   Opening an account is as easy as setting up a bank account—complete an
   application, provide ID proof, and choose funding options. Once your account
   is set up and funded, buying stocks is quick and user-friendly through the
   broker's website. This method is more convenient compared to using
   full-service brokers or purchasing stocks directly from companies, making
   stock market participation accessible to a wider audience.
   
    
   
    
   
    
   
   2
   
   
   RESEARCH THE STOCK YOU WANT TO BUY
   
   Once your account is set up and funded, shift your focus to stock selection.
   Begin by researching companies you're familiar with as a consumer by looking
   for companies you want to own.
   
    
   
   Start your research with the company's annual report, particularly the
   management's letter to shareholders for a comprehensive overview. Most of the
   needed information such as conference call transcripts, earnings updates, and
   recent news, can be found on your broker's website.
   
   3
   
   
   DECIDE HOW MANY SHARES TO BUY
   
   Approach stock investing without pressure to buy a specific number of shares
   or go all in at once. Start small, perhaps with a single share, to experience
   owning stocks and gauge your comfort with market fluctuations. As you gain
   confidence, gradually diversify your portfolio over time. This approach
   allows you to build expertise at a comfortable pace.
   
   4
   
   
   BUY STOCKS USING THE RIGHT ORDER TYPE FOR YOU
   
   There are 2 main order type that most investors uses, market order and limit
   order. A market order is an instruction to buy or sell a stock at the current
   market price, ensuring immediate execution.
   
   Market orders are transactions meant to execute as quickly as possible at the
   current market price. These orders are the most basic buy and sell trades,
   where a broker receives a security trade order and then processes it at the
   current market price.
   
    
   
   While limit order allows you to set a specific price at which you want to buy
   or sell a stock. The order will only be executed if the market reaches or
   surpasses the designated price. This provide you with more control over the
   transaction but no guarantee of immediate execution. This order has a big
   risk since that if the actual market price never fall within the limit order
   guidelines, the investor's order may fail to execute. This makes limit order
   more complicated to be excecute compare to market order which is easier to be
   executed.
   
    
   
   For beginners who just got into stock trading, it is recommended to start
   with market orders. Market order is simple and ensure quick execution at the
   current market price. Market orders are straightforward, making them a good
   choice for beginners. As you get more comfortable, you can explore limit
   orders for a more strategic approach.
   
   5
   
   
   IMPROVE YOUR STOCK PORTFOLIO
   
   It is important that you keep track all the stocks that you have purchase.
   This can be done by making a stock portfolio. Stock portfolio is a collection
   of stocks or investments owned by an individual or an entity. It represents
   the combined holdings of various stocks that someone has chosen to invest in.
   The goal of creating a diversified stock portfolio is to spread risk and
   potentially enhance returns by including a variety of stocks from different
   sectors or industries. Investors often manage their stock portfolios to align
   with their financial goals, risk tolerance, and investment strategy.
   
   6
   
   KNOWING WHEN TO SELL STOCKS
   
   You can sell your stocks when you're satisfied with the profits they've made,
   or when you need the cash. Ideally, you want to set specific, long-term goals
   for your investments so that you check both of those boxes at the same time.
   
   




 








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