Types of charts
In the case of technical analysis, the analyst or trader will be based on a chart. In practice, the trader observes chart patterns, uses technical indicators, oscillators and usually the prediction is based on a combination of these inputs. The field of technical analysis is based on three assumptions. The first is that the market makes everything cheaper, the next is based on the assumption that prices move in trends and the last says that history tends to repeat itself. Technical analysis is also basically based on three different types of charts that a trader can use depending on his own preferences:
- Line chart
- Bar chart
- Candlestick chart
Technical indicators
Trading and asset appreciation is becoming more and more popular year by year for a wide range of people. The evolution of this field has allowed analysts to develop more technical indicators over the years in an effort to best and most accurately predict future price movements. The key is to know some indicators that are primarily aimed at identifying the current market trend. This includes support and resistance, while other indicators are aimed at determining the strength of the trend and the likelihood of it continuing. The most common indicators we use in technical analysis include trend lines, moving averages and momentum indicators such as the moving average divergence indicator (MACD).
