![]() The time frame a trader selects to study is typically determined by that individual trader’s personal trading style. Popular time frames that technical analysts most frequently examine include: ![]() ![]() The technical analysis time frames shown on charts range from one-minute to monthly, or even yearly, time spans. The two primary variables for technical analysis are the time frames considered and the particular technical indicators that a trader chooses to utilize. Technical traders analyze price charts to attempt to predict price movement. ![]() Many fundamental traders use fundamental analysis to determine whether to buy into a market, but having made that decision, then use technical analysis to pinpoint good, low-risk buy entry price levels. Technical analysis is not only used by technical traders. Technical traders believe that current or past price action in the market is the most reliable indicator of future price action. Past Price as an Indicator of Future Performance The theory behind the validity of technical analysis is the notion that the collective actions – buying and selling – of all the participants in the market accurately reflect all relevant information pertaining to a traded security, and therefore, continually assign a fair market value to the security. Technical analysis is a tool, or method, used to predict the probable future price movement of a security – such as a stock or currency pair – based on market data.
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