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4 Most Popular Technical Analysis Tools

monarchcb.com - Previously, it was explained about 4 Very Famous Technical Analysis Markers, now I want to discuss about 4 Very Famous Technical Analysis Tools. Tools in Technical Analysis are drawing tools to help analyze price charts. Some tools can also help provide buy or sell signs. Each tool has its own method of use. The next post will discuss 4 very well-known Technical Analysis tools. Also reviewed the method of use.

1. Horizontal Line

The initial line of very well-known Technical Analysis tools is the Mendatar Line or the horizontal line. As the name implies, Horizontal Line is a line whose key is used to identify support and resistance levels. By identifying support and resistance levels, traders can estimate price movements. Generally the price reverses if it approaches the support or resistance level. Or if the support and resistance levels are broken, the price is directed to continue its movement.

2. Trending Line

On the other hand, the trend line or trend line is a line that can be used to help identify the current trend. Prices generally move within the price channel, and traders can trade during this channel, until the price channel ends.

3. Rectangle

Rectangles in Technical Analysis are boxes that are generally used to look for patterns of confirmation in small zones. The use of the Rectangle is generally related to the stock trading strategy popularized by Nicholas Darvas, namely Box Theory. Stock prices often move in an abstract box. When the stock price is limited in that box, the trader waits. New traders buy when the price rises out of the box.

4. Fibonacci Retracement

The Fibonacci Retracement is a tool that uses the Fibonacci ratio, usually used to determine the target price level. The trick is to draw a line from the highest and lowest prices. After that, it will automatically show the cost level. These price levels take the form of levels of 0%, 23, 6%, 38, 2% 50% and 61, 8%. The price has a special tendency to reach the lines in the Fibonacci Retracement. That way you can trade with the guidance of the lines in the Fibonacci Retracement. The lines in the Fibonacci Retracement can also act as support or resistance.

Like that the 4 tools of Technical Analysis are very well known. Very well known generally also very widely used by traders. But these tools are not definitely suitable for you. So you have to try it yourself and determine which one is suitable for trading.

Practice Advanced Technical Analysis Tools

The illustration above is a very simple method of using these tools. There are many more advanced methods for using these tools above. You can learn more about it and also various other tools from the novel Technical Analysis for Maximum Profit

This novel is considered complete in discussing Technical Analysis and the language is also easy to understand.

I hope this post is useful