What is Stock Market Technical Analysis?
First, We need to decide what type of trading we will be doing like Intraday, Short term, mid-term or Long term. For Intraday, We need to select shorter time frames like 3 min/5 min/15 min. For the short term, we need to select 30 min/1 hour, for the midterm 2 hours to 4 hours timeframe, for the long term, We require a Day chart to monthly/ 6 months chart depending on how long We will be holding the stocks.
Technical Analysis Step by step:
Company DATA:
We need to analyze the price movement and history of the company. There are so many websites available on the internet that have charts like Google Finance, Yahoo Finance, Tradingview.com, Investing.com, Moneycontrol.com and many more online. I select Tradingview.com as its chart pattern look is easy to read.
TradingView:
Open TradingView.com. You will get a page as shown in Image1, type which company data you need and click on the search button. I have typed Reliance, next to the company name, you will get 2 buttons Launch Chart and See Overview button as shown in Image 2. Click on Launch Chart, and you will get Image 3.
Click on the timeframe and select the appropriate time and chart pattern as shown in Image 4.
Moving Average:
Moving Average is a technical indicator. It determines trend by calculating a trend line. In other words, the average of price data over a number of periods is called moving average (MA).
The method of calculating this indicator can be read here: http://chartflip.com/broker/the-secret-behind-the-ema-strategy
How to select Moving Average? Click on Indicators on the chart , a widow will open, in search space, type 3EMA and select the one with author VictorGrego. The Indicator is automatically applied on the chart. Refer the Image given below.
Pivot Points:
Pivot points is a tool that help you find support or resistance points in the current market conditions for the given time frame. The values of resistance and support varies on different time frames.
Refer the given Image. Click on Indicators, you will get a screen, type Pivot, you will get so many options, select Pivot points Standard. Once clicked on it, it will get automatically applies on the Chart.
Volume:
Volume refers to buyers and seller in the market. The overall trend of a stock price is determined by the accumulation of volume and its direction. A rising asset is sometimes met with rising volume. This is the case for following trend. Sometimes the opposite occurs and there’s an increase in price and a decrease in volume. This may suggest a lack of public interest and can serve as a signal for potential trend reversals.
Refer the Image. Click on Indicator, you will get a screen, type Volume, click on it, it will get applied automatically on the Chart.
RSI
RSI divergence is a technical indicator in which price and the RSI move in opposite directions. Both an ascending and descending pattern are considered as different types of RSI divergence.
It help traders to validate trends and trend reversals ad also overbought and oversold securities.
It helps short-term traders with buy and sell signals.It's a technical indicator that can be used with other Indicator to support trading strategies.
Select Indicator on the Chart, new window will appear on the screen, Type RSI and select Stochastic RSI, it will get automatically applied on the chart.
Drawings:
- Trend Line
- Fibonacci Retracement
How to Draw a trend line ?
Select two or more points: Choose two or more points on the chart and Draw the line Using a straight edge or the trend line tool in your charting software, connect the selected points with a straight line.
In TradigView.com, on left side of the chart, Drawing Tools are available. select the second tool which represents a line. If you click on it ,a list appears next to it. Click on Trend line . Now trend line is selected. Identify 2 or 3 points which represents support or resistance. Holding a left mouse on one finger, move the cursor using another finger. Now Trend line is drawn.
and Education.
