What is Indices Technical Analysis?
Indices Technical Analysis Strategies
Indices Technical Analysis is the science and art of forecasting future stock indexes price movement based on historical indices prices combined with Indices technical indicators. Indices Technical Analysis Course - This Indices Technical Analysis study often interprets the stock indexes price data by studying a stock indices chart and looks for stock indexes chart patterns and stock indices signals for buying and selling.
The history and origin of this Indices Technical Analysis method dates back several hundred years to Japanese and Arabian markets, Indices Technical Analysis involves using mathematical manipulation of stock indexes price data to optimize buy and sell points. The use of this type of Indices Technical Analysis in modern computerized trading programs has become increasingly popular.
The information which the is studied and assessed is stock indexes price movement so as to plan an entry or exit into a indices trade. The goal is to determine how the stock indexes trading market is trending.
What Does It Really Measure?
This Indices Technical Analysis - studies the supply and demand of indices in an attempt to determine in what direction the stock indexes price will continue to move in.
While stock indexes trading technical analysis deals with stock indexes price and indices indicators it is just a measure of investor sentiment.
What to Look For
Find the Indices Trend
The motto of stock indexes trading technical analysis is: "the indices trend is your friend." Finding the prevailing indices trend will help you become aware of the overall direction and offer you better indices trading opportunities - especially when shorter-term market movements give conflicting signals.
Daily stock indexes trading charts are more ideally suited for identifying long-term indices trends. Once you have found the overall direction then you generally open buy or sell orders in that direction.
Indices Trend or Range
No matter what stock indexes price is doing, it usually falls into one of those two categories. If the it is moving in a pattern or in one direction, you can use indices trend lines to analyze where the stock indexes price should go. If the stock indexes trading market seems to be bouncing back and forth in a range, you can use support and resistance lines to make note of where to open buy or sell stock indices orders.
One of the greatest goals of Indices Technical Analysis studies and methods in the stock indexes trading market is to determine whether a given indices will move in a indices trend in a certain direction, or if it will move sideways and remain range-bound. The most common Indices Technical Analysis method to determine these is to draw indices trend lines which are used by stock indexes traders to determine whether or not the current direction of the stock indexes trading market will continue. Many investors avoid trading in a range-bound stock indices market and only buy or sell indices when there is a indices trend since this makes trading more predictable.
For stock indexes trading technical analysts the most important indices trading tool is the stock indexes trading chart. The purpose of a stock indices chart is to provide a visual representation of indices trading rates quotes (drawn on the y-axis) against time (drawn on the x-axis) for indices, this stock indices chart is used as a basis for making predictions of the future stock indexes price direction.
Indices Trend Lines
The direction of these indices trend lines determines the stock indexes trading market direction. A indices trend line drawn moving upward represents a bullish market and a indices trend line drawn moving downward represents a bearish market.
Support and Resistance - Indices Technical Analysis
Support and resistance levels are points on a stock indices chart that tend to act as boundaries. A support level is usually the trough or low point on a stock indices chart whereas a resistance level is the high or the peak point on a stock indexes trading chart. These support and resistance levels are used as buy/sell points.
Moving Averages - Indices Technical Analysis
Moving averages stock indices indicator are used to show the average stock indexes price over a given period of time. Moving Averages are called moving because they reflect the latest average in the movement of the stock indices prices.
Indices Trading Strategies
To be a successful indices trader you need to come up with a indices trading strategy. There is not one set Indices strategy that is good for all stock indexes traders. But Rather, each indices trader needs to develop their own indices trading strategy.
Indices Technical Analysis is the most widely used strategy in the stock indexes trading market and is used to decide the entry and exit points.
Market movements have identifiable repeating stock indexes price patterns that have been studied over many years providing a thorough understanding of these stock indices market trends and how they can be used to form the basis of a good indices trading strategy.
There are many Indices Technical Analysis tools available provided to facilitate this study
The beginner indices trader is advised to study each Indices Technical Analysis tool separately for getting working knowledge of the concepts and application for each Indices Technical Analysis study. Once you understand one Indices Technical Analysis method, keep on using it while studying others. Each Indices Technical Analysis tool tends to combine well when used with other Indices Technical Analysis Tools.
Support and resistance levels are also used in many indices trading strategies. Support is defined as the level that is repeatedly seen as the bottom (floor) - when the stock indexes price reaches this level it tends to bounce. Resistance level is the ceiling, the upper boundary (ceiling) that indices price rarely trades above.
Support and resistance levels are valid for a period of time, until they are broken, When the stock indexes trading market breaks through these support and resistance levels, the stock indexes price is expected to continue in that direction. For example, if the stock indexes trading market rises above the previous resistance level, it is seen as a bullish stock indices signal and the bullish movement should continue upwards.
Longer indices chart time frames establish more stronger support and resistance levels. Indices traders can use these support and resistance levels to determine when to enter or exit an open position.
Moving averages is another common stock indexes technical indicator used as to create indices trading strategies. Moving averages try to smooth out short term market fluctuations giving a clearer picture of the stock indexes price movements and trends. Indices Traders can draw SMA to determine stock indexes price movement tendency to move up or down - indices trend.
If stock indexes price crosses above the simple moving average then it will keep on moving up. If stock indexes price crosses below the SMA then it will keep moving down
If stock indexes price crosses below the SMA then it will keep moving down
These are examples of indices trading strategies that can be used individually or combined.
Indices Traders use two or more Indices Technical Analysis studies and to determine when to open an order when both Indices Technical Analysis indicators support the same direction. If several Indices Technical Analysis indicators show that the stock indexes trading market is moving towards a particular direction then one can trade with more reassurance than when he is only relying on a single Indices Technical Analysis indicator.
Fundamental analysis should also be used together to reinforce Indices Technical Analysis findings, or vice versa. A indices trader should ideally take into account two or more Indices Technical Analysis indicators when developing a Indices Trading Strategy.
Every indices trading strategy should provide clear guidelines about when to enter and exit a buy or sell indices trade position, how much loss can be accepted if the stock indexes trading market moves in the other direction and how much profit is expected. Following these simple Indices Technical Analysis guidelines can help you become successful in stock indexes trading.