Index Technical Analysis is Based on 3 Factors Common in the Trading Market:

1. Stock Price Moves in Trends

stock price movements follow trends. This means that after a market trend has been established, the future stock price movement is more likely to be in same direction as the trend than to be against it. Most strategies are depending on this stock trade analysis concept - trend trading.

2. Indices Price Movement Discounts Everything

Technical analysis only considers stock price movement & assumes that, at any specific time, trading price reflects everything that has or could affect the instrument including even the fundamental factors. This only leaves study of stock price, which is a product of the supply & demand for indices in the market.

3. History Tend to Repeat Itself

History repeats itself mainly in terms of stocks price movement. Repetitive nature of stock market moves is attributed to traders investor psychology: in other words, trade participants tend to provide a consistent reaction to the market most of the time. Technical analysis uses chart patterns to analyze these stock price movements. Although these charts represent historical data they're still relevant because they illustrate stock chart patterns which often repeat themselves.

List of All Indicators - Indices Technical Analysis Explained Guide - Indices Technical Analysis PDF

Understanding this stock technical analysis of the market can be a valuable indices tool in determining the trend of any market and assisting with entry and exit levels for your stock trades.

The goal of these stock trading analysis methods is to help traders determine when the market is trending, and when it isn't. If the price is heading in one particular direction, then we want to be aboard. If the instrument isn't heading in a particular direction, all you're going to do is lose money as you'll get whipsawed around and this is not what we want as indices investors.

Unfortunately, many traders fight the trend and buy or sell in the opposite market direction of a this trend direction, trying to pick a top or a stock market bottom, only to see the market move further in direction of the trend.

Another common mistake traders often make is adding on to a losing indices position, averaging a loss. This isn't a good trading strategy especially in a strongly trending market. It's something which experienced traders never do. The trend is your best friend, never go against it.

This stock trading analysis studies alert investors of setups and there are no certainties in financial market. Profits come from using tested strategies & indices methods to find a trending market and taking indices trade positions in the same direction of the market price trend.

With so many indices trading investors using similar indices tools, technical analysis can become a self fulfilling prophecy. If many indices trading investors use the same levels as a buying point, price goes upward as everyone will make similar stock analysis moves. However, the question is always how long these trading moves will last?

Understanding this stock technical analysis methods will give the charts some meaning when you look at them and apply trading analysis. Technical analysis will help you understand why certain stock price movements occurred.

Charts are used with technical indicators to look for stock chart patterns which have occurred in past under certain conditions. When these conditions are noted again, you as a trader can use the past stock chart patterns studies to make a buy/sell decision.

Some of the most common indicators include: Stock Index Technical Analysis Explained PDF

MAs Moving Averages Indicator
Relative Strength Indicator
Stochastic Indicator
MACD Indicator
Fibonacci Retracement Indicator
Bollinger Bands Indicator

Most indicators are pictured separately from the trading chart normally below it. This is because these trading indicators often use a variant scale than that of price chart.

Some of the indicators are shown & displayed on price chart itself, such as MAs Moving Averages and Bollinger bands - these indicators are referred to as stock price overlays.

Explanation of these trading indicators is found under the article: List of All Indicators - Indices Technical Analysis Tutorial - Learn Technical Analysis Lesson Tutorial

SUMMARY

Indices Technical Analysis Relies on Defining Probabilities
Index Technical Analysis Uses History of Price Patterns
Index Technical Analysis Uses Several Analytical Tools (Indices Indicators)
Indices Technical Analysis Uses Setups

Learn Technical Analysis Training Guide

Most traders prefer technical analysis - learning the analysis methods & techniques also takes time to learn because of its nature which involves traders strictly abiding by the technical trading rules.

To learn how to trade successfully, it's important that you as a trader understand the Three strategies, outlined below:

1. Indices price moves will always follow a trend which can be identified by looking at the patterns or the candlesticks stock charts. If any indices trading investor tells you that you as a trader can also profit from the counter-trends consistently it won't be possible because the trend is the only proven method/technique of earning money in the market.

2. The market forces will drive the prices upward or downward depending on supply and demand. Technical analysis seeks to measure the demand supply of a instrument using various stock trading analysis tools and indicators. The demand & supply is reflected in price action. Therefore, by simply looking at price movements themselves you as a trader can try and predict what direction the price is likely to move towards using one or two technical indicators - analysis indicators like the MA or support & resistance levels stock indicators.

3. The stock market not only shows the history of the past stock prices, but also will follow the trend that was in place, until its trend direction reverses. Some very key indicators used to identify these stock market movements are Moving Averages, MACD and Bollinger Band.

When stock price starts and begins to consolidate, which means there is no trend, you should use a different approach to interpret and analyze the indices market. You should use support & resistance levels and breakout strategies to analyze the ranging stock market prices.

When the price retraces, you should use patterns & technical indicators to analyze whether the current trend will continue or reverse.

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