Tick chart
Line chart
Bar chart
Japanese candlesticks
Speaking about technical analysis it is highly important to mention the tools that are used by the traders most often: technical indicators and patterns. There is a quite large range of such tools, but we will illustrate the most used ones:
• TREND LINES - lines joining higher and higher low points (uptrend) or lower and lower high points (downtrend). Prices breaking through these lines can point out the beginning of a possible change in price direction.
• MOVING AVERAGES - smooth out past movements and indicate a possible new trend.
• REVERSAL PATTERNS - sequences of maximums and minimums, such as head-and-shoulders.
• SUPPORT AND RESISTANCE - the price levels at which the future dynamics of prices tends to stop and / or reverse.
• RELATIVE STRENGTH INDICATORS - show overbought or oversold condition of the market.
• FIBONACCI LEVELS - price levels that indicate the purpose of possible corrective movements from previous large price movement.
• MACD or Moving Average Convergences/divergerence- Comparison of the dynamics of the two moving averages to identify early trends and trend reversals.
• CYCLICITY INDICATORS - Often prices oscillate; pass a phase of growth, decline, keeping the overall long trend. Cyclical indicators help to find such cycles. Note also that the growing market is often called the bull market, and falling market - bearish.
