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KEY TERMS USED IN TECHNICAL ANALYSIS.

The key terms that are commonly used in technical analysis are:

🟢 TREND: It is the general direction of a market or security. Trends can be upward, downward, or sideways;

🟡 SUPPORT AND RESISTANCE: These are levels on a price chart where the price has difficulty falling below (SUPPORT) or rising above (RESISTANCE);

🔵 MOVING AVERAGES: This constitutes a statistical measure that smooths price data over a certain period. Moving averages are used to identify trends and can help investors find potential entry and exit points for their trades;

🔴 INDICATORS: Indicators are mathematical calculations used to predict future movements;

⚪ CHART PATTERNS: These are specific formations on a price chart that are believed to predict future price movements;

⚫ ASSET PRICE: This is the value at which the asset is currently being sold;

🟤 ASSET VALUE: The value is based on the underlying fundamentals of an asset. Value-focused investors seek assets traded at a price lower than their intrinsic value.

By understanding these key terms, traders and investors can better understand the market and make more informed decisions about their operations. Technical analysis is not a perfect science, but it can be a tool to identify potential trading opportunities.

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HOW TO INTERPRET CANDLE CHARTS?

A candle chart is a simple chart made up of individual candles, which investors use to understand price action. The price action of the candles involves identifying where the price opened for a period, where the price closed for a period, as well as the highs and lows of the price for a specific period.

🟡 OPENING PRICE - Shows the first price traded during the formation of the new candle;

🟢 HIGH PRICE - The top of the upper wick/shadow represents the highest price traded during the period;

🔵 LOW PRICE - The bottom of the lower wick indicates the lowest price traded during the period;

⚪ CLOSING PRICE - It is the last price traded during the period of the candle's formation;

🔴 THE WICK - Also referred to as shadows, are the extremes of the price for a specific period on the chart;

🟤 DIRECTION - It is determined by the color of the candle. If the price of the candle is closing above the opening price of the candle, the price is moving in the upward direction and the candle will be green;

⚫ RANGE - The difference between the highest and lowest price of a candle is its range, which can be calculated as (range = highest point - lowest point).

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