#TradingAnalysis101

1. Types of Trading Analysis

• Fundamental Analysis: Evaluates financial statements, economic indicators, news, and earnings reports to determine the intrinsic value of an asset.

• Technical Analysis: Uses price charts, patterns, indicators, and historical data to predict future price movements.

• Sentiment Analysis: Analyzes market mood using social media trends, news sentiment, and institutional activity.

2. Key Technical Analysis Tools

• Chart Patterns: Head & Shoulders, Double Top/Bottom, Flags, and Triangles.

• Indicators:

• Moving Averages (SMA, EMA) – Trend confirmation

• Relative Strength Index (RSI) – Overbought/Oversold levels

• MACD – Momentum and trend strength

• Bollinger Bands – Volatility measurement

• Support & Resistance: Identifying key price levels where assets tend to reverse or consolidate.

3. Risk Management

• Stop-Loss & Take-Profit: Set predefined exit points to manage risk.

• Position Sizing: Never risk more than 1-2% of your capital per trade.

• Risk-Reward Ratio: Aim for a minimum 1:2 or 1:3 ratio to maximize profitability.

4. Trading Psychology

• Control emotions (greed, fear, FOMO).

• Stick to a trading plan.

• Keep a trading journal to review past trades and improve.

5. Trading Strategies

• Trend Following: Trade in the direction of the prevailing trend.

• Breakout Trading: Enter when price moves beyond a key level with strong volume.

• Mean Reversion: Buy low, sell high when price deviates from historical averages.

• Scalping, Day Trading, Swing Trading: Choose based on your time commitment and risk appetite.