▶️ Classical Technical Analysis Made Simple
It is one of the methods of technical analysis in financial markets, relying on studying price patterns and market movement to predict future trends. This analysis is based on the fundamental principles of price behavior and uses traditional but effective tools and techniques.
📌Principles of Classical Technical Analysis
Price reflects everything → meaning all news and economic and political forecasts are reflected in the price.
Prices move in trends → markets move in upward, downward, or sideways trends.
History repeats itself → previous patterns recur because traders act similarly when facing similar situations.
📌Tools of Classical Technical Analysis
– Trend Lines
– Used to determine the overall price trend (upward – downward – sideways).
Horizontal Levels (Support and Resistance)
Support: A level where the price is expected to stop falling.
Resistance: A level where the price is expected to stop rising.
Chart Patterns
Continuation Patterns (like triangles and flags).
Reversal Patterns (like head and shoulders and double tops and bottoms).
Candlestick Patterns
Such as engulfing candles, hammers, and dojis that indicate a potential price reversal.
Moving Averages
Used to determine the overall trend and crossovers that indicate a change in direction.
📌Advantages of Classical Technical Analysis🔽
✅ Simple and easy to apply compared to fundamental analysis.
✅ Relies on historical price data, making it accurate when used correctly.
✅ Can be applied to all financial markets (currencies, stocks, cryptocurrencies, commodities).
📌Disadvantages of Classical Technical Analysis
❌ It can be subjective, as traders may see different patterns on the same chart.
❌ Does not take into account sudden economic events or important news.
