What is classical analysis?
A short thread about classical analysis 🧵🧵
There are 6 things you need to know:
1- Candlesticks
2- Trend lines
3- Support and resistance lines
4- The most important technical indicators
5- Chart patterns
Support & Resistance:
It is: any area on the chart (graph) that the price bounces off.
Resistance area: It is the upper area that is difficult for the price to break through, and it often bounces back down from it.
Support area: It is the lower area that is difficult for the price to break, and it often bounces back from it.
The most important indicators:
1- Indicators that help to know the direction such as the MACD indicator – Moving Average.
2- Indicators that help to know the momentum (speed of market movement), such as the RSI indicator – ADX indicator.
3- Indicators that help to know the liquidity size which indicates the strength of the movement, such as the Oscillator indicator.
4- Indicators that help study market fluctuations such as the Bollinger Bands indicator.
1 • Head and Shoulders
It is 3 peaks divided into one peak at the top and two peaks at the bottom on each side, in the shape of a head and shoulders as shown in the picture.
The price explodes upon breaking the neckline, and there can be 3 bottoms, with one bottom at the bottom and two bottoms on each side, which are the shoulders.
2- Ascending/Descending Triangle
As you see in the picture, it's a horizontal line and an inclined line, and as long as it is rising, after a wave of price increases, prices are compressed and confined within the triangle, leading to an explosion of prices upward. As for the descending triangle, it is the exact opposite.
3- Symmetrical Triangle
It is two inclined lines as shown in the picture, and it also leads to price contraction, which leads to price explosion according to the direction line of the first wave.
• Descending Triangle
• Symmetrical Triangle
• Ascending Triangle
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