Many people often believe that technical analysis in general is complex due to the large number of technical analysis schools. However, the truth is that it is possible to analyze prices using simple and easy analysis as well.
Here, we will discuss classical analysis in general, which is one of the first stages of technical analysis. It is also one of the schools used in conjunction with more than one other school, but it is characterized by its ease and simplicity.
Simple classical analysis tools: Some simple methods used in classical analysis are: Support and resistance, trend lines, Japanese candlesticks, and technical patterns. How is classical analysis used?
Classical analysis relies primarily on support and resistance levels. We identify support and resistance on the time frames. Note that the larger the time frame, the more accurate the selection of support and resistance areas.
After identifying the areas, we wait at the desired levels and look for Japanese candlestick patterns or technical patterns, whether continuation or reversal. Based on these, we can enter when the model conditions are met.
There are types of Japanese candles, which are: Doji candle, Pin bar candle, Inside bar candle, Engulfing candle, Hanged man candle, Three soldiers candle, Three crows candle, Morning star candle, Marbu s candle, Evening star candle.
As for the types of technical models used in classical analysis: First, the continuation models: flags, pennants, triangles, cup and handle, and continuation head and shoulders.
Secondly, reversal patterns: head and shoulders, two consecutive tops, three consecutive tops, two double bottoms, three double bottoms, and wedges.
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