#BinanceAlphaAlert
📊 What is technical analysis?
Technical analysis is the study of past price movements on charts with the aim of predicting future trends. It is based on the principle that history repeats itself and that the market moves in trends that can be analyzed and understood.
🔍 Tools of technical analysis:
1. Support and resistance:
Support: It is a price level where the price is expected to bounce upward.
Resistance: It is a level where the price is expected to bounce downward.
🔁 Example: If a stock bounces from the level of 100 riyals several times, this level is considered support.
2. Trends:
Uptrend: Higher lows and higher highs than previous ones.
Downtrend: Lower lows and lower highs than previous ones.
🟢 Example: If a stock moves from 50 → 55 → 60, this is an uptrend.
3. Candlestick:
Helps in understanding market psychology through patterns like the hammer or engulfing.
📌 Example: A hammer candlestick after a decline may indicate the beginning of a bullish reversal.
4. Technical indicators:
Like RSI and MACD, help confirm signals.
📈 Example: If RSI is below 30, the stock may be in an oversold area.
📌 Advice for beginners:
Start by learning to read charts and understand support and resistance, and do not rely on just one indicator. Combine tools to strengthen your decision.