Maximize profit with chart analysis
What is a Chartanaylse?
The chart analysis attempts to forecast price developments based on existing trends and price developments. For this purpose, price charts are used, which reflect the price developments of a price over a certain period of time.
What can chart analysis do?
Using visual and mathematical instruments, technical chart analysis can help you find optimal entry and exit points, minimize losses, and increase profits. Of course, even the technical chart analysis cannot reliably foresee the future. It only takes into account technical tools for forecasting and does not include external indicators that influence the price. However, if unforeseen major events are not, it can most likely describe the future movement of a course.
In order to implement this, it is important to interpret a price chart properly. To support this, there are many tools, tools and methods recommended by financial experts. Tradersclub24 introduces you below the most important terms and formations you should know for chart analysis.
Recognize formations and anticipate trend changes based on chart analysis
Another popular method of visual chart analysis is to recognize and exploit repetitive price formations. The course of the share price reflects the behaviour of all market participants. Traders and investors expect these price patterns to repeat themselves.
The most well-known formations are the shoulder-head formation as well as double top & double-bottom formations.
In the shoulder-head formation, the course runs along a trend line, forming three highs or lows in the other direction, of which the middle one strikes the strongest (similar to a head between the shoulders). This formation is a common indicator of an upcoming turnaround.
Double Top and Double Bottom formations also announce a turnaround. Here the price first rises to its highest or lowest point, then moves back a bit to reach the previous high or low again. If this is not exceeded, the price can fall sharply or rise.
In addition to these two known price formations, there are many others, some easier to recognize, others more difficult. Only through a targeted training you are able to use them for a successful trading.
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