Introduction to Technical Analysis

 Introduction to Technical Analysis 

 There are many different methods and tools utilized in technical analysis, but they all rely on the same principles - that price patterns and price trends exist in the market and that they can be identified and turned into profit opportunities.  The pure technical analyst is only concerned with price movements, NOT the reasons behind the price movements (i.e Fundamental supply and demand).  

 Prices Move in Trends

- Prices can move in three directions - they can move up, down or sideways. 

- A trend is a term used to describe the persistence of price movement in one direction over time. 

 

Recognizing Trends 

-The easiest way to spot trends is via trend lines, drawn below price lows or above price highs. The MetaTrader 4 Platform allows users to effortlessly trace trends using Equidistant Channels.

 

To activate, Simply press the Equidistant Channel button and drag your cursor from the lowest point to the highest point. 

 

Moving Averages

Another effective method to spotting trends is a moving average. To add a moving average to the chart: in the top toolbar, select “Insert”, “Indicators”, “Moving Average”. 

 

In the “Moving Average” window, select the desired period, color and style

-To activate press “OK”.

 

Moving Average Example 

 -Here is a chart showing a moving average with relatively low period of only 10 units.