First pitch in technical analysis

 

The technical analysis it is the analysis of the currency movements of a share during a given time.

To start we will transfer the securities from closing rates of a share on a graph for nths.

 

 

This basic graph makes it possible to see the development of the exchange rate quickly but to make an analysis we need different tools.

Moving average is very interesting tools; an arithmetic moving average (abbreviation MY) is quite simply the average of the exchange rates over a given period.

in the graph below we trace the , and , i.e. the moving average of the 50 last meetings then of the 20 and 7 last meetings.

 

One notices immediately; that the is less reactive with the exchange rate than the and than with the .

Thus one will use the for the basic tendency and the for the thorough tendency.

The smaller the selected period of time is, the more it is reactive.

Many uses also the ; you must according to your style investor choose your moving average, which you will use.

Let us analyze this graph briefly.

The average informs 50 us that the tendency is bull of at the beginning of July until mid-November, then it stagnates until the end of December.

This stagnation or consolidation is used to strengthen the acquired rise these previous months.

The purchase of a share is done on a bullish tendency and the sale on a consolidation or a departure in bearish tendency.

Now we will pass to a chart more complete and largely used by the .

 

The representation in Japanese candlesticks:

 

 

This representation takes into account, in addition to closing rates, the price opening, low and highest of the day.

 

Each day is represented by a candle made up of a body of color, a high fuse and a low fuse.

The color makes it possible to know if closing rates were above or in lower part of the opening price, therefore the body is of #F56D8F color for one day of rise and it is #F66E90 for a fall.

The high fuse corresponds to highest of the day and the low one for low.