What's Stock Indices Technical Analysis?
Indices Technical Analysis Strategies
Indices Technical Analysis is the science and art of forecasting future stock indices price movement based on historical indices prices combined with Indices technical indicators. Indices Technical Analysis Course - This Indices Technical Analysis study often interprets the stock indices price data by studying a stock indices chart and looks for stock indices patterns & stock indices signals for buying & selling.
The history and origin of this Indices Technical Analysis technique dates back several hundred years to Japanese & Arabian markets, Indices Technical Analysis involves using math manipulation of stock indices price data to optimize buy and sell points. Use of this type of Indices Technical Analysis in modern computerized trading programs has become increasingly popular.
The information which the is studied and assessed is stock indices price movement so as to plan an entry or exit into a indices trade. The goal is to determine how the stock indices trading market is trending.
What Does It Really Measure?
This Indices Technical Analysis - studies the supply and demand of indices in an attempt to determine in what direction the stock indices price will continue to move in.
While stock indices technical analysis deals with stock indices price and indices indicators it is just a measure of investor sentiment.
What to Look For
Find the Indices Trend
The motto of stock indices technical analysis is: "the indices trend is your friend." Finding the prevailing indices trend will help you become aware of the overall direction and offer you better indices trading opportunities - especially when shorter-term indices market movements give conflicting trading signals.
Daily stock indices charts are more ideally suited for identifying long-term indices trends. Once you have found the overall direction then you generally open buy or sell indices orders in that direction.
Stock Indices Trend or Range
No matter what stock indices price is doing, it usually falls into one of these two categories. If the indices price is moving in a pattern or in one direction, you can use indices trend lines to analyze where the stock indices price should go. If the stock indices trading market seems to be bouncing back and forth in a range, you can use support and resistance lines to make note of where to open buy or sell stock indices orders.
One of the greatest goals of Indices Technical Analysis studies and methods in the stock indices trading market is to determine whether a given indices will move in a indices trend in a certain direction, or if indices market will move sideways and remain range-bound. The most common Indices Technical Analysis method to determine this is to draw indices trend lines which are used by stock indices traders to determine whether or not the current direction of the market will continue. Many investors avoid trading in a range-bound stock indices market & only buy or sell indices when there is a indices trend since this makes trading more predictable.
For stock indices technical analysts the most important indices trading tool is the stock indices chart. The purpose of a stock indices chart is to provide a visual representation of indices trading price quotes (drawn on the y-axis) against time (drawn on the x-axis) for indices, this stock indices chart is used as a basis for making predictions of the future stock indices price direction.
Indices Trend Lines
The direction of these trend lines determines the stock indices trading market direction. A indices trend line drawn moving upward represents a bullish market and a indices trend line drawn moving downward represents a bearish market.
Support & Resistance - Indices Technical Analysis
Support and resistance levels are points on a stock indices chart which tend to act as boundaries. A support level is usually the trough or low point on a stock indices chart whereas a resistance area is the high or the peak point on a stock indices chart. These support and resistance areas are used as buy/sell points.
Moving Averages - Indices Technical Analysis
Moving averages stock indices indicator are used to show the average stock indices price over a given period of time. Moving Averages are called moving because they reflect the latest average in the movement of the stock indices prices.
Strategy
To be a successful indices trader you need to create a indices trading strategy. There is not one set Indices strategy that is good for all stock indices traders. But Rather, each indices trader needs to develop their own indices trading strategy.
Indices Technical Analysis is the most widely used strategy in the stock indices trading market and is used to decide the entry and exit points.
Market movements have identifiable repeating stock indices price patterns that have been studied over many years providing a thorough understanding of these stock indices market trends and how they can be used to form the basis of a good indices trading strategy.
There are many Indices Technical Analysis tools available provided to facilitate this study
The beginner indices trader is advised to study each Indices Technical Analysis tool separately to get working knowledge of the concepts & application for each Indices Technical Analysis study. Once you understand one Indices Technical Analysis method, keep on using it while studying others. Each Indices Technical Analysis tool tends to combine well when used with other Indices Technical Analysis Tools.
Support & resistance levels are also used in many indices trading strategies. Support is defined as the level that is repeatedly seen as the bottom (floor) - when the stock indices price reaches this level it tends to bounce. Resistance level is the ceiling, the upper boundary (ceiling) that indices price rarely trades above.
Support and resistance levels are valid for a period of time, until they are broken, When the stock indices trading market breaks through these support and resistance levels, the stock indices price is expected to continue in that direction. For example, if the stock indices trading market rises above the previous resistance level, it is seen as a bullish stock indices signal and the bullish movement should continue upwards.
Longer indices chart timeframes establish more stronger support and resistance levels. Traders can use these support and resistance levels to determine when to enter a trade or exit an open position.
Moving averages is another common stock indices technical indicator used as to create indices trading strategies. Moving averages try to smooth out short term indices market price fluctuations giving a clearer picture of the stock indices price movements and trends. Traders can draw SMA to determine stock indices price movement tendency to move up or down -indices trend.
If stock indices price crosses above the simple moving average then it will keep on moving up.
If stock indices price crosses below the SMA then it will keep moving down
These are examples of indices trade strategies that can be used individually or combined.
Indices Traders use two or more Indices Technical Analysis studies to determine when to open an order when both Indices Technical Analysis indicators support the same direction. If several Indices Technical Analysis indicators show that the stock indices trading market is moving towards a particular direction the a trader can trade with more reassurance than when he is only relying on a single Indices Technical Analysis indicator.
Fundamental analysis should also be used together to reinforce Indices Technical Analysis findings, or vice versa. A trader should ideally take into account two or more Indices Technical Analysis indicators when developing a Indices Trading Strategy.
Every indices trading strategy should provide clear guidelines about when to enter and exit a buy or sell indices trade position, how much loss can be accepted if the stock indices trading market moves in the other direction and how much profit is expected. Following these simple Indices Technical Analysis guidelines can help you become successful in stock indices trading.
