Market analysis on the stock exchange. Stock market analysis: principles and methods. Stock market prices and reasons for their fluctuations

Analysis of stock prices Approaches to the analysis of stock prices Fundamental analysis The emergence of technical analysis Since people began to trade various commodities - grain, metals or stocks, for example, traders have noted patterns in the behavior of prices over time, such as tendencies and patterns. Over time, sayings like this were born: "

The Trend Is Your Friend. What do they mean, how true are they, why do people even study stock price charts? Market participants try to get the maximum return on their investments and profit from their trades. They study various methods that would help reduce the risk of losing money and increase the chances of success in trading. Is it possible to determine the moment when it is profitable to buy and when it is profitable to sell securities?

Trading participants study charts and analytical tools to determine changes in the supply and demand for securities. This helps to predict possible price movements and formulate strategies for all financial markets. To understand the Dow Theory, there are six basic tenets that most analysts are already familiar with: 1. Price considers everything. According to the Dow theory, any factor that can influence demand in one way or another

or offer, will invariably be reflected in the price. Regardless of the nature and causes of events, they are instantly taken into account by the market and are reflected in price dynamics. 2. There are three types of trends in the market. The Dow's definition of trend is as follows: In an uptrend, each subsequent peak and each subsequent decline is higher than the previous one. That is, an upward trend should have the shape of a curve with successively increasing

peaks and valleys. Accordingly, with a downward trend, each subsequent peak and decline will be lower than the previous one. This trend definition is still fundamental and serves as the starting point for trend analysis. Dow also identified three categories of trends: primary, secondary and minor. He attached the greatest importance to the primary, or basic. The main trend lasts several years and can be either bullish or bearish.

Second-order movements last from several weeks to several months and can go in the opposite direction to the main trend. Third-order movements are oscillations with a period of several days. 3. The main trend has three phases. A market trend has three phases. Phase one, or accumulation phase, when the most far-sighted and informed market participants begin to buy first. The second phase occurs when investors join the rise in prices,

using technical methods of following trends. Prices are already skyrocketing and the perception of this market becomes more and more optimistic. The trend then enters its third or final phase when the general public gets involved and a media-driven frenzy begins in the market. It is at this stage that those informed investors who bought during the first phase, when no one

didn’t want to buy, they begin to “distribute”, that is, to sell, when everyone, on the contrary, is trying to buy. 4. Indexes must confirm each other. In the original, the Dow meant the industrial and railroad indices. In his opinion, any important signal for an increase or decrease in the exchange rate on the market must pass through the values of both indices. In other words, we can talk about the beginning of an upward trend only if

the values of both indices overlapped their previous intermediate peaks. If this happens with only one index, then it is too early to talk about an upward trend in the market rate. If the indices show different dynamics, this means that the previous trend is still in effect. Currently, this principle of the Dow theory is expressed in the need to confirm signs of a trend change with additional signals. 5. The trading volume should confirm the nature of the trend.

Trading volume, according to Dow, is an extremely important factor in confirming signals received from price charts. If the underlying trend is up, volume increases in line with rising prices. Conversely, volume decreases when prices fall. If the main trend is downward, then everything happens exactly the opposite. In this case, a decrease in prices is accompanied by an increase in volume, and during intermediate price increases, the volume decreases. However, it must be noted again that volume is only secondary

indicator. Buy and sell signals, according to the Dow Theory, are based solely on closing prices. Volume indicators have one main purpose - to determine in which direction volume is increasing. And then this information is compared with price dynamics. 6. A trend continues until it gives clear signals that it has changed.

This position, in fact, underlies all analytical methods following the trend. It means that the trend that started the movement will tend to continue it. Of course, identifying trend reversal signals is not so easy. But analyzing support and resistance levels, price patterns, trend lines, moving averages - all of this, among other technical tools, will help you understand what is happening in the current market.

there has been a turning point in the trend. And with the help of oscillators, signals that a trend is losing strength can be received even earlier. The likelihood that an existing trend will continue is usually higher than the likelihood that it will change. By following this simple principle, you will be right more often than not. The future cannot be reliably predicted based on the past. Technical analysis looks at the likelihood that a given situation will achieve a certain

result and in some cases this probability is very high. The first known case of recording price dynamics with its subsequent analysis is attributed to the inventor of the Japanese candlestick method, Munehise Homma (late 18th century). But the foundations of classical technical analysis and its principles were first outlined in the works of Charles Dow in the late 1890s. These works were published in newspaper articles only in 1900-1902

years. Dow worked at the New York Stock Exchange and used his methods to analyze the American stock market. It was he who later organized the Dow Jones Information Service and the Wall Street Journal. The universal principles of technical analysis described by the Dow allow it to be used for a wide range of instruments in almost all markets, charts can be used for analysis over a period of time from a minute to a year.

The principles of technical analysis are easy to learn and very logical. Modern technical analysis, built on the principles of Charles Dow, is a powerful tool for predicting possible future price movements. Since the time of Dow, it has been supplemented with a quantitative theory - Fibonacci numbers, Gann rays; Elliott wave theory; technical indicators; candlestick analysis; methods

capital management and risk reduction and so on. But his goal is still, as it was a hundred years ago, to reduce the risk of losing money and increase the chances of success in trading. So, learn technical analysis! The subject of the study of technical analysis is the change in the dynamics of stock prices in the past in order to determine what it will be in the future, while fundamental analysis studies the economic forces of supply and demand that cause fluctuations

prices and force them to go up and down, or remain at the existing level. The fundamental approach takes into account all the factors that influence the price of a commodity to determine its intrinsic or actual value (in the stock market, the commodity is securities). Fundamental analysis states that it is this actual value that reflects how much a particular product should actually cost. And if the actual value is lower than the market price of the product, it means

the product needs to be sold, because they give more for it than it actually costs. If the actual cost is higher than the market price of the product, then you need to buy it, because it is cheaper than it actually costs. In this case, they proceed exclusively from the laws of supply and demand. Both of these approaches to forecasting market dynamics attempt to solve the same problem, namely: determining in which direction prices will move.

But they approach this problem from different ends. If a fundamental analyst is trying to understand the reason for a market movement, a technical analyst is only interested in the fact of this movement. All he needs to know is that such a movement or change in market dynamics occurred, and what exactly caused it is not so important. But a fundamental analyst will try to figure out why this happened. And many specialists working with commodities(securities, various

futures, currencies, etc.) traditionally classify themselves as either technical or fundamental analysts. In fact, the border here is very blurred. Many fundamental analysts have at least basic chart analysis skills. And there is even a humorous statement that if you have even once looked at a stock price chart, then you have already performed its graphical (technical) analysis. At the same time, perhaps, there is no technical analyst who, at least in general terms, does not understand

outline the basic principles of fundamental analysis. (Although there are still “fighters for the faith” among the latter, they are called “purists” in the USA; they strive at any cost to prevent “fundamental infection” from entering their technical and analytical sanctuary). The fact is that very often, at first (sometimes superficial) glance, these two methods of analysis actually come into conflict with each other.

Always at the very beginning of some important movements, market behavior does not fit into the framework of fundamental analysis, and at that moment cannot be explained on the basis of economic factors. It is at these most critical moments for general trend, two types of analysis - technical and fundamental - and diverge the most. Later, they will coincide in phase, and in hindsight everything that happened will find a completely reasonable justification, but, as a rule, it is too late for right actions trader.

The only explanation for this apparent contradiction is that the market price is outpacing all known fundamentals. In other words, market price serves as a leading indicator of fundamental data or common sense considerations. At the moment when the market seems to have taken into account all known economic parameters, the new process and, at first almost imperceptibly, and then increasingly, prices begin to react to some

completely new, not yet known factors. The most significant periods of rising and falling prices in history began in an environment where nothing, or almost nothing, in terms of fundamentals, indicated any change. When these changes became clear to fundamental analysts, the new trend was already developing in full force. A competent technical analyst always knows that sooner or later the reasons for market dynamics will become known to everyone. But that will come later.

And now he cannot waste time waiting for this additional confirmation of his own rightness. Thus, the analysis of stock price charts, in fact, becomes a simplified form of fundamental analysis. Fundamental and technical analysis, being a reflection of one process, have distributed “spheres of influence” among themselves as follows: the first studies the underlying causes of the development of macroeconomic phenomena, and the consequence of the dynamics of such development is a change in stock prices, and here, the second

type of analysis, explores the methods and laws of their behavior. The founders of the Western theory of fundamental analysis are considered to be Benjamin Graham and David Dodd, who published the book “Analysis” in 1934 in the USA. securities"The concept of "fundamental analysis" was first introduced in this book,

and also a definition is given as a tool for predicting future stock prices. Later, in scientific publications, fundamental analysis was defined as the process of studying the state of the economy, industry and financial position of an individual company in order to determine market value its shares. Assessment of many external and internal factors that significantly affect the financial and economic activities of the company, the results of which are reflected in the market value of its securities, and

is fundamental analysis. Such factors include the activities of competitors, the political situation in the country, the effectiveness of management, and strict observance of the rights of the company’s shareholders, and financial situation company, as well as many other factors. The main purpose of fundamental analysis is to determine the current market value of a security in order to make appropriate investment decisions.

Here's what William F. Sharp, Gordon J. Alexander, and Jeffrey W. Bailey say in their book Investing: “Fundamental analysis assumes that the “true” (or intrinsic) value of any financial asset is equal to the present value of all cash cash flows, which the owner of the asset expects to receive in the future." In other words, we are talking about assessing the value of the shares of the issuing company based on

analysis of the company's ability to make a profit. The fundamental approach to stock analysis is based on the postulate that stocks successful companies rise in value, while the value of shares of unprofitable enterprises falls. The shareholder is a co-owner of the business, therefore, the more profitable the business becomes, the more expensive the share in this business (shares) should be worth. And, conversely, if a company continuously incurs losses and its debt to creditors grows, then

the value of such a company will decrease. A necessary condition for the effective application of the stock valuation method is information openness and transparency of the economy in general and companies in particular. Any corporation whose shares are freely traded on the stock market is obliged to publish quarterly the results of its commercial activities - turnover, income, main balance sheet items. The better these indicators are relative to similar indicators of other companies, and the more

number potential investors gets acquainted with them, the more investors will want to invest their funds in the shares of this particular enterprise. The more people want to buy, the higher the demand. The higher the demand, the greater the prerequisites for further growth in the price of this company's shares on the market. It follows that fundamental stock analysis is based on the process of collecting and processing information to determine the value of a stock, and this process consists of isolating and assessing each factor influencing

on supply and demand in the stock market. In this case, it is necessary to assess the flexibility of supply and demand, the state of the country’s economy, and identify external factors that determine the demand and supply for a specific asset, for example, oil prices, political events in the world, wars, inflation, the general price level, and the availability of credit. The objectives of fundamental analysis are to determine the degree of undervaluation or overvaluation of the shares of the issuing company based on an analysis of the cash flows generated by the company.

The result of such an analysis will be the adoption of decisions on the management of the securities portfolio. A complete fundamental analysis should be built on a three-level basis: 1. Analysis of macroeconomic factors: o Condition national economy; o Economic policy of the state; o Political situation; o Legal regulation; o Conditions of world commodity and financial markets.

2. Analysis of industry factors: o Competition within the industry; o Current cyclicity; o Life cycle stage and state of the industry. 3. Analysis of microeconomic factors: o Company management; o Business building model; o Market product niche; o Technical condition, technology used; o Scientific and innovative potential; o

Financial condition; o Investment projects; o Dividend policy; o Shareholding structure; o Quality corporate governance; o Transactions with company shares. For a portfolio investor to use fundamental analysis of stocks, it is necessary to have a mature, efficient securities market, which is expressed in the presence of liquidity, sufficient capitalization, developed infrastructure, etc. A generation passes, and a generation comes, but the earth remains forever.

The sun rises, and the sun sets, and hastens to its place where it rises. The wind goes to the south, and goes to the north, spins, spins as it goes, and the wind returns to normal. All rivers flow into the sea, but the sea does not overflow; to the place from which the rivers flow, they return to flow again... What has been is what will be; and what has been done will be done, and there is nothing new under the sun. Ecclesiastes Although the first exchanges were registered in

Europe already in the 16th century, with a slight stretch, the date of formalization of the title “technical analyst” - a profession engaged in the study of stock price charts can be considered relatively recent 1972. It was then that the world's oldest Association of Technical Analysts was organized in the United States. But the history of the emergence of technical analysis itself has its roots in the distant past. And the first public “manual” on technical methods was

a collection of proverbs (in poetic form), published in 1755 in Japan, entitled "The Confidential Financial Papers of the Three Monkeys." The legendary Japanese trader - Munehisa Homma (another version of the pronunciation of the name - Sokyu Honma), being the successor of the famous merchant dynasty and engaged in trading rice futures, approached the matter so professionally that he studied (learned, systematized and analyzed)

rice prices for the entire previous century. He conducted long-term observations of weather conditions on the Japanese Islands. Moreover, he created his own communication system - at an agreed time, he placed his people on the roofs of houses, who transmitted signals along the chain with flags. It is not surprising that he managed to make more than a hundred successful trading transactions in a row (and the transactions then lasted for months). He became the richest man in the empire, financial advisor to the government and

he was awarded the honorary title of samurai. His authority was so great that the people composed a song about him. The books he wrote in the second half of the 18th century laid the foundation for the “candle method,” which is still widely used in Japan. And with the light hand of Steve Neeson, now all over the world. But historically, the results of centuries-long research by Japanese traders became known

world only in the last three decades. The Eastern science of investing and the Western school of chart analysis developed independently of each other, but it is all the more remarkable that they came to many similar conclusions. The same Japanese "candlesticks" and American "bars" are very similar to each other. Although it was in North America that stock prices were once presented in a very unusual, time-independent form - and it was called: point-digit charts, aptly nicknamed by Russian traders

- "tic-tac-toe". But in those distant times, in the eighties and nineties of the century before last, it was called the “book method.” " Book method" was a variant of the old method of reading prices from a ticker tape, known as "tape reading". But already in 1896, the Wall Street Journal began publishing daily stock prices: high, low and closing,

which can be considered the date of birth of the “bar”. In Russian literature, charts made up of bars are called bar charts. Most of the technical methods used today originated in the United States, and in many ways the origin of what we now call technical analysis was laid by Charles Dow. In fact, the overwhelming majority of what we now unite under this term is one way or another

otherwise, follows from the theory of Charles G. Dow. We can safely call his theory the great-grandfather of technical analysis. And in the current world, literally stuffed with computers and the latest technologies As more and more advanced indicators come to the aid of technical analysts, Dow's ideas still find their way. Many technical analysts are simply unaware that quite a few of their supposedly cutting-edge tools are, in fact, based on the principles laid down by

Charles Dow. At the end of the 19th century, Dow initially outlined his ideas in the editorials of the legendary Wall Street Journal, of which he was editor-in-chief. After his death, these unique “stock market tablets” acquired a more organized and complete form in the book of Dow’s comrade-in-arms and successor, William Hamilton. It was published under the title "Stock Market Barometer" in 1922.

And the theory was further developed in the book “Dow Theory” by Robert Rea. Initially, the principles created by Charles Dow were used exclusively to analyze the stock indices he created (read: the stock market): railway and industrial. But later it turned out that with the same success, most of the analytical conclusions

Dows can also be used in the commodity futures market. And over the past thirty years, it has become clear that their universality has been confirmed by international currency markets. And the stock indices themselves, despite the extremely skeptical attitude of Dow’s contemporaries towards them, became independent instruments that determine the temperature of the national economy or a particular industry. They were put into “operation” by all developed, and not so developed, countries of the world.

They have become true indicators looking into the future. And if at least one of us had taken the Russian RTS stock index seriously at the beginning of 1998, then perhaps he would have been able to avoid the consequences of the serious August catastrophe. When talking about the history of the development of technical analysis of stock prices, one cannot fail to mention Ralph Nelson Elliott. He called himself a follower

Dow considered his “Wave Theory” to be a development of his “principle of accumulation and distribution.” It was Elliott who introduced the concept of the “golden ratio” into technical analysis, which made a real revolution. For the first time, rules were proposed for the exact numerical relationship between the various phases of the rise in stock prices and their subsequent fall. Believing them to be true driving forces exchange prices in the long term (meaning years) are fundamental economic factors, then in the medium and short term

At intervals it is dominated by the real element of feelings. Baruch, an adviser to American presidents who became a multimillionaire through trading the stock market, had some surprisingly accurate words about its nature: “But what is really imprinted in the fluctuations of the stock market is not the events themselves, but the human reaction to these events. Reaction on how millions of individual men and women think current events will affect

for their future The stock market is, among other things, people. People trying to guess the future. And it is precisely their impressionability that makes the stock market such a dramatic arena in which men and women come forward with their conflicting judgments, their hopes and fears, their strengths and weaknesses, their greed and ideals." And when, at different time intervals, we suddenly notice certain patterns, then involuntarily

you begin to think about the question: what does technical analysis actually study? Economic events or human emotions resulting from these events? Renowned trader Jess Levermore noted that the whole is better seen from afar. Technical analysis allows us to take a step back, as it were, in order to assess the situation not only in the market, but perhaps in life, in a new and perhaps deeper way. The economic behavior of the masses is probably correct

the answer to our question. And if we consider the stock price as the most vivid and sensitive indicator of this behavior, then technical analysis in numbers measures the immeasurable - emotions: fear and greed, stupidity and wisdom, patience and intolerance. This is a beautiful and very interesting science. Life Science! IN recent years, with the development of computer technology, many sections of technical analysis, seemingly already firmly forgotten, have found new life due to the dramatic simplification of their calculation, as well as

free automatic testing of their effectiveness over large historical intervals.

So, what is the meaning of the words - technical market analysis?

Technical analysis- is considered a generally accepted method in studying the Forex market, aimed at predicting the movement of exchange rates, based on the fact that the market has a reproducible memory, since the future direction of the exchange rate is influenced by identified patterns of market behavior in the past.

In technical, basic market analysis, a graph of price movement and the entire volume from past time to the present is taken for analysis, without taking into account any technical or market factors.

Application of technical analysis

In the modern financial world, technical analysis of the stock market, is a very effective and constantly used method, used by many directly in their trading. Since technical analysis consists of forecasting the development of the market situation in the future using analytical methods associated with price charts. In addition, historical indicators of the market price, as well as volumes and open currency interest of trading on the market are taken as the primary input data.

In other words, technical analysis of the stock market determines its future, the upcoming course of events (for example, the volume of transactions). The main factors for obtaining a trade indication are informational market indicators for the past.

Technical indicators and graphs of constant volatility of currency prices, for any time interval ahead of the conclusion of transactions, are the main tools of technical analysis in the market.

Thus, the use of technical analysis of the stock market becomes possible both for long-term strategic trading and short-term trading, concluding all transactions during the day.

Important tools of technical analysis in the market are indicators obtained as a result of mathematical calculations. They are based on historical price indicators of a currency. By analyzing them, an experienced trader has the opportunity to identify future market price movements and, based on this, make the right trading decision.

Digressing from the topic, I would like to note that, in fact, the dream of all traders - beginners, intermediate and professionals - is to have a trading system that will allow you to trade on the Forex market competently and make a profit. And it is not so important what methods the trader will use to predict price movement, whether it will be technical analysis or other strategies, the main thing we are all striving for is a positive result.

Earn a lot, a lot! After all, Forex is the fastest growing and profitable business all over the world, but also the most risky. Nowhere can you earn a hundred, a thousand or even ten thousand dollars in just 10 minutes. In the Forex market this is possible and most importantly it is legal!

Beginner mistakes in using technical analysis

History of the gradual development of technical analysis

Initially, when there was no modern computer equipment, And mathematical methods no one tried to apply the analysis due to the sufficient complexity of the calculations; for a general analysis of price fluctuations, traders and analysts did everything manually. They used various slide rules, with the help of which they drew graphs with straight lines laid out.

A little later, they were calculated technical features in the relationship between such lines and price charts. This is how models and figures appeared. After which the need arose to move away from the initial straightness of all trend lines and accompanying models, and analysts, still manually, calculated many average prices on charts, which were later successfully used in the technical analysis of the stock market.

And only with the advent of personal computers did it become possible to accurately calculate and use many methods. Currently, all calculations in technical analysis are performed on computers, which facilitates easy modernization of service tools for various types of market analysis.

Patterns of technical analysis

The currency market takes everything into account. That is, the price itself is a certain consequence and comprehensive reflection of all the guiding forces of the market.

History repeats itself. To understand the future, it is necessary to study the past. And this applies not only to technical analysis. It has already been proven that many configurations on price charts from the past appear on them in the future, moreover, this happens quite often.

More effective technical market analysis is also possible with. As mentioned earlier in the trend, built in the form of Japanese candles, you can see not only the price movement. These candles have hidden capabilities, which for some reason many traders do not use in technical analysis of the stock market or, in general, do not know about these secrets... But this is very important point and they cannot be neglected.

Price movements are constantly subject to trends. The market atmosphere consists of periodically changing periods of rising and then falling prices.

The trend is divided into several types: bullish, in other words, rising, bearish, that is, falling, and sideways (also called neutral).

Also, ascending and descending continuation time is divided into 3 types:

1) Main or (also called primary), its peculiarity is that it lasts longer than all the others (up to 1 year).

In turn, the main trend is subdivided for 3 phases:

Origin. This phase, when a trend rises, is characteristic of the rise stage, used by experienced traders to open many positions when analyzing the Forex exchange.

Continuation of movement(trend takeoff). At this phase, the market takeoff is clearly visible. Here, all participants, as a rule, try to open profitable positions.

U-turn. This period usually warns of a decrease in market activity. Here the distribution of accumulated deposits occurs and many traders begin to close positions, locking in profits.

2) Middle or (also called secondary) 1 - 2 months pass, in some cases even more.

3) Minor, usually passes within a period of several days to several weeks.
It happens that the secondary trend corrects the change in the primary price trend by 30 or even 60%. In this regard, it is usually called a corrective trend.

Medium and small trends in varying quantities can be within the main (primary) trend.

4) Confirmation of the trend, shows its volume. Technically, this is characterized by the total amount of currency in circulation during 1 day on the market. A currency that has liquidity is of greater interest to traders and, accordingly, the trading volume for this currency will be greater than for others.

In technical analysis of the stock market, an experienced trader often looks at the trading volume of a particular currency, and its low volume serves as a stop signal calling for the closure of many positions. If a currency pair is traded and its volume is large enough, it represents open interest in the market.

Typically, information about open interest or volume is obtained from electronic media. These are well-known: Reuters, Bridge Information Systems, Bloomberg.

5) The presence of a trend ends with confirmation of its breakout line.

Technical analysis is a very powerful tool in predicting price movements, and its correct application always gives the expected result!

Hello, dear readers of the blog site! This article will introduce you to technical analysis— the most effective tool to predict price behavior.

You will learn why the vast majority of traders use technical analysis in stock trading. Technical analysis — a set of tools for predicting price changes based on historical data. For analysis, indicators, various graphical constructions on the chart and volume are used.

The basic postulate of technical analysis is: the price takes everything into account. All economic and macroeconomic events, market expectations and any other news are already included in the price. At first, it is difficult and uncomfortable for beginners to come to terms with this postulate, but it is so. That is why, in technical analysis, work is carried out exclusively with the price chart, without taking into account any fundamental and economic data.

The main emphasis when predicting the behavior of an asset in the future is on visual work with the price chart. This is connected with another postulate: history repeats itself.

Traders analyze the chart and look for repeating patterns that suggest where will he go price further.

Depending on the tools and methods used, technical analysis can be divided into subgroups:

candlestick analysis;
figure analysis;
analysis using indicators;
wave analysis;
volume analysis.

All subgroups can act separately or complement each other. It is not uncommon to see traders using different analysis methods at the same time.

Candlestick analysis

It is called candlestick because the chart is depicted in the form of Japanese candles. This method was invented by Japanese rice traders in the 18th and 19th centuries. There are many candlestick patterns that can tell a trader about an upcoming market reversal or continuation of movement.

For example, there is this model:

Learn to trade. Go ahead.

Notice how, after non-stop growth, a black candle appears with a long upper shadow. This model warns the trader that the buyer’s strength is running out, and it’s time to take a closer look at sales. The market begins to fall and completely covers the previous growth.

Figure Analysis

They have very good predictive power for future price behavior. Using them you can find out quite accurately where the price will go, which is very important when closing a transaction.

Example of a descending triangle pattern:

Descending triangle figure

Positions when trading using technical analysis figures are opened after a breakout. We strongly recommend that you pay attention to the pattern analysis. With their help you can trade very successfully.

To identify shapes, you can use a program that will detect them automatically. This program is called . Install it and it will give you signals when there are good times to open a trade.

Price analysis using indicators

This analysis uses technical indicators that are available in every trading terminal. In the most famous trading platform, indicators are very conveniently divided into groups:

Groups of indicators in the MetaTrader trading terminal

The screenshot shows indicators from different groups. The role of a trend indicator is , the oscillator is , and volumes are also presented.

Beginners make a big mistake when they use too many indicators on the chart. This looks terrifying :)

Agree that it is very difficult to analyze a chart when the price is not visible due to such an abundance of indicators. This comes from uncertainty in trading. Most beginners think that the more indicators on the chart, the more accurately they can predict the price. This is wrong.

A large number of indicators significantly complicates visual analysis. All indicators contradict each other, and there is nothing left in the head but porridge. We recommend that you do not use too many indicators. One from each group is sufficient.

Wave analysis

A separate group are the so-called “wave traders” - traders who use the Elliott wave theory as the basis of their analysis. According to this theory, the market moves in cycles and has a certain wave structure that always repeats itself.

Elliott waves

The main difficulty of this type of analysis is that it is difficult for a trader to determine which wave the market is in at the moment. The theory of waves is quite complex and involves different interpretations.

Using volume analysis, traders try to determine the prices at which the volumes of large trading participants passed. There are different types volume analysis, but the most popular is cluster analysis.

Volumes are collected into clusters according to certain configurable parameters. As you have already noticed, in this type of analysis, volumes are not displayed in the usual vertical view, but in horizontal.

Which analysis to choose is up to you, but we recommend studying everything and then deciding what is closer to you.

If you have questions, welcome to the comments :)

Good luck in trading!

Leading broker on FOREX market -

For short-term trading on the stock market, behavioral information about stock quotes of a particular financial instrument always represents a certain value for the trader.

Often a trader trades a small list of them and for quite objective reasons. Starting from the most banal - “it’s easier this way”, ensuring maximum concentration on instruments already well studied by him, to processes physically independent of him personally, for example, such as the presence of a liquid market or any individual non-standard characteristics inherent in the instrument being traded.

And here the question arises - “what does well-studied mean?” . What parameters are known to a trader that allow him to say that he understands a particular financial instrument relatively well?

In the process of working on the stock market, those who trade begin to notice over time certain features tradable asset. These include such indicators as volatility, volume, liquidity, price behavior at different hours trading session, characteristic percentage change during the day, etc. etc.

The parameters listed above are important components in the risk management system trading activities every professional trader. Knowledge and understanding of these things does not appear from just one glance at the chart of a particular exchange asset. Only through long practical hours of observing it (more than one day) or a deep analysis of the statistical characteristics of a financial instrument.

It was to speed up the process of getting to know the main behavioral features of a particular exchange asset that a desire arose to create a universal model for quantitative analysis of financial instrument quotes.

The indicators used in the program are basic, and the formulas for their construction are absolutely open.

Thus, if you wish, you can supplement the program with your own indicators and diagrams.

This application will become your integral auxiliary tool in the risk management system when trading on the stock market!

Details can be found here:

Happy investing everyone!

Sincerely,
Alexey

Trade. The ability to predict price movements better than other market players can make a trader a wealthy person. In order for forecasting to be as reliable as possible and forecasts to be justified, traders use stock exchange analysis. There are three main methods of stock analysis:

Methods of stock analysis differ primarily in the tools used for forecasting. Let's look at each type of analysis.

In the most simplified understanding, fundamental analysis comes down to an attempt to answer the question: how good is the economy of the analyzed country? predicts the movement of the national currency, guided by a simple relationship:

Therefore, the main task of a trader using fundamental analysis is to form an informed opinion about the economy of the country whose currency he is going to trade (if it comes to). Fundamental analysis of the stock market involves studying the financial statements of the company whose shares the trader intends to trade, and studying the dynamics of its development.

The main macroeconomic data that a trader must analyze as part of fundamental analysis are:

Central Bank interest rate.

Dynamics of growth of the country's money supply.

Level of confidence in the currency on the world market.

The source of data can be anything: newspapers, forums, professional analytics on broker websites, television programs. The disadvantage of all the sources listed above is that the trader has to combine and summarize the data, which is a rather labor-intensive process. Therefore, most traders who prefer fundamental analysis use economic calendars, where it is already given in order and can be filtered if necessary.

This is what the economic calendar looks like:

The trader is immediately offered information about the importance of a macroeconomic event, the previous value of an economic indicator, and analysts’ forecasts.

If you click on the indicator itself (for example, on the New Zealand food price index), you can see the dynamics of the indicator over recent periods:

Please note that the calendar offers to show even more data - if necessary, you can look at the history for the last ten years.

There are several methods of fundamental analysis:

1. Method comparisons. Great for Forex trading. The trader, knowing which macroeconomic indicators are universal, compares their values for two countries whose currencies form a pair. The universal indicators are GDP and interest rate. A comparison of indicators makes it possible to predict the price movement of a currency pair, precious metals and raw materials.

2. Seasonality. The trader relies on the seasonal factor. For example, the prices of shares of agricultural companies and energy resources depend on seasonality. The prices of these assets in turn affect the value of the national currency.

3. Deduction. The deduction method is based on the synthesis of macroeconomic data - the trader collects as much information as possible about the economy of a particular country and, based on it, draws a conclusion about its general condition.

Technical stock analysis

By patterns. Patterns are repeating geometric figures that can be used to predict market behavior with high probability. Large number patterns can be found here - . A classic example of a pattern is “head and shoulders”:

It is clear that the highest peak of the graph is the “head”, and the peaks on both sides are the “shoulders” (it is important that the shoulders are at approximately the same height).

You need to open a short position when the right shoulder crosses the so-called line neck, that is, the lower of the inclined lines of the channel. Take profit should be set using height from the peak of the head to the neck line:

The take profit setting level on the chart is marked with a green line.

Technical analysis is valued by short-term traders more than fundamental analysis, as it eliminates the need to summarize macroeconomic indicators and wait for reports to be published.

Exchange volume analysis

Trade volume analysis is gaining popularity. Proponents of this method justify their choice by the fact that the fundamental and technical methods consider the consequences, while volume analysis considers the reasons for price formation.

Volume– this is the number of contracts that were sold or purchased over a certain period. The volume graph is presented in the form of a histogram:

Volume analysis is to identify at which price levels the greatest interest was observed. When examining volumes, it becomes noticeable that the price of an asset moves from one large volume to the next.

There are two types of exchange analysis of market volume: horizontal and vertical.

At vertical analysis the number of operations performed during one timeframe period is displayed in the form of histogram bars. The vertical analysis indicator has the usual form:

Horizontal analysis accumulates data not for a period, but for a certain price level.

It is clear that horizontal analysis shows the ratio of purchased and sold contracts. Another popular volume indicator works in approximately the same way - indicator market sentiments.

This indicator does not provide information on the absolute number of transactions concluded over a period of time or at the price level, but it allows you to analyze the psychological mood of market participants. Total quantity of concluded transactions for the period is taken as 100%, after which the transactions are divided into “bearish” and “bullish” and are presented to the trader in the form of a ratio.

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