"Crack the Code of Market Trends: With Technical Analysis"

    TECHNICAL ANALYSIS OF THE FINANCIAL MARKET

In finance, technical analysis is a method of studying past market data, like price and volume, to predict future price trends. It shares tools with behavioural economics and quantitative analysis but contradicts modern portfolio theory. The efficient-market hypothesis disputes the effectiveness of both technical and fundamental analysis, claiming that stock prices are unpredictable. Research on the benefits of technical analysis has produced mixed results.

"ECHOES OF THE PAST: WHY HISTORY HAS A HABIT OF REPEATING ITSELF"

Technical analysts believe that investor behaviour often repeats itself, creating recognizable price patterns on a chart that can predict future price trends. The technical analysis considers price trends and may also use surveys of investor sentiment to anticipate trend reversals. For example, if a survey shows overwhelming bullishness, it suggests that most investors have already bought the market and there may be few buyers left. This could lead to more potential sellers than buyers, and prices may trend down, making it an example of contrarian trading.

"DECODING THE MARKET: TYPES OF CHART IN TECHNICAL ANALYSIS"

There are different types of charts used in financial analysis.

• The candlestick chart: originally from Japan, emphasizes the relationship between opening and closing prices by filling the interval between them.
• Line charts: connect closing prices with line segments, and can also be drawn using open, high, or low prices.
• OHLC charts, or bar charts: display the high and low prices as a vertical line segment with tick marks indicating the open and closed prices. Point and figure charts use numerical filters and ignore time in their construction.