Technical analysis is a method that attempts to predict future price movements of an asset based on its past price movements and trading volume. Here are the basic steps:
Examining Price Charts:
Examine price charts in different time frames (hourly, daily, weekly, etc.).
You can use different chart types, such as candlestick charts, bar charts, or line charts.
Identifying Support and Resistance Levels:
Identify support and resistance levels by identifying previous lows and highs on the chart.
These levels indicate possible reversal and continuation points of the price.
Using Moving Averages:
Moving averages are used to determine the trend of the price. For example, the intersection of a short-term moving average and a long-term moving average can indicate trend changes.
Reviewing Indicators:
You can identify overbought or oversold conditions using technical indicators such as RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence).
Recognizing Chart Patterns:
Try to predict price movements by examining chart patterns such as double bottom, triangle formations, head and shoulders.
Analyzing Volume:
Trading volume is important to confirm price movements. Large volume can indicate the strength of price action.
Following News and Events:
News and events can affect prices. Follow important announcements and developments.
To be successful in technical analysis, practice, discipline and continuous learning are important. Additionally, before investing, you need to determine your risk tolerance and create your strategy accordingly.