How to analyze a specific stock or currency pair using technical or fundamental analysis:
Technical analysis
Aims to study price movement based on historical data using charts.
Main steps:
1. Choose the appropriate time frame:
• For short-term speculation: Use small time frames (5 minutes, 15 minutes, hourly).
• For long-term investment: Focus on larger time frames (daily, weekly, monthly).
2. Trend analysis:
• Uptrend: Highs and lows gradually rise.
• Downtrend: Highs and lows gradually decrease.
• Sideways trend: Horizontal movement with no clear direction.
3. Use technical indicators:
• Moving Averages: To determine the general direction of the price.
• Relative Strength Index (RSI): To know the state of overbought or oversold.
• Bollinger Bands: To determine potential support and resistance levels.
4. Draw support and resistance levels:
• Support: A price level from which the price is expected to rebound upwards.
• Resistance: A price level from which the price is expected to bounce back down.
5. Analyzing Chart Patterns:
• Reversal patterns (such as head and shoulders).
• Continuation patterns (such as triangles).
6. Checking Volume:
• Increased volume during a break of a support or resistance level confirms the breakout