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• Trading techniques

What sense does the market move?
What is the potential of rising or decreasing of a share? What far will the market grow? Or go down ?

These are basic worries that all active traders will ask themselves before intervening on the markets.
To do so, traders try to answer those questions by basing themselves on graphics or mathematics methods which origin often comes from famous mathematicians or theoreticians (Example : John Bollinger).

All those mathematics methods are used to define the rising or decreasing potential of a share.
All those precepts are associated to a so-called science, that we call technical analysis.

The founding mechanisms of technical analyses enable to identify the buying and selling opportunities.
The technical analysis offers a simple and efficient method to understand the evolution of the financial markets.
The following principles will allow you to better understand the evolution of a share by using the bases of the technical analysis that are trends, supports, resistances and oscillators.

The trend can be given by a simple observation of moving averages. Moving averages, which aim is to smooth the market prices, allow us to rapidly give a sense to the prices variations for it is based on the past.
The trend on the short-term will be given by the moving average at 20 days. The trend on the medium term will be given by the moving average at 50 days.
The trend on the long term will be given by the moving average at 200 days.

After we have drawn our trends, we are going to draw or support and resistance levels which in reality represent the best place to buy or sell a share.
To draw straight-line of support or resistance on a curve representing the closing market prices of each session, all you have to do is to look for the horizontal alignments of points that are at a close market price. It is not necessary for the points of these market prices to have an identical market price, the differential tolerance between the curve and the support or resistance depends on the time of the observation of the curve.

Now that we have anticipated the sense of the trend, we are going to devote ourselves to the study of oscillators to detect the over-buying and the over-selling zones. Oscillators (RSI and Stochastic...) help identify over-bought or over-sold markets; while the moving average will inform us about the sense of the market trend.
The use of oscillators mostly helps us detect the trend reversal.