Technical Analysis and Stock Market Charts

Once you have opened your DEGIRO securities account, you then have access to more than. Fifty stock exchanges in more than thirty countries. Stock Technical Analysis In Australia The next question is which stock(s) to buy. Many investors already know in which financial product(s) they want to invest on the stock market. Others prefer to spend more time studying the financial instruments in which they want to invest their money.

When it comes to choosing a stock to buy on the stock market, there are two. Schools of thought technical analysis and fundamental analysis. Through this article, you will (re)discover the main concepts of stock market technical analysis, and learn how to use certain graphical analysis tools. Available on our trading platform (accessible via your DEGIRO securities account). You can also read our article on fundamental analysis in the stock market.

Technical Analysis Of Stock Market

Technical analysis does not answer the question Which stock to buy. But to the following question When to buy a share on the stock market. For this, it is based on the statistical study of the latest stock market transactions to which the action concerned has been subject.

Technical market analysts don’t ask whether a stock’s price is overvalued or undervalued. Their purpose is to predict the evolution of the financial markets, and therefore to anticipate. A future rise (or fall) in the price of the share concerned, according to the history of the last transactions. These are compared to the trends observed on the variation of the share price in the past.

The Different Types Of Stock Charts

The DEGIRO trading platform gives you access to a wide range of options. For customizing stock charts, especially those representing the price history of your shares. For example, you have the possibility to modify the time range, as well as the type of graph. By default, you will see the simple line chart, but you can also set a Japanese candlestick chart or an OHLC (Open-High-Low-Close) chart. Which give more detailed information for a given time frame, other than the price of share at the end of each trading session (closing price).

How To Analyze A Stock Market Chart?

An effective starting point for an investor new to technical analysis in the stock market is to learn some of the patterns commonly seen when studying stock charts. These general directional movements are called trends. It is essential to learn the basics to start with technical analysis, in order to be able to carry out an efficient study of stock market charts.

The uptrend, like the downtrend, is quite easy to identify. If you analyze the price of any stock over a long enough period, you will most likely identify these two trends.

The Different Indicators Of Stock Market Chart Analysis

The trading platform (accessible via your DEGIRO securities account) also gives you access to many different graphical indicators, to complement the stock charts representing stock prices. On each product page, you can click on the “interactive chart” button and a new window will open.

What Is A Moving Average?

Moving averages are arguably the most common indicator used by traders for technical analysis in the stock market. Moving averages are weighted averages used to study the current direction of a trend. The use of a weighted average value over a period makes it possible to smooth out daily fluctuations, and thus to give a more readable indication of the general trend. Via the trading platform, you can set a moving average over a defined period (n).

Trend Chart Indicators

One of the most popular trend chart indicators is the MACD  Moving Average Convergence/Divergence. This indicator is composed of a short-term and a long-term moving average. When the short-term average is higher than the long-term one, then the momentum is positive. On the contrary, the periods for which the long-term average than the short-term signal a bearish momentum.

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