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My Personal Technical Analysis Setup that I Use Most of the Time.

Two important approaches are used to evaluate a stock in stock market. Fundamental analysis and technical analysis, fundamental analysis is used to evaluate the stock by keeping long-term investment in mind, on the other hand, technical analysis is used by traders or investors to determine the instant fluctuation and price determination In a stock.

In technical analysis, more emphasis is placed on arithmetic. Under this, some technical indicators are studied. With the help of these indicator we can know the price trend of a stock. Whether a stock is in overbought or oversold situation, to determine a stocks resistance and support zone we use these technical indicator.

Here I am showing some of my favourite technical indicators that I use in a technical analysis study.

1. MACD (Moving Average Convergence and Divergence).

Moving Average Convergence Divergence (MACD) is a trend-follow moment indicator that shows the relationship between the two moving averages of the value of the security. MACD is calculated by reducing the 26-period Exponential Moving Average (EMA) from 12-period EMA. The result of that calculation is the MACD line. The MACD's nine-day EMA, called "Signal Line", is then plotted on top of the MACD line which can act as a trigger for buying and selling signals. When MACD passes above its signal line and sells it, or reduces it, then the stock can buy when MACD passes below the signal line.

Whenever 12-period EMA is above 26-term EMA and 12-period EMA is below 26-period EMA, then MACD has a positive value. MACD is far above or below your baseline, indicating that the distance between the two EMA is increasing. In the following chart, you can see how the two EMA applied to the price chart corresponds to the MACD (blue) above or below its baseline (red dashed) in the indicator below the price chart.


MACD is often displayed with histogram which graphs the distance between the MACD and its signal line. If MACD is above the signal line, histogram will be above MACD baseline. If MACD is below its signal line, histogram will be below MACD baseline. Trader use the MACD’S histogram to identify when the bullish or bearish momentum is high.

2. EMA (Exponential Moving Average).

An Exponential Moving Average (EMA) is a type of moving average (MA) that weighs heavily on most data points. Exponential Moving Average is also called Exponential Moving Average. An exponentially weighted moving average responds significantly to recent price changes compared to a simple moving average (SMA), which applies uniform weight for all comments in that period.


In general, 50- and 200-day EMAs are used as long-term signs of trends. When a stock price crosses its 200-day moving average, then it is a technical indicator that has reversed.

3.RSI (Relative Strength Index).

Relative Strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold positions in the price of stock or other assets.

The traditional interpretation and use of RSI is that 70 or above versions indicate that a security is overbought or overvalued and a trend in value can be prime for reversal or corrective pullback. RSI reading of 30 or less indicates an oversold or undervalued condition.


Apart from this, more indicators are used in technical analysis but I mainly use these indictors for my technical analysis study. Because, they give accurate information about a stocks price trend.

The motive of this post is that technical analysis and its indicators studies provided by me is only for the purpose of education.
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Comments

  1. Anita Sharma28 January 2019 at 02:29

    It is a flow chart of stock market. here are define market flow. Apart from this,more indicators are used in technical analysis.very useful information keep sharing. Epic Research

    ReplyDelete
  2. Unknown28 January 2019 at 06:35

    But most of the time technical indicator provide false information, or may be its possible I'm not capable of understand this zig-zag indicator.

    ReplyDelete

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