1. Support and resistance: The process of technical analysis entails locating points of support and resistance. Support is a price at which it is anticipated that the price of an asset would increase, whereas resistance is a price at which there is often selling interest. Potential buying or selling opportunities are indicated by these levels.
2. Trendlines: With upward-sloping lines indicating an uptrend and downward-sloping lines indicating a downturn, trendlines are graphical tools used to identify price movements. They are essential for figuring out where to enter and leave, helping traders in visualizing patterns, along forming well-informed judgments based on price bounces and rebounds.
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3. Head and shoulders pattern: A higher head between two lower shoulders, a left shoulder at a high and a decline, and a second shoulder peak the technical analysis reversal pattern known as the head and shoulders. It signals a possible change in trend from bullish to bearish. The pattern, which is frequently used to predict a price decrease after an upswing, is confirmed by a break below the “neckline”.