Various technical terms and their meanings
Posted by tushar chatterjee on Sunday, May 22, 2011
Under: Technical analysis
The technical analysis consists of the following three factors. These are most important here.
Bottom—it is the point where the price stops going down any further and starts going up, here demand >> supply so no more downfall occurs. it supports the price to move upward, hence we can consider it as a SUPPORT POINT
Trend--- trend is the direction of price movement. It can be as short as intraday and as long as consisting many years. So its safe to assume that trend is totally dependent on the time frame we select
Trend reversal—trend reversal is the phenomenon which occur when the price hits any potential support or resistance zone, if an up trend meets a potential resistance zone then it may reverse its direction and start going down resulting an down trend and if a down trend hits a potential support then it may stop going down and start heading north, resulting an uptrend
Support – it is the zone, which has the power to resist any down move up to a certain degree, and if broken down then will act as a resistance to any further upmove
Resistance—it is the zone which can resist any up move and if broken will act as the support to further upmove
Supports and resistance are. thus interchangeable. Plz always keep in ur mind that various types of support and resistance zones command the market and thus command us as traders
- Price .2. Time and 3. Volume
- Price—while in the market, a buyer creates the demand and the seller creates the supply force, we can say price the the point of negotiation which lets them exchange their needs
- Time – time is the time scale of exchange, under which the exchange is taking place
- Volume—under a given time. Then number of securities which changes hands from seller to buyer is the corresponding volume of that time scale
Various types of price
The following types of prices are of greater importance- Opening price- the first price of exchange,
- High price – the highest point of exchange under a given time. This shows the highest power of bulls during that time
- Low price—the lowest point of exchange under a given time . this shows the highest power of the bear
- Closing price—the final price of exchange under any given time, being the final point, this is the most important factor
Top—top is the point of transaction under any give time frame when the security stops heading upward and start going downward. At this point supply>> demand, so the price does not moves up any more and starts going down. It resist the upward move, hence we can call it a RESISTANCE POINT
Bottom—it is the point where the price stops going down any further and starts going up, here demand >> supply so no more downfall occurs. it supports the price to move upward, hence we can consider it as a SUPPORT POINT
Trend--- trend is the direction of price movement. It can be as short as intraday and as long as consisting many years. So its safe to assume that trend is totally dependent on the time frame we select
Trend reversal—trend reversal is the phenomenon which occur when the price hits any potential support or resistance zone, if an up trend meets a potential resistance zone then it may reverse its direction and start going down resulting an down trend and if a down trend hits a potential support then it may stop going down and start heading north, resulting an uptrend
Support – it is the zone, which has the power to resist any down move up to a certain degree, and if broken down then will act as a resistance to any further upmove
Resistance—it is the zone which can resist any up move and if broken will act as the support to further upmove
Supports and resistance are. thus interchangeable. Plz always keep in ur mind that various types of support and resistance zones command the market and thus command us as traders
In : Technical analysis