Technical charts analysis: types and explanation in detail

Introduction :

Today we will learn what is the technical analysis, and we will pay more focus charts because 60 % of technical analysis are chart patterns analysis. Technical analysis is very easy, but it is not so. This is a very big topic that no human can understand because it depends on the human's utterance and no one can fully understand the human's utterance. So let us now come to the topic of importance.


- 19 types of investment?

- trading vs investing detailed explanation with example


books recommendation


-Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance)


- How to Make Money Trading with Candlestick Charts

What is technical analysis?

Technical analysis has to be understood in easy language, then it can be called a machine to understand the movement of a human being. This is not done only in the share market, it can be used in every field which is perpendicular to the human being. In technical analysis, the graph of human movement is made and it is also practiced. Some such charts/graphs have been created in the share market, which is made again and again that means the human being is like that. So next we are going to practice this.


(There are also 3 types of chart patterns, but after looking at the beginner's point of view, we have exhausted some chart patterns.)


Technical chart patterns

(1) Ascending Triangle:

In this, the stock price is going in the uptrend and a trend line is created (trend line: the line found after adding support and resistance) This trend line is drawn up and down and when the stock price is above the trend line If we break, then we have to enter it. And the difference between the trend line is to put the stop below and from where both the trend line starts, we have to target the difference, but in this, we will have to target Should also participate.


(2) Descending Triangle:

Like we saw that when the price of a stock in the ascending trend breaks above the trend line, similarly the trend line below gets entry when the stock price breaks and then the short-selling has to be done and the trend is taken The gap should be kept high and the target should also be the difference between the two trend lines.


(3) Channel Breakout


In this chart pattern, the price of the stock continuously makes a channel and when this channel breaks up or down, the entry is targeted and the difference of that channel is to be targeted and the stop loss is recorded.



(4) Head and Shoulder:

In this chart pattern, the chart is shaped like two shoulder holders on the side and one head in the middle. And in this, we get the entry when the second shoulder breaks the support line of the previous shoulder and head and the stop loss in it is fine. Support is mounted above the line. And the turret has a difference from the peak point of the head to the support line. Similarly, inverse head and shoulder also work.


(5) Triple Top:


In this chart pattern, the price of the stock becomes three shoulders. In it, the head is not formed hence the resistance and support line is formed. In this, when the price of the stock breaks the channel, the entry is received and the stop loss is applied above or below the trend line according to the trade.


(6) cups and handles


In this chart pattern, the shape of the chart is like two shoulders on the side and one head in the middle. And in this, we get the entry when the second shoulder breaks the support line of the first shoulder and head, and stop Support is mounted above the line. And the target has to interpolate from the peak point of the head to the support line. Similarly, inverse head and shoulder also work.


The new chart pattern that we have told you, the new people seem to be in it, this chart pattern is the same as the ditto rail time pattern, but it is a big assumption that no chart is a perfect match, something different comes in it. And you will come after this practice.