Over time, the repetitive movements of graphics and their presence in behaviors similar to their historical behavior when the underlying conditions are formed indicate the presence of many keys to analysts. It is the most important element determining the future of the position to be successful in reading the graphs and solving the language it contains. This is why graphs plotted and analyzed at various time intervals are very important to a good investor if they get important clues.
A variety of graphical behaviors that are of great importance for technical analysis are shared with our users for a successful investment in our entire education system. In this area of our site we will also try to introduce some of the most important things about graphics.
What is Trend?
The rise, decline and steady trends in prices over time make up the overall trend concept. In economic development, the conjuncture of the concerned instrument reveals the trends of price increase, decline or indecision. Therefore, depending on the tendency of the instrument, the influences of economic developments and investor behaviors may be in different directions and sizes. Here, we give the name “trend” in the direction of the general trend of the instrument.
The trend is called “horizontal” trend if the trends tend to rise in the general level, “down” in the downward trend, and finally in a certain range.
The concept of trend can not consist of transient behavior patterns that can be measured in short intervals. Depending on the general directional characteristic that the instrument will show in the time slot over which the trend name can be interpreted as meaningful. Therefore, price fluctuations within a few days do not produce strong enough data to influence the overall trend direction. The trend is the long-term trend of the relevant instrument’s economy relative to the overall process dynamics. For this reason, understanding the general tendency trend may require a point of view extending to the table.
Knowing trend trends in instruments to be invested can be a key to successful positions. For a parity with a rising trend, the probability of success of the purchase will of course exceed the probability of success of the sale. This is because in the case of a successful position management it can always be friendly with the trend trend.
Support and Resistance Concepts
The progress of an instrument on the graph has significant price levels that pause, stop, and often reverse it. The price levels will definitely take into account if the human nature of the price moves the graph to a certain degree of investment decisions. The movement that has encountered considerable obstacles during the progression of the historical time zone and does not exceed a certain price level takes this point into the history of historical development and tends to have similar movements at the same price level. When the instrument is raised during the elevation, the resistance of the important stopping points in the horizontal plane is called resistance, while the obstacle to be encountered during the descent is called support.
Characteristic trends of support and resistance levels for the upcoming price lead to interesting position possibilities for the investor. This is because the price movements at these levels can give the opportunity to earn money with simple positions, which is the generalized behavioral mechanics.
When prices come to a defined level as support or resistance, there are usually two basic behaviors. The price reached here; It will either gradually return to the relevant level. Or he will seek a new obstacle for himself by breaking this level which is an obstacle to his own development and going on. Each broken resistor will support, and each broken resistor will assume the new role of resistance as a resistance. You can also see dramatic examples of this in the sample graphic.
If the price level’s trend of short-term progress can be shaped relative to a certain line, it may be possible to mention the trend line. It can be said that if the peak points formed by the falling price or the bottom points formed by the rising price can be united on a straight line, the price progresses within a certain trend line. The descending trend lines are above the price movement, and the rising trend lines should be below the price movement.
The instrument’s movement in line with the trend line in the short course, of course, is a good starting point for lucrative positions. Because the price approaching the trend line during the normal course of action is forced to move in the opposite direction. The behavior here is similar to the concept of support and resistance. Thus, an investor who knows this relationship will reduce risk by taking the appropriate position at price levels approaching the trend line.
Trend lines should not be confused with the trend concept. The trend refers to the long-term trend of the price level in accordance with the general conjuncture, and it is not always necessary to merge a relative line with a peak or a bottom point. The general direction trend is enough to explain the direction of the trend. The trend lines should be able to create a meaningful truth when combined from the top or bottom depending on the direction of the price.
A price continuing to move on a trend line may accommodate shorter and smaller trend lines in the lower segments. Therefore, the price moving in line with the current trend line is able to act on the other dynamic trend in a short period of reverse movement. As can be understood from this, it is possible to draw and benefit from the same directional or negative trend lines that are intertwined with each other.
It is possible to talk about the price channel if one can draw a line parallel to any trendline, connecting the other side of the price graph to a relative dip or peak. Therefore, in the price theoretical theory, the price fluctuates between the upper and lower two sides. Depending on the name’s slope of the channel, it receives a “declining price channel” or “rising price channel”.
The fact that the instrument reaching the limits of the price channel is sensitive to motion in the opposite direction is used as an important factor that reduces the risk of investment. Therefore, investors who know the effort to stay in the channel will increase their positions on the channel limits, causing the price to act aggressively at the relevant limits. For this reason, it is inevitable that the price moves faster on channel boundaries and produces faster results.
Taking purchase at the lower end of a rising price channel ensures that we get less risky positions than going to the top of the sales process. Because if the general tendency of the channel supports the increase, there is a higher price interval between the purchase point where we enter the position and the upper limit we plan to cover. Therefore, the position gain level can be expected to be higher.
In the down price channel, the features connected to the rising price channel are still valid, but it is more likely that the sale process will give successful results.