Basic Principles of Technical Analysis for Offshore Trading - PowerPoint PPT Presentation

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Basic Principles of Technical Analysis for Offshore Trading

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There are two primary methods used when analyzing securities and making investment decisions in international share trading first one fundamental analysis and second technical analysis. Fundamental analysis involves reviewing a company’s financial statements and reports. Whereas technical analysis instead focuses on the statistical analysis of the price movements. – PowerPoint PPT presentation

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Title: Basic Principles of Technical Analysis for Offshore Trading


1
Basic Principles of Technical Analysis
There are two primary methods used when
analyzing securities and making investment
decisions fundamental analysis and technical
analysis.
2
TECHNICAL ANALYSIS
Technical analysis is the method in which a
securities historical price behavior is the
primary determinant in making a trading or
investment decision. It is a trading tool used
to evaluate securities and attempts to forecast
their future movements by analyzing statistics
gathered from trading activity, such as volume
and price movement.
3
BREAKING IT DOWN
A m o v i n g a v e r a g e ( M A ) i s c a l c u
l a t e d i n d i f f e r e n t w a y s d e p e n
d i n g o n i t s t y p e
T h e m a i n p u r p o s e i n u s i n g m o v i
n g a v e r a g e s i s t o i d e n t i f y t r e
n d d i r e c t i o n o f a g i v e n s e c u r
i t y . U s i n g a s m a l l e r n , o r t i
m e p e r i o d r e v e a l s t h e t r e n d i
n t h e f a s t t i m e f r a m e a n d t h e t
r e n d l i n e w i l l q u i c k l y r e s p o n
d t o c h a n g e s i n p r i c e a c t i o n .
4
W H A T I S A M O V I N G
A V E R A G E ( M A ) ?
The two basic and commonly used moving averages
are the simple moving average (SMA), which is the
average of a security over a defined number of
time periods, and the exponential moving average
(EMA), which gives greater weight to more recent
prices.
5
  • How to use moving averages

One of the most common methods of using moving
averages to identify offshore share trading
opportunities is to look for crossovers
between short and long- term moving averages.
These are commonly referred to as the Golden
Cross and Death Cross.
6
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