TECHNICAL ANALYSIS MARKET

Technical analysis, or better known as technical analysis is an analysis technique known in the financial world that is used to predict the trend of stock prices by studying past market data, primarily price and volume movements at first only consider the technical analysis of price movements or market respective instruments, with the assumption that prices reflect all relevant factors before an investor realized through a variety of other ways. Technical analysis can use different models and the basis for example, for the movement of prices used methods such as Relative Strength Index, Index moving average, regression, correlation between market and intra-market, cycle or with the classical way of analyzing chart patterns.

Technical analysis is widely known among the traders of shares (or known as "traders") and professionals in finance, but in the academic world regarded as pseudoscience or "voodoo finance;" it receives little or no direct support from academic sources and is Considered akin to "astrology.

Academics like Eugene Fama said that the proof of this technical analysis is very thin and inconsistent, which is "a shortage" of the technique is generally accepted that the efficient market hypothesis economist named Burton Malkiel argues that "Technical analysis is something that is haraam (anathema) in the academic world" and then he said that "in the form it is the efficient market hypothesis is weak then engka will not be able to predict future stock prices based on past prices."

In the foreign exchange market, technical analysis is used more and more practitioners than the use of fundamental analysis. Several internal studies indicate that technical trading rules can generate consistent returns in the period to 1987, most academic research focuses on the nature of the position of the currency market anomaly is speculated that this anomaly occurs as a result of central bank intervention.

General Explanation
Technical analyst (or analyst) sought to identify patrons and price trends in financial markets and seeks to exploit these patrons. In the use of various methods or techniques they give priority to the study of price charts. The analyst attempts to find a prototype of such patron patron reversal of the already very well known with the English term head and Shoulders (shaped like a patron's head and shoulders), and also learn a variety of patrons such as price, volume, and the average movement of prices. Some technical analysts also use psychological indicator of market sentiment investors.

Technical analysts also often use different indicators, which are typically mathematical transformations of the price or volume. This indicator is used as a tool for determining whether an asset is in a trend and direction of asset prices in these tern. The analysts also study the correlation between price, volume and margin in futures trading. Examples include the relative strength index, and MACD. Another study also used correlation between changes in option and an option to buy and sell along with the price.

Essentially, technical analysis to explore two areas of investment yautu analysis of market psychology and the analysis of supply and demand. Analysts trying to forecast price movements in order to gain success in commerce and minimize the risk of loss and to produce positive returns in the long run through proper risk management and financial management

Many ways of learning technical analysis. Adherents of how the learning of different techniques (eg, candlestick chart or more widely known by the term candlestick chart, the Dow Theory, and Elliott wave theory techniques often ignore other approaches, but many combine several elements of learning. The analysts usually decide to learning method which is appropriate based on experience of what is reflected from an instrument at a particular time and what the meaning of the patrons that formed in this period.

Technical analysis is frequently contrasted with fundamental analysis, the study of economic factors that some analysts believed could influence prices in financial markets. Technical analysis holds that prices already reflect all the economic influence before investors are aware. Some traders use technical or fundamental analysis exclusively, while others use both in conducting the analysis.

History
The oldest examples of technical analysis is developed by Homma Munehisa in the early 18th century using the technique of candlestick chart (candlestick chart), which is the main analytical tool at this time

Dow Theory is based on the collected writings of which was written by Charles Dow who was the founder and editor of Dow Jones, which became a source of inspiration from the development of modern technical analysis in the early 19th century. There were also Ralph Nelson Elliott and William Delbert Gann who developed their technique also in the early 20th century. There are many other technical tools and theories that have been developed in recent decades, along with the growing use of computers as a tool.

Criticism
Critics of technical analysis benyak posed by well-known fundamental analysts such as Peter Lynch, who commented that "Graphics are very good for predicting the past". Warren Buffett said that "I realized that technical analysis is useless when I turn the graph so that the under and I did not find anything different answers and, if past history is reflected on it all that will be the richest people are the librarians

Most academic studies stated that technical analysis has little predictive power, but some studies have stated that technical analysis can only generate a profit. Cheol-Ho Park and Scott H. Irwin studied the modern study of profitability in 1995 and claimed that 56 of them found positive, 20 produced negative results and 19 indicated yield mixed results.

An influential study conducted by Brock et al. in 1992 that showed support for technical trading techniques in a way that has been tested for the surveillance data and other problems in the year 1999

After that, a comparative study conducted by an economist named Gerwin Griffioen Amsterdam concluded that: for the American market, Japan and several Western European markets indicate that the forecast does not show favorable results after implementing little transaction costs.

Tepatguna market hypothesis
Tepatguna market hypothesis or the foreign term is known as the efficient market hypothesis (EMH) is a contradiction to the doctrine of "technical analysis" of the principle that past prices can not be used to predict future prices. or in other words to say that technical analysis is not effective. Eugene Fama economist, published an article that was published in the Journal of Finance in 1970, saying that "In a short period, the evidence supporting the model tepatguna market will expand and become something unique in the world economy and reverse the evidence opposed to diminishing returns. Proponents of the EMH states that "if a price can quickly describe all relevant information, then there is no method (including technical analysis) could be against the market.

Experts say that EMH ignores how markets work in which many investors rely on profits or performance expectations in the past. Because the future price of a stock can be influenced strongly by the expectation / expectations of investors, experts hope the states that follow past prices can influence prices in the future.

Hypothesis irregular step
Hypothesis irregular steps or in the foreign terms better known as the Random Walk Hypothesis, which is another form of tepatguna market hypothesis, which is based on the assumption that market participants fully use all the information on price movements in the past (but no need to use other public information).

Technical experts state that the EMH theory and the theory of irregular steps, both override the realities that occur in markets where market participants act irrationally when they could have become greedy, excessive fear of risk, and others. and price movements that occur when the current is dependent on previous price movements

Technical analysis indicators
Some technical tools that are widely known to use include:
Average true range - the daily trading price range

Coppock - Edwin Coppock Indicator Coppock developed for one purpose is to recognize the beginning of a trend increase in the market (bull market)

Dead cat bounce - This describes the recovery from temporary pricing or market share amid a prolonged decline or bear market. That is, rebound experienced by the market or a stock after the price crash, really only temporary because the stock market or will continue to fall.

OH Elliott Wave and the golden ratio (golden ratio) to calculate price movements

Hikkake patron - the patron to identify the reversal and continuation of movement

Momentum - the value of price changes

Graph points and figures - based on price charts to the exclusion of time

Rank CPV - patron to identify reversals by using the volume and price indicators as the indicator.


Indicators are used in a way combine with price charts:

Resistant - an area where there was an increase in sales

Support - rea where an increase in purchases

Breakout - when prices pass through and hold above the support or resistance area

Trend line - the curve of support or resistance line

Canal - a pair of parallel trend line

The average movement - from a price

Bollinger bands - a range of price volatility

Pivot point - a calculation using the average value of the lowest, the highest closing price



Indicator price which is usually placed under price charts
Akumulasi/distribusi- index based on the closing price of a particular time range

Commodity Channel Index - is the indicator used to measure the average price of the statistics. High scores indicate that the price is abnormally higher than the average price

MACD - konverjensi / diverjensi moving average

Parabolic SAR

Relative Strength Index - oscillator showing price strength

Rahul Mohindar Oscillator - an indicator for identifying trends

Stochastic oscillator

Trix - oscillator showing the curves of the three moving average which was developed by Jack Hutson at 1980s



Volume-based indicators:
Money flows - the number of shares traded when the price moves up

On-balance volume - the momentum to buy or sell shares

Graph PAC - two-dimensional method to graph the volume based on the ratings