April 3, 2021
How to Trade with Technical Analysis
Besides fundamental analysis, which utilizes the past financial performance of a company, there is one other form of analysis an investor or trader can use. This involves monitoring certain stocks or currencies on a minute-to-minute basis to predict movements ahead of time. This is known as technical analysis (TA).
Technical analysis can also be used alongside fundamentals to align more accurate price targets, strategies, and patterns. Working with technical analysis is tricky, but not impossible. In fact, using RoboMarkets platforms can level the playing field for beginning traders.
Working with Technical Analysis
Using our platforms R StocksTrader, MetaTrader 4, and MetaTrader 5, traders can add and remove financial indicators as they please to optimize the charts to best suit their investment strategy. The interface is completely customizable to suit any traders’ needs.
Indicators are essential to help traders identify opportunities in the market. Here are some great starters:
- Trend (50 & 200-Day EMA)
- Momentum (MACD)
- Volume (On-Balance-Volume)
- Relative Strength (Stochastics)
For instance, traders may want to purchase a stock that is fundamentally undervalued but may be trading above its 50-day exponential moving average. This may indicate that the stock is overbought from a technical analysis perspective. This can help traders make more informed decisions, potentially giving them better prices on the stocks, currencies, and more.
Momentum, volume, and relative strength all play a vital role when determining whether or not to make a trade. No momentum may indicate small price action, a low volume may make it difficult to liquidate holdings, and relative strength can determine if the asset is overbought or oversold.
All of these indicators can be easily applied on RoboMarkets platforms. With these indicators, users can build programs to trade within the chosen parameters. Automated trading can also be achieved very similarly through our terminals. This can be done with zero prior programming experience, making it compatible with inexperienced traders.