Types of technical analysis

There are two main types of technical analysis

1) Pure study of the price

The probable prediction of price movement can be made by applying special lines (trend lines) on the charts, analysis of previous highs/lows and by trying to look at chart or pattern formations.

Below is an example of a chart showing trend lines with support and resistance.


2) Study of the price using indicators and oscillators

There are various types of indictors and oscillators available for trading however the most famous ones are moving averages, RSI, Stochastic and MACD.

Below is an example of a chart with two famous indicators being the MACD (below the chart) and Bollinger Bands, which is applied directly on the prices.


It is of course possible to utilise both type of technical analysis, which are purely graphical and mathematical, in order to have a clearer picture and idea of where the price is going.