What are the advantages of technical analysis?
The understanding part of Technical Analysis. is simple and the practical applicability can be done quicker. The feeling of the market is taken into account which is subjective in nature.
Let’s look into the advantages that contribute towards Trading strategies.
Market news reflects the commodity price
It is the inevitable truth that the fundamental news plays a huge role in supply and demand, influencing the commodity price. It has a huge impact on investment decisions as it keeps the investors informed on the happenings. The crowd market psychology is identified using these patterns. It gives a wide view on price forecasting.
The movement or direction of the commodity market trend is identified and monitored using the Market Analysis. When we learnt about Market Trends, the three kinds of trends discussed were Uptrend , a downtrend or a sideway trend. These trend directions are useful for making decisions when we invest and trade in commodity markets.
Entry and exit recommendations
This strategy is helpful for short & long-term trading. The long-term entry and exit point is supported by Fundamental analysis. It can be noticed that, when the fundamental news is released in the market, the commodity price has already changed. In order to take a decision in the entry and exit point, some traders use a blending of trend indicators, structures, volume and also moving averages.
The above chart indicates the “Entry and Exit” for the commodity product crude oil. As you can see in the graph, the commodity breaks above resistance. The Target level is calculated using “Trend line resistance”.