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Technical analysis forms the backbone of day trading online at CAPEX. Through the use of charts, indicators, and signals, traders can predict the right price movements with keen precision. Technical analysis is a skill that must be learned.
But what exactly is technical analysis and how can traders use this trading tool at CAPEX? We’ve got the full downlow on everything charts, strategy, tools, and signals at CAPEX.
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You read that right! There are more than 2,100 CFD instruments available to trade at CAPEX across a wide range of markets.
You’ll have access to more than 55 currency pairs that extend to major, minor and exotic pairs. All tradable with 1:30 leverage too. Crypto traders can rejoice with over 20 unique digital assets including bitcoin, Ethereum, Cardano, and Ripple.
The commodity market offerings at CAPEX are something truly special and includes not just major markets like silver and gold, but also extends to coffee, corn, and cocoa. CAPEX offers 2,100 shares across multiple stock exchanges and can all be traded with leverage.
CAPEX offers traders the opportunity to learn the fundamentals of technical analysis for trading at the CAPEX academy. Technical analysis is a trading discipline that helps evaluate investments and identify opportunities to trade based on price and pattern trends determined through using charts. Essentially, traders will be entirely focused on studying the price and volume of a particular instrument. Thankfully, CAPEX offers plenty of tools to deeply analyse every tradable instrument.
Typically, traders using technical analysis identify short-term trading signals that help evaluate the strength or weakness of an instrument relative to the market. Traders can easily gain an improved estimation of their valuation of an instrument. Technical analysis is applicable to any financial instrument that has historical trading data, such as the CFD stocks, commodities, forex and cryptocurrencies at CAPEX.
However, since technical analysis is generally a short-term analytical tool, this technique is heavily utilised by forex, commodity, and cryptocurrency CAPEX traders. There are tons of charts that CAPEX traders can use to forecast future price movement based on indicators derived from historical price data.
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Most typically, technical analysts using CAPEX trading platforms will be looking for the following type of indicators:
There are, however, hundreds of different patterns and trading signals that traders at CAPEX can use to support their technical analysis research. You’ll even find common trading systems that aim to help forecast price movements. Most retail investors will be focusing on market trends. This can include support and resistance trading using candlesticks or it might simply be an analysis of a trend’s strength. At CAPEX, there are so many charts and indicators available to conduct technical analysis for trading, alongside trading courses to learn how to use them effectively.
When it comes to performing technical analysis at CAPEX, there are two schools of thought: the top-down approach and the bottom-up. If you haven’t already checked out the CAPEX academy, you’ll hear about these approaches quite often.
Traders looking for short-term gains tend to use a top-down approach. This approach involves a macroeconomic analysis of the overall economy, before moving on to individual markets and securities. For example, a trader looking to invest in short term-gains on the stock market would be interested in a 50- day moving average chart – available in all CAPEX trading platforms – to see any breakout stocks that could signal a buying opportunity.
Now the bottom-up approach is purely focused on an individual asset. If we were talking about the stock market, a trader would analyse a single stock that showed fundamental opportunities to buy and sell. For example, stock traders would love for undervalued stocks that are currently in a downtrend and then use the technical analysis tools available at CAPEX to determine when the price will bottom out.
CAPEX demo account it’s risk-free and replicates the CAPEX WebTrader platform perfectly. As a result, traders can practice their trading strategies without risking any of their real money. The CAPEX demo account is free to use and instantly available upon signing up. The markets are represented in real-time and match the real live markets, so you can trade with virtual money and use the same trading charts and indicators to curate your trades.
Don’t worry. We’re not just going to throw all this information at you and not teach you how to use it. Performing technical analysis at CAPEX is fairly intuitive and you’ll have plenty of tools and educational resources to help you along the way. Here are the 4 steps to get you started.
While you may want to trade a particular instrument or asset, you’ll need to identify whether it is worth trading in the first place. You can’t trade bitcoin or Apple stocks just because you like them – they need to be a viable option for making a profit. This means you’ll need to pick a trading strategy and stick with it. CAPEX offers plenty of tools to allow traders to complete any number of different trading strategies that suit their needs.
This doesn’t mean you have to simply choose a single candlestick pattern and look for it for 8 hours a day – learn about a few patterns that signal bullish reversals and look to trade assets that are moving up.
Pick a strategy that suits your needs. A day trader will probably prefer basic trendlines and indicators of volume, while position traders will most likely prefer more complex chart patterns and various indicators.
Employ your strategy on a few choice instruments. If you have chosen a short strategy – say, a 15 or 50-day moving average – you’ll be looking at highly liquid and volatile markets such as cryptocurrencies or certain stocks. Deploy your charts provided by CAPEX and attempt to uncover a pattern that indicates price movement in the fashion that you would like. When your technical analysis produces a signal, feel free to open a position in accordance with your strategy and imposed limitations. Don’t forget you can use stop-loss and profit target orders to control your losses and profit potential.
Once you have opened a position, you can’t just sit back and relax – unless of course you have opened a trade that you don’t expect to see results for a very long period of time. Day traders will want to closely track and monitor their trades. You can learn from this by watching how the market moves – does it match the sentiment identified by the chart you used? Will the trend continue? CAPEX provides plenty of tools for maintaining a watchful eye over your trades and there are different tools for different types of trades.
CAPEX offers a wide range of trading tools that traders can use to track and monitor their trades. You can even use specialised tools for performing technical analysis or have the analysis performed for you. CAPEX offers daily analyst ratings that offer trading recommendations and education on new trading strategies. Gain insights into market sentiments before you perform your technical analysis with CAPEX news sentiment – that way, you’ll know where to look that day.
There are two major schools of forecasting price movement of financial markets through research and analysis: technical and fundamental. These methods are often mixed up but they are far from the same. Fundamental analysis differs from technical in that rather than analysing price and volume, fundamental analysts use data that measures the intrinsic value of an instrument. This is widely considered to be more of an investment strategy and is usually reserved for long-term investments.
Technical analysis for trading, of course, is more of a short-term strategy and deals primarily with trading. What the asset is or its purpose is often irrelevant since technical analysis allows traders to trade instruments without actually needing any knowledge of the instrument itself. You’re just following the chart data exclusively.
Nothing in the trading world is guaranteed. Any strategy or technique to trading will have a mixture of benefits and disadvantages, but trading is about learning to leverage those advantages effectively. Technical analysis is far from perfect, but it is one of the most effective ways to trade at CAPEX. It’s a good idea to learn the pros and cons of trading using technical analysis.
One of the biggest advantages of technical analysis for trading is that people are predictable. That means you don’t need extensive financial experience to understand technical analysis charts as it is generally followed when large amounts of traders will buy or sell an asset. Advantageously, new traders won’t need to understand the financial health of an instrument, rather they need to predict behaviour – a much easier feat.
Technical analysis is also a much better way to identify when to buy or sell too. This technique can really improve your timing and is significantly better than fundamental analysis at identifying timing. The big advantage here is being able to identify the price movement before it happens, thus providing CAPEX traders with the perfect window of opportunity.
There are some arguable limitations of technical analysis. Firstly, there is nothing to say that history will repeat itself. While history has proven to be a good indicator of future price movements – otherwise the strategy would not exist – it is far from a foregone conclusion. Price movements can be affected by many things and the historical data may mean nothing in some cases.
Some experts have argued that technical analysis only works because it constitutes some form of self-fulfilling prophecy. What we mean by that is if historically a large number of traders have a stop-loss order at a certain point, that action will simply repeat itself thereby fulfilling the anticipated drop in valuation. Traders will simply see this looped price drop and most likely sell their positions – the cycle never ends. Essentially, if enough traders follow the same signal, they will create the price movement that the signal is indicating.
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Trading strategies can be difficult to get the hang of and a lot can happen very quickly. You may even already understand a few charts but lack the confidence to execute the trade. This is where the CAPEX demo account is perfect. It’s free to all CAPEX users and allows traders to follow the live markets but execute virtual trades with zero risk. You can practice trading with technical analysis and have no fear of making any dangerous mistakes. You can take what you have learned in our technical analysis for dummies guide and implement it in real-time!
As the most important aspect of day trading, technical analysis is a tool and strategy for identifying price movement for any of the tradable assets on offer at CAPEX. Technical analysis at CAPEX involves using the WebTrader and MetaTrader 5 platforms in-built trading tools. With technical analysis, traders at CAPEX can identify reversals, see price movements, and predict when to enter and exit a trade. The CAPEX free demo account it’s the best tool for practicing technical analysis and it’s one of many reasons to sign up to CAPEX today.