System of Analysis

Concepts and statistic tools for technical analysis
The technical stock exchange analysis is composed of multiple statistic formulas applied to a series of time of the price of the stocks and the respective amounts that have been moved and every day new techniques of analysis are being incorporated. Given that we are not trying to wear out this theme or make a summary of the different ways of analyzing the market in a statistic way, which would only bore people, we will only describe the main tools that the proposed analysis system uses, which, combined, will allow us to obtain a global vision of the tendency of each action of the stock market. For the analysis of the statistic tools we are not going to place a lot of emphasis on the mathematical formulas, since these can be found elsewhere. What we will do is cover the practical application of the main indicators and the comments about its behavior. Considering the common main interest, who will mainly opt for the manual load of closing market data obtained from the papers, for example, we have chosen the most representative indicators and that only require the closing price and amount of the combined stocks. This will save time and effort in maintaining the necessary data base to operate the system. The users that access to the automatic load of data from some service of information via email will obtain daily, for every stock, the highest price, the lowest price, and the closing price and combined amounts. With this information all the conditions of applying all the indicators that the MetaStock program offers, but this does not mean that it will necessarily improve their analysis system. The simplest concepts that are related to the objective observation of the evolution of the series of time and that use the least amount of data are the best. The reality of the market can be found in simplicity, and this is what finally will allow us to flow with its tendencies, without putting up a resistance. If the market starts to move upwards, we will take a position, if the market stopped its increase and starts to go downwards, we will liquidate that position. It should never be forgotten that the market will do what it wants to do, without caring about the expectations the investors and speculators have. Therefore, the only secret of technical analysis will reside in learning to flow in the direction of the market. Obviously the field of the statistic technical analysis field is so wide that each person almost has the obligation of developing their own methods and taking their own route. Be careful to not fall in the trap of statistically overanalyzing the market. There are so many indicators that are available to be applied that, in the end, instead of orienting those that are just starting, they can deviate it towards complete confusion and contradiction of one method and the other.

Price series of graphs
The technical analysis base is a graph that allows a person to see the evolution of the price and the amount of the combined stocks in time. The price and the amounts are indicators of the vertical axis and the dates of transaction of the horizontal axis. No wonder a graphic is able to tell us more than a thousand words. There are other types of graphics used in technical analysis such as the Candlestick that are Japanese, Point and Figure and so forth and these can be found in technical analysis books for those interested.