Mastering technical analysis on Pocket Option Broker is a significant step towards successful trading. This renowned platform provides an array of tools and features that can help traders understand market trends and make informed decisions.
Technical analysis involves studying past market data, primarily price and volume, to forecast future price movements. It’s based on the assumption that history tends to repeat itself, and the same patterns formed in the past will reoccur in the future. In this sense, technical analysis can be seen as a method of finding patterns within chaotic markets.
Pocket Option Broker offers various charts for technical analysis such as line chart, candlestick chart, and bar chart. Each type provides unique insights into market behavior which helps traders predict potential price movements. The line chart shows closing prices over a specific period while the bar chart displays both opening and closing prices along with highs and lows during a particular time frame.
The candlestick chart is perhaps the most popular among traders due to its detailed representation of price movement within specific periods. It shows not only opening and closing prices but also whether closing was higher or lower than opening – represented by different colors (usually green for bullish periods when closing was higher than opening, red for bearish ones).
In addition to these basic tools, Pocket Option Broker also offers advanced indicators like Moving Averages (MA), Relative Strength Index (RSI), Bollinger Bands (BB), Stochastic Oscillator among others which further enhance one’s ability to analyze markets technically.
Moving averages smooth out price fluctuations over specified periods providing trend direction at a glance – whether it’s uptrend or downtrend. RSI measures speed & change of price movements indicating overbought or oversold conditions; values above 70 suggest potential sell-off while those below 30 hint at possible buying opportunity.
Bollinger Bands consist of three lines – middle MA line with two outer lines representing standard deviations away from MA; when price touches upper band it might be overbought, when it touches lower band – oversold. Stochastic Oscillator compares closing price to price range over a certain period; values above 80 suggest overbought market, below 20 – oversold.
Mastering these tools and indicators on Pocket Option Broker requires practice & patience. However, their proper application can significantly improve trading performance by providing better understanding of market trends and potential reversals. This platform also offers demo accounts where beginners can hone their skills before venturing into real trading.
In conclusion, technical analysis is an essential skill for any trader aiming for consistent profits in the financial markets. With its extensive toolset and user-friendly interface, Pocket Option Broker serves as an excellent platform for mastering this art.