Technical analysis uses historical price and volume data to identify patterns and predict future price movements.
Key Concepts
- Support: price level where buying typically emerges
- Resistance: price level where selling typically emerges
- Moving Average: average price over N days (50-day, 200-day common)
- Volume: confirms price moves (high volume = strong move)
Popular Indicators in Asian Markets
- Ichimoku Cloud: developed in Japan, extremely popular in Japanese trading
- RSI (Relative Strength Index): overbought/oversold signals
- MACD: trend and momentum
- Bollinger Bands: volatility measurement
Ichimoku — Japan's Gift to Trading
The Ichimoku Kinko Hyo was developed by Japanese journalist Goichi Hosoda in the 1930s. It provides support/resistance, trend direction, and momentum in a single chart overlay. It's the most used indicator in Japanese stock trading.