What Is The Basics Of Technical Analysis?

Gain a solid understanding of technical analysis and chart patterns in trading. Learn to analyse price charts and identify trends in this beginners' guide.

• Question 01

  What do candlesticks represent in technical analysis?

  Your Answer

  • A.Historical price data

  • B.Economic indicators

  • C.Chart patterns

  • D.Future price movements

• Question 01

  Which part of a candlestick represents the price range between the day’s open and close?

  Your Answer

  • A.Upper shadow

  • B.Lower shadow

  • C.Real body

  • D.Wick

• Question 01

  Which candlestick pattern suggests potential trend reversals due to market indecision?

  Your Answer

  • A.Doji

  • B.Hammer

  • C.Engulfing

  • D.Evening Star

• Question 01

  When does a bullish engulfing candlestick pattern form?

  Your Answer

  • A.When a green candle fully engulfs the previous red candle

  • B.When a red candle fully engulfs the previous green candle

  • C.When two green candles form consecutively

  • D.When two red candles form consecutively

• Question 01

  How are trendlines drawn in technical analysis?

  Your Answer

  • A.By connecting swing highs in an uptrend or swing lows in a downtrend

  • B.By connecting opening and closing prices

  • C.By connecting support and resistance levels

  • D.By connecting consecutive candlestick patterns

• Question 01

  What role do lagging indicators play in technical analysis?

  Your Answer

  • A.They provide signals before a trend has been established

  • B.They help confirm trends after they have been established

  • C.They predict future price movements with high accuracy

  • D.They measure market sentiment in real-time

• Question 01

  How are Moving Average Convergence Divergence (MACD) signals generated?

  Your Answer

  • A.By the intersection of the MACD line and the signal line

  • B.By the width of the MACD histogram

  • C.By the number of bullish candlesticks

  • D.By the slope of the MACD line

• Question 01

  When is a bearish divergence typically observed?

  Your Answer

  • A.When the price makes higher highs and the indicator makes higher highs

  • B.When the price makes higher highs and the indicator makes lower highs

  • C.When the price makes lower lows and the indicator makes lower lows

  • D.When the price makes lower lows and the indicator makes higher lows

• Question 01

  What is the function of the %K and %D lines in the Stochastic Oscillator?

  Your Answer

  • A.%K measures market momentum, while %D is a signal line

  • B.%D measures market momentum, while %K is a signal line

  • C.Both %K and %D measure market momentum

  • D.Neither %K nor %D are used in the Stochastic Oscillator

• Question 01

  How do traders typically interpret the Bollinger Bands when they squeeze together?

  Your Answer

  • A.As a sign of high volatility

  • B.As an indication of a pending breakout in the market

  • C.As a signal to exit trades

  • D.As an indication of a trend reversal