Determine the prevailing trend based on price movements

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Reference no: EM133527741

Assignment: Trading

Technical Analysis in Practice

Congratulations on reaching the point where you can apply your technical analysis skills! In this assignment, you will engage in a hands-on case study where you'll analyze the price movements of a specific financial instrument of your choice using the technical analysis concepts you've learned. By conducting a thorough analysis, you'll make informed trading decisions based on real-life data.

Instructions:

Prepare a comprehensive report and video summarizing your technical analysis of the selected financial instrument. Include:

A. Introduction to the chosen financial instrument and its market.

B. Presentation of the price chart with annotations highlighting trends, support/resistance levels, and the indicators you chose.

C. Explanation of the trend, potential entry and exit points, and rationale for your trading strategy.

I. Step I: Selecting the financial instrument

Choose a financial instrument of your choice, such as a stock, forex pair, cryptocurrency, or commodity. Ensure that there is a reasonable amount of historical price data available.

II. Step II: Collecting price data

A. Gather historical price data of the chosen financial instrument. You can use tradingview.com to obtain the necessary information.

B. Decide on the suitable time frames for your analysis.

III. Step III: Technical analysis

A. Open the price chart of the selected financial instrument using the collected historical data. Use candlestick chart to visualise the price movements.

B. Determine the prevailing trend (uptrend, downtrend, or sideways) based on price movements. Use trendlines and moving averages to support your analysis.

C. Identify significant support and resistance levels on the chart. Explain how these levels are determined and their relevance to potential trading decisions.

D. Choose two technical indicators of your choice (e.g., RSI, MACD, stochastic oscillator, etc.). Apply these indicators to the price chart to assess their readings and implications.

IV. Step IV: Strategy Development and recommendation

A. Based on the technical analysis make a choice to long(Buy) or short(Sell). Explain the entry and the rationale behind your strategy.

B. Discuss how you would manage risks associated with the trade.

Reference no: EM133527741

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