Technical Analysis Flashcards
(24 cards)
What is technical analysis?
Technical analysis is the study of past market data, primarily price and volume, to forecast future price movements.
True or False: Technical analysis relies on fundamental data.
False
What is a trend in technical analysis?
A trend is the general direction in which the price of an asset is moving.
Fill in the blank: A __________ is a graphical representation of price movements over time.
chart
What are support and resistance levels?
Support levels are price points where a downtrend can be expected to pause due to a concentration of demand, while resistance levels are price points where an uptrend can be expected to pause due to a concentration of supply.
What is a moving average?
A moving average is a statistical calculation that helps smooth out price data by creating a constantly updated average price.
True or False: A bullish trend indicates that prices are expected to fall.
False
What does RSI stand for?
Relative Strength Index
Multiple Choice: Which of the following is a common indicator used in technical analysis? A) GDP B) MACD C) Inflation Rate
B) MACD
What is the purpose of volume in technical analysis?
Volume measures the number of shares or contracts traded in a security or market during a given period, indicating the strength of a price movement.
Fill in the blank: __________ patterns are formations that appear on charts and indicate potential future price movements.
Chart
What does the term ‘breakout’ mean?
A breakout occurs when the price moves outside of a defined support or resistance level.
True or False: Candlestick patterns are used to predict future price movements.
True
What does MACD stand for?
Moving Average Convergence Divergence
Multiple Choice: Which of the following is NOT a type of chart? A) Line Chart B) Bar Chart C) Pie Chart
C) Pie Chart
What is a bearish divergence?
A bearish divergence occurs when the price of an asset rises while the oscillator (like RSI) falls, indicating weakening momentum.
Fill in the blank: The __________ is a line that indicates the average price over a specific period.
moving average
What is the significance of the 200-day moving average?
The 200-day moving average is often used as a long-term trend indicator, with prices above it indicating a bullish trend and prices below indicating a bearish trend.
True or False: Technical analysis can be applied to any market, including stocks, forex, and commodities.
True
What is the primary assumption of technical analysis?
The primary assumption is that all information is already reflected in the price of the asset.
What is the purpose of backtesting in technical analysis?
Backtesting is used to evaluate the effectiveness of a trading strategy by applying it to historical data.
Fill in the blank: A __________ is a tool used to gauge market momentum.
momentum indicator
What does the term ‘whipsaw’ refer to?
A whipsaw refers to a market condition where an asset’s price moves sharply in one direction and then quickly reverses direction.
Multiple Choice: Which of the following is a lagging indicator? A) RSI B) MACD C) Bollinger Bands
B) MACD
