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Technical Analysis

Develop a new online trading strategy

As the online trading market continues to grow in size and knowledge, technical analysis is increasingly being used by traders and investors looking to add an extra element to their trading. The use of technical analysis can be a valuable tool in building a market strategy and maintaining trading discipline. ActivoTrade's online trading platforms have built-in, easy-to-use tools that allow traders to harness the benefits of technical analysis.

Accessible systematic trading

Advanced tools like the ActivoTrade technical analysis program, mean detailed methods of market study are at the fingertips of the modern online trader. Systematic trading is no longer reserved for institutions and professional money managers – now advanced technical research is within the reach of all investors.

Move online trading to an advanced level

ActivoTrade's easy-to-use program helps traders anticipate price trends in trading and the stock market by analysing price history and looking for patterns and relationships. When predefined criteria are met, users will be aware so they can benefit from all opportunities. It's a bit like having one's own dedicated analyst or stock manager on ‘market watch' to find trading opportunities.

There are many advantages to the innovative technical analysis tool available through ActivoTrade's online trading platforms. Firstly, it offers classic pattern recognition in selected Forex crosses and indices, meaning individuals are alerted when key indicators arise. A Technical Stock Screener offers trading ideas for online trading based on market data by using screening criteria that users either select or input – so investors can actually specify what they want to look for and the format in which the results are delivered.

Technical analysis education

Included in the ActivoTrader and ActivoWebTrader technical analysis program is an educational section that teaches the user about technical analysis, explaining how it offers the opportunity to view the market in a different context from the ‘non-systematic' trader. Everything from Bollinger bands to Gann charts are defined clearly and in explicit detail, including the pros and cons of using each type of analysis.

As the popularity of technical analysis has grown, it is estimated that in some markets as many as 80% of trading decisions now have a technical rather than fundamental foundation. This statistic shows how in today's uncertain markets, the need for making fully informed trading decisions is more important than ever. The technical analysis tool, combined with the streaming news modules and company-specific information available through ActivoTrade platforms make a powerful combination of trading resources.

Benefits of a technical or "systematic" approach

The deployment of predefined rules by which trades are first placed and then managed is currently a growth area for private traders.

The benefits of such an approach to the market are numerous, with the four main ones being the eschewing of behavioural bias, an emphasis on discipline, the development of a quantitative process and rigorous risk control. A trading system can be relatively easy to both evaluate and risk manage before any capital is put at risk, because the performance characteristics can be observed in advance over a wide range of market conditions.

Systematic trading means discipline

The systematic trader observes and assimilates the various technical factors present in the market, making a judgement as to their significance and evolving a strategy to offer the best risk/reward trade for that scenario. However, creating a consistently profitable trading system is an immense challenge and should not be underestimated. Newcomers who think that taking a couple of their favourite technical indicators and wrapping them up with a stop-loss and profit target will be sufficient to achieve their goals, are likely to be disappointed in the long term.

It is important for traders to create more than a single model applied to a single instrument. A portfolio of carefully chosen diversified models is likely to be more stable, resulting in controlled profit fluctuations and a smoother equity curve. And that means greater leverage opportunity and potential profits.