How to evaluate stock price fluctuations

How to evaluate stock price fluctuationsHow to evaluate fluctuations in the price of shares? Sometimes prices go up, sometimes they go down. Sometimes prices fluctuate in a relatively narrow trading range. When prices go up or, on the contrary, go down, we say that there is a definite tendency in this change. Price fluctuations between periods when a certain trend appears, often seem random, and sometimes such fluctuations are in fact random. But when you look more attentively to price movements within trading periods, when random, at first glance, fluctuations in foam occur, it can turn out that the corresponding trading range consists of many mini-trends. The more closely you look, the less and less random these price movements will appear to you. This is the main issue of technical analysis. These concepts play an important role in stock trading.


At the simplest level, technical analysis is associated with identifying periods of time during which certain trends are realized. Generally speaking, technicians prefer their trading operations to be based on markets in which certain trends appear. The idea is to determine as accurately as possible the timing of the beginning and end of the trend. However, what kind of trends are we talking about? Do you belong to the category of traders who are primarily interested in mini-trends that make up a certain trading range? Or maybe you are more interested in executing trading operations using longer trends?


Thus, the essence of technical trades is to identify the trend in the change in the share price at a certain length of time during which you intend to buy or sell these shares. Depending on the length of time during which you intend to keep shares, you will base your trading operations on the results of analysis performed at the appropriate time interval. We are mainly interested in long-term trends that span several weeks or even months.In this case, you need to analyze the charts, reflecting daily or weekly price fluctuations. If you are going to store shares for no longer than a few hours or days, you will need to analyze the charts reflecting fluctuations in prices within one trading day. Studying diagrams reflecting fluctuations in stock prices within a single trading day, you will find many examples of mini-trends and trading ranges. If you buy a certain package of shares and hold your position for several weeks or months, then these mini-trends that occur within the same trading day are of no interest to you.

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