Technical Analysis depicts historical prices and analyses the daily traded volumes in bid to endeavor current price trend. They use high end graphs and chart with the extract the information with the help of certain indicators and patterns. This helps the traders to identify buy and sell opportunities. Technical Analysis is done through Indicators and Charts.
Most economists talk about where the economy is headed – it’s what they do. But in case you haven’t noticed, many of their predictions are wrong. For example, Ben Bernanke (head of the Federal Reserve) made a prediction in 2007 that the United States was not headed into a recession. He further claimed that the stock and housing markets would be as strong as ever. As we know now, he was wrong.
Because the pundits’ predictions are often unreliable – purposefully so or not – it is important to develop your own understanding of the economy and the factors shaping it. Paying attention to economic indicators can give you an idea of where the economy is headed so you can plan your finances and even your career accordingly.
There are two types of indicators you need to be aware of:
- Leading indicators often change prior to large economic adjustments and, as such, can be used to predict future trends.
- Lagging indicators, however, reflect the economy’s historical performance and changes to these are only identifiable after an economic trend or pattern has already been established.