Enhance your trading decisions with these technical analysis tools

Technical analysis enables traders to make informed decisions by using data-driven insights to anticipate price movements and time trades effectively. With the right tools and strategies, traders can use historical price patterns and indicators to identify promising investment opportunities, says Roger Eskinazi, managing partner at Tickmill.

“Unlike fundamental analysis, which is based on a company’s financial statements and economic indicators, technical analysis focuses on trends in a stock’s pricing and trading volume and uses charts and patterns to transform this data into actionable insights for trading decisions,” he explains.

He goes on to list some common patterns like “head and shoulders” and “double tops and bottoms”, which highlight potential trend reversals. “A head and shoulders pattern, for example, typically signals a reversal from an uptrend to a downtrend, guiding traders to consider selling positions. In contrast, triangle patterns – where price points converge – often point to a continuation of the existing trend.”

For charting tools, Eskinazi recommends Tickmill’s Advanced Trading Toolkit, which offers enhanced charting capabilities on the MetaTrader platform, enabling traders to observe these patterns in real time. “By combining pattern recognition with intuitive chart tools, traders can act swiftly and decisively.”

Using indicators for market signals

Technical indicators are the mathematical calculations that form the basis of technical analysis. “A moving average (MA), for instance, smooths price data over a specified period, revealing a stock’s overall trend direction. And when a short-term MA crosses above a long-term MA – known as a golden cross – this is seen as a bullish signal, prompting traders to buy. Conversely, a death cross suggests a downward trend, signalling traders to consider short positions.

“Tickmill’s Acuity Trading Tool offers an additional layer of AI-driven insight by scanning market sentiment from news sources, complementing indicator-based analysis. This gives traders a real edge over the markets by enabling them to identify trading opportunities as they arise.”

Timing trades strategically

Combining chart patterns and indicators within a trading strategy enables precise timing of trades.

“One of the most widely used approaches is the trend-following strategy. By identifying and following an established trend – whether up or down – traders align their trades with market direction, supported by MAs and the relative strength index or trend confirmation. Tickmill’s Signal Centre simplifies this process by offering ready-to-trade ideas based on expert analysis, which traders can access directly on their MetaTrader platform,” says Eskinazi.

For more active traders, he suggests Tickmill’s Capitalise.ai tool, which enables traders to create customised, rule-based strategies in simple English. “Without any coding, traders can create AI-driven strategies to enter and exit trades with precision.”

Copy successful traders to share in their success

Becoming a successful trader takes time, knowledge and experience. If you’re still learning, Eskinazi recommends Tickmill’s Social Trading platform, which allows you to connect to other accounts and copy their trades. “With the social trading, you can skim through Tickmill’s most successful traders, check their trading history and choose the ones you want to copy. While they’re trading, you can copy and, in the process, learn from their successful strategies.”