Top 6 Techniques for Technical Analysis in Masters Dissertation

Dissertation writing is one of the longest tasks students often take on their nerves. Still, with little guidance, students can learn how to write an introduction, literature review, and even the methodology section of a dissertation. However, the analysis is no less than dodging a bullet for most of them. The analysis is a technical task that refers to sorting, organising, and summarising the collected pieces of information to unveil its hidden pattern.

For conducting analysis, a student must be trained enough to effectively use several tools and statistical analysis techniques to properly select the variable and identify the relationship between them. In the same context, technical analysis is another difficult type of analysis that helps traders to predict the price movements and trends changes in markets. This article aims to help students facing difficulties applying technical analysis to a masters dissertation.

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Technical analysis: A brief introduction

It is the most popular analysis used by day traders’ to predict market trends. Many use several strategies to estimate fluctuations in market trends and price movements to make an educated investment decision. Mostly, this estimation is performed by evaluating past trends and using a variety of technical indicators. These technical indicators help traders in speculation about where the market prices of a product may go. Technical analysis is mathematical calculations that allow traders to estimate when an asset is experiencing oversold or overbought conditions.

Moreover, these indicators use the historical price movements’ trends, volume, and open interest information to make predictions regarding financial assets. The list of some best technical indicators that students can also use in performing such analysis includes the Moving Average indicator, Relative Strength Index (RSI), Percentage Price Oscillator indicator (PPO), Moving Average Convergence Divergence (MACD), Average Directional Index (ADX), Bollinger Bands Indicators, Standard Deviation Indicator, Fibonacci Retracement indicators, and many more.

Before using technical analysis in masters dissertation, it is important first to know the basics of technical analysis. Theoretically, the fundamentals of technical analysis are based on three main assumptions: the market discounts everything, price moves in trend, and history tends to repeat itself.   The following is a brief description of these three assumptions to know how the technical analysis works:

• The Market Discount Everything:

Technical analysis is criticised for considering prices and ignoring the different fundamental analyses of a company. It emphasises that stock price reflects all matters that have or may have some effects on a company, including fundamental factors. This assumption explains that all factors one needs to know regarding financial security can be found in the market or stock price.

• Price Move in Trend:

According to this assumption, ‘trade with the trend’ is the basic concept behind the technical analysis. Thus, traders should first need to establish a trend. After that, the future price movement will likely be in the same direction.

• History tends to repeat itself:

In technical analysis, traders have been using patterns and charts for several decades, which are the most reliable method to know how the price movements follow a certain repeatable pattern. This repeated nature of the price movements in the market attributes to market psychology. In simple words, this assumption suggests that technical analysts forecast trends by taking into account the history of the price movement instead of making an uninformed guess.

These three assumptions are among some of the key fundamental concepts that help must need to be recalled before performing technical analysis in masters dissertation or taking a financial investment decision.

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Techniques to perform the technical analysis:

Based on three assumptions (price moves in trends, history moves in trends, and the market discounts everything), the technical analysis in masters dissertation can be performed by using the following techniques and methods:

• Stock charts

Technical analysis aims to predict the future movement of stocks by reviewing past trends; thus, charts are the most important tools that include historical data to interpret the story of a stock’s price action. Candlesticks, line charts, and bar charts are important to stock charts that can help analysts achieve the aim.

• Moving averages:

Moving average is the oldest but most popular technical indicator that works by removing all sharp and frequent fluctuation from the line and bar chart. Moving averages are used by traders to know the reversal of the trend and to measure the right stop loss.

• Momentum indicators:

The technical indicators that measure the momentum of stocks are called momentum indicators. Knowing the overbought by calculating the overbought signals is the main target of momentum indicators in trading.

• Support and Resistance:

Support and resistance levels are two scales vital to analysing the stock charts. Support levels tend to prevent the price from falling further. However, resistance occurs when the market prices hit a peak before start falling again. Calculating both support and resistance level is the best technique to know the market health while doing technical analysis in masters dissertation.

• Stock Volume:

It is simply the measure of the total number of shares traded over time. It also includes the measure of interest to see the significant price action. The stock volume is analysed by seeing the breakout (high trending prices) and breakdown (low trending prices).

• Price indicators:

The indicators that directly consider the price of goods and services to estimate the support and resistance or other trends are price indicators. These indicators are popular for generating converting signals that improve the probability of a price movement direction.

Final thoughts:

A writer who wishes to use technical analysis in masters dissertation must first select a technical indicator. The indicator must be used by keeping in mind the predefined set of assumptions. The article has provided a detailed note on the basic concept of technical analysis and different methods or indicators vital to use in the analysis section of a master’s dissertation. Still, it is up to a researcher’s goals whether one indicator is enough to achieve desired aims or a combinatorial approach will be more suitable. However, if you feel any ambiguity while selecting which indicator will work best for you, you can hire masters dissertation writing services.