What is a business formula?
The business formula is a specific trend that occurs in securities prices that are traded for discreet periods. Usually business formulas are considered to be one aspect of technical analysis - a method that is used to determine the value of shares, bonds and other securities. Technical analysis uses macro access to view trends and business samples rather than what is happening in a certain company. Basic analysis is another type of stock valuation and is based on how the company does business and its history. The adage "is a psychological market" is a specific reference to business patterns or fluctuations that are often caused by public mood. Often there is a high degree of correlation between national or world events and securities. Business patterns occur on the eve of the economic cycle. Ascending channels is a formula of securities trading, where the price of the shares is constantly increasing over the time period. descending channels , on the other hand, is a model where securities were traded at a lower price every day at a given time.
The third type of trade pattern is known as Cup and Handle . This business formula acquires the name for the shape of the "U" that he creates when it is represented in the graph. Usually, the formula has a cup and handle of the peak followed by a gradual decline and then a gradual rise. The "handle" occurs after the securities reach their second peak, after which the prices fall.
Security has head and shoulders pattern if it resembles the outline of the head and shoulders when it is mapped on the graph. First, the value of the securities increases, then straightens and they reaches the peak. After the second peak they fall to the level of the first peak, they equalize and then fall.
Finally there is a business formula triangle that is characterized by a sharp increaseBy means of value, peak and then decreases to its original level.
Although business formulas can be excellent indicators of growing shift on the market, they are best viewed in a wider context. This means that although they can be an important aspect of technical analysis, it is good to look at the history of specific business formulas. For example, what were the market and world conditions every time a specific business formula appeared? What, if at all, were similarities? What happened afterwards?