What are the most effective Technical Analysis strategies to use during a recession?

The simplest and most common strategy in TA is "follow the trend" "trend is your friend" During recession, technical analysts will do well to know the orderflow of the market and take trades in dominant trend direction. This helps to avoid a longterm drawdown and accumulation of losses.

I think momentum trading style is one of the best trading styles to use for anyone. By definition, momentum trading means you're trying to trade in an asset class that has a strong momentum/trend - whether it is up side or down side. Since we are speaking of recession times, I believe most of the stocks crash in that period. So the simplest trading system in momentum trading is following two indicators: 1 - 200 Day Simple Moving Average 2 - 20 Day Simple Moving Average The first 200 DMA is used to broader trend (if it is below this line, it is negative, if above, it is positive) The second 20 DMA is used for short term trend (if the stock is below this, it's negative, if above, it's positive) Risk management: 1:3 (1% Stop 3% Target)

Momentum trading is as easy and straight forward as the trend identification method. Momentum in a particular direction shows the direction of the most powerful bias of the market. RSI, MACD and moving average (EMA 200) can all help to identify this in the market.

Intermarket analysis provides critical insights in the market opportunities for a technical analyst. This involves checking the parity, correlation of different charts across boards to determine the performance and causation of one stock or currency pair against an underlying market stock or currency pair.

Support and resistance are both major pillars of TA as countless approaches and concepts in price action and indicators are built solely on this. During recession, an economy drops massively and its chart is found on a support when the country is getting stabilized to pump in more money into the economy, that confirms a bullish move for such chart. Ideally, TA looks to buy on a support zone and sell at resistance.

Candlesticks can as well provide deeper insights in the markets. Such as 2022 flashcrash, some candles on some charts indicated a very long wick and rejection which still serves as a reference point till date. The representation of candlesticks cover the price opening and closing, momentum in the market, bias of traders, emotion of analysts and so on. This has a huge importance on how we interpret the market condition during recession.

Navigating financial storms requires more than one compass: Technical: Seek beaten-down stocks. Use indicators like RSI and Bollinger Bands. Oversold conditions bring potential for a comeback. Fundamental: Check financial health – scrutinize earnings, debts, and cash flow. Pick stocks that won't spring leaks in a storm. Fair Value: Navigate using stars – calculate fair value, seek a gap between current price and true value. This gap is your cushion in stormy markets. Psychological: "Feel the wind" – check market mood with tools like the VIX. Bad sentiment? Opportunities often hide behind fear. The sweet spot is where all conditions align: oversold stock, strong fundamentals, low price, and market sentiment. That's your way out of the storm.

I think momentum trading style is one of the best trading styles to use for anyone. By definition, momentum trading means you're trying to trade in an asset class that has a strong momentum/trend - whether it is up side or down side. Since we are speaking of recession times, I believe most of the stocks crash in that period. So the simplest trading system in momentum trading is following two indicators: 1 - 200 Day Simple Moving Average 2 - 20 Day Simple Moving Average The first 200 DMA is used to broader trend (if it is below this line, it is negative, if above, it is positive) The second 20 DMA is used for short term trend (if the stock is below this, it's negative, if above, it's positive) Risk management: 1:3 (1% Stop 3% Target)