In real life sometimes 'words' are
misleading. One such word is here- 'Technical Analysis'.
I feel there is nothing 'Technical'
about 'Technical Analysis'. When you read the word Technical Analysis you feel
there is something which involves great Engineering or Science or a Complicated
Algorithm.
Here is good news. There is nothing
complicated in Technical Analysis.
Actually, it (Technical Analysis) is
a study of Market Emotions with the help of the Price of Stock and Volume
traded (quantity bought and sold). I feel it should be renamed to Emotion's
Analysis.
But we shall go by the name Technical Analysis in this article.....keeping aside what I feel.
So Technical Analysis is the study of Price and Volumes of stocks or Index or Future or Options or anything that is trad-able. Price is plotted on a chart either in the form of a line or candlesticks or bars (more on candlesticks and bars later). This price chart gives us the price movement of stock since it is listed on the stock exchange.
Technical Analysis works or believes in the following principles:
But we shall go by the name Technical Analysis in this article.....keeping aside what I feel.
So Technical Analysis is the study of Price and Volumes of stocks or Index or Future or Options or anything that is trad-able. Price is plotted on a chart either in the form of a line or candlesticks or bars (more on candlesticks and bars later). This price chart gives us the price movement of stock since it is listed on the stock exchange.
Technical Analysis works or believes in the following principles:
1. Stocks move in trends - Uptrend, Downtrend and Sideways (Neutral) Trend
2. The trend continues till its important Support or Resistance is not broken (More on Support and Resistance later)
3. Volumes are important to confirm the trend
4. Earlier Price movements (patterns) are repeated in future
5. Emotions, News can be seen on charts with the help of price movement and volumes
Technical Analysis is like a Compass that shows direction when you are lost in the jungle. Charts in Technical Analysis helps in identifying where the stock is currently trading as compared to its High Price and Low price.
Support and Resistance on the chart help in making Buying and Selling decisions with less risk of high-profit potential.
Later, any other tools are known as Indicators, Oscillators, Moving Average are developed. These tools support decisions taken based on Price and Volume.
We have designed a course in the StockMarket and Technical Analysis for those who are starting new in stock markets. I coach my students on all aspects of Technical Analysis and how to trade markets using Technical Analysis.
Technical Analysis can be applied to any stock, Index or any market such as Commodity or Currency.
There is a growing population which is using Technical Analysis to trade the markets.
Click on the below links to join our Intraday Calls channel or visit our website www.money4me.in for training course details.
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Disclaimer: The contents produced here are purely for educational purposes. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on the above write-up.
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