The most important thing in technical analysis is the ability to read and understand charts and what they mean.
Technical analysis has always been the favorite of day-traders who are making a lot of money in the market. Other people who don’t know much about it are always fascinated; they wonder how can someone repeatedly make so much money in the market and can actually make a living out of it. Well, in this article let’s see what technical analysis is and why it is so effective. We will also look at the drawbacks that it has and how much you can rely on it.
When it comes to trading in the stock market or the foreign exchange markets; we look at the technical analysis and charts. But we should also look at things around how fundamentals affect market; trading around news events, and the important aspects of psychology and money management.
In this article, let’s start from the basics and talk about charts and technical analysis: what it is, and what it is not! So, first things first, Technical Analysis is not a magic system that’s going to predict every move in the market. It is a common misconception that if you can only get your charts right; the moving averages, etc. then you can make a lot of money in the market, but it is not so. There’s a lot more to trading than those glorifications of the charts.
Technical analysis primarily involves study of charts using different tools to understand and predict how the market is going to behave. It uses historical data to predict future outcomes; and more often than not, it has proven to be correct and useful; with people making money using the different tools and techniques available in technical analysis.
However, it is extremely important to know and understand that nothing is fool-proof; and nothing can give you 100% correct predictions or results all the time. Same is true for technical analysis, although it might give you a broader picture regarding how the market is expected to behave; everything will not always be accurate, and therefore it is also important to apply your own understanding of different stocks and the fundamental analysis that you’ve done, in tandem with technical analysis; to figure out the stocks in which you want to invest your money.
In our upcoming articles, we will take an in-depth look at the different types of charts and graphs that are used in technical analysis; we will do a detailed review of each technique that you can use in your technical analysis of a share or a stock. Stay tuned!
Meanwhile, you can check out our other blogs here!
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Very helpful as I am new to the market. Keep posting such blogs.
Thank you :)
Give Detil how it’s work.
News good or bad is equal important.
It is a great information. Helping to increase knowledge. Sir I will be very muchgreatful, if you will post on topic- How to read the charts
Dear sir
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Sir ji , your suggestions are very much beneficial for us , just like me a new comer in this market..Sir God bless you .... you are lucky for thousands of people.. thanks Sir.