LEARNING TECNICAL ANALYSIS November 16, 2014 by Ashok Goel·0 Comment Buy technical analysis books explained Technical Analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting price trends. Charts are the working tools of the technical analysts. They have been developed in a multitude of forms and styles to represent graphically almost anything and everything that take place in the market, or to plot an”index” derived therefrom. There may be monthly charts on which an entire months’ trading record is condensed into a single entry, or weekly, daily, hourly transaction, point & figure, candlestick, etc. The term “market action” includes the three principle sources of information available to the technician- price, volume and open interest. There are three premises on which the technical approach is based: -Market action discounts everything. -Prices move in trends. -History repeats itself. The technician believes that anything can possibly affect the price- fundamentally,politically, psychologically or otherwise- is actually reflected in the price of that market. All the technician really claiming is that price action should reflect shifts in supply, prices should rise. If supply exceeds demand, prices should fall. This action is the basis of all economic and fundamental forecasting.. As a rule, chartists do not concern themselves with the reasons why prices rise or fall. Very often, in the early stages of a price trend or at critical turning points, no one seems to know exactly why a market is performing in a certain way. By studying price charts and a post of supporting technical indicators, the chartist in effect lets the market tell him or her which way it is most likely to go. The chartist does not necessarily try to outsmart or outgess the market. The chartist knows there are reasons why markets go up or down. He or she just doesn’t believe that knowing what those reasons are is necessary in the forecasting process. The principles of chart analysis apply to both stock and futures. Actually, technical analysis was first applied to the stock market and later applied to futures. With the introduction of stock index futures, the dividing line between these two areas is rapidly disappearing international stock markets are also charted and analyzed according to technical principles. Financial futures, including interest rate markets and foreign currencies, have become enornously popular over the past decade and have proven to be excellent subjects for chart analysis. Technical principles play a role in options trading. Technical forecasting can also be used to greater advantage in the hedging process. Another strength of the charting, approach is its ability to handle different time dimensions , whether the user is trading the intraday tic-by-tic changes for day trading purposes or trend trading the intermediate trend, the same principles apply. To learn technical analysis, we are recommending four books, which you study to start with. 1: Technical Analysis Explained Buy technical analysis books explained 2: Technical analysis and stock market profits Buy technical analysis stock market book 3: Technical analysis of stock trends buytechnicalanalysisofstocktrends 4: Trading with candlesticks charts buytradingwithcandlestickcharts Read more a2analysts/
Posted on: Mon, 17 Nov 2014 02:53:51 +0000