Stock Market Technical
Technical Analysis is the
study of prices and volume, for forecasting of
future stock price or financial price
movements.Technical analysis can help investors
anticipate what is "likely" to happen to prices
Technical analysis is not an exact science.
It's an art and takes considerable experience.
But don't worry everyone with each knowledge can
Technical Analysis is based on these three
#1 - Price Discounts Everything
Technical analysts believe that the current
price fully reflects all information. Because
all information is already reflected in the
price, it represents the fair value, and should
form the basis for analysis. After all, the
market price reflects the sum knowledge of all
participants, including traders, and …
Stock Market Technical analysis utilizes the
information captured by the price to interpret
what the market is saying with the purpose of
forming a view on the future.
#2 - Prices Move in Trends
Technical analysts or chartists believe that
profits can be made by following the trends. In
other words if the price has risen, they expect
it to continue rising; if the price has fallen,
they expect it to continue falling. However,
most technicians also acknowledge that there are
periods when prices do not trend.
#3- History Repeats Itself
Technical analysts believe that investors en
masse repeat their behavior and they assume that
there is useful information hidden within price
histories; that it is a way of analyzing the
past actions of people in a particular market as
reflected by their actual transactions.
Technical Analysis Tools
Every technical analyst needs charts and
indicators to study market. Three common
types of charts are used by investors: Line
Chart, Bar Chart and Candlestick Chart.
Line Chart is formed by
plotting one price point, usually the close, of
a security over a period of time. Connecting the
dots, or price points, over a period of time,
creates the line.
Bar Chart is
drawn by high, low and closing price. Sometimes,
bar charts are drawn by opening price. In this
case, bearish bars are drawn with another color.
Candlestick Chart A form of
Japanese charting that has become popular in the
West. A narrow line (shadow) shows the day's
price range. A wider body marks the area between
the open and the close.