Stocks Technical Analysis is Based on 3 Factors Common in the Stocks Market:
1. Stocks Price Moves in Trends
stock tradings price movements follow trends. This means that after a stocks trend has been established, the future stock market price movement is more likely to be in the same direction as the stocks trend than to be against it. Most stocks strategies are based on this stocks technical analysis concept - stocks trend trading.
2. Stocks Price Movement Discounts Everything
stock trading technical analysis only considers stocks price movement and assumes that, at any given time, stocks price reflects everything that has or could affect the stocks trading instrument including even the fundamental factors. This only leaves the study of stocks price, which is a product of the supply and demand for a particular stocks instrument in the stocks market.
3. History Tends to Repeat Itself
History repeats itself mainly in terms of stocks price movement. The repetitive nature of stocks market movements is attributed to stocks traders investor psychology; in other words, stock trading participants tend to provide a consistent reaction to the stocks market most of the time. stock trading technical analysis uses stocks chart patterns to analyze these stocks price movements. Although these stocks charts represent historical data they are still relevant because they illustrate stocks chart patterns that often repeat themselves.
List of All Stock Indicators - Stocks Technical Analysis Explained - Stocks Technical Analysis PDF
Understanding this stocks technical analysis of the stock trading market can be a valuable stocks tool in determining the stocks trend of any stocks market and assisting with entry and exit levels for your stock trades.
The goal of these stocks technical analysis methods is to help stocks traders determine when the stocks market is trending, and when it is not. If the stocks instrument is moving in one particular direction, then we want to be on board. If the stocks trading instrument is not moving in a particular direction, all you are going to do is lose money as you will get whipsawed around and this is not what we want as stocks investors.
Unfortunately, many traders fight the stocks trend and buy or sell in the opposite direction of a this stocks trend direction, trying to pick a top or a stocks market bottom, only to see the stocks market move further in the direction of the trend.
Another common mistake stocks traders often make is adding on to a losing stocks position, averaging a loss. This is not a good stocks strategy especially in a strongly trending stock market. It is something that experienced investors never do. The stocks trend is your friend, never go against it.
This stocks technical analysis studies alert investors of stocks setups and there are no certainties in financial stock market. Profits come from using proven stocks strategies and stocks methods to find a trending stock and taking stock trades in the same direction of the trend.
With so many stocks investors using similar stocks tools, stocks technical analysis can become a self fulfilling prophecy. If many stocks investors use the same levels as a buying point, the stocks price goes up as everyone will make similar stocks technical analysis moves. However, the question is always how long these stocks moves will last?
Understanding this stocks technical analysis methods will give the stock charts some meaning when you look at them and apply stocks technical analysis. stock trading technical analysis will help you understand why certain stocks price movements occurred.
stock trading charts are used with stocks technical indicators to look for stocks chart patterns that have occurred in the past under certain conditions. When these conditions are noted again, you can use the past stocks chart patterns studies to make a buy or sell decision.
Some of the most common stocks technical indicators include: Stocks Technical Analysis Explained
- Moving Averages Stock Indicator
- Relative Strength Index Stock Indicator
- Stochastic Oscillator Stock Indicator
- MACD Stock Indicator
- Fibonacci Retracement Stock Indicator
- Bollinger Bands Stock Indicator
Most stocks technical indicators are shown separately from the stock chart usually below it. This is because these stocks technical indicators often use a different scale than that of the stocks price chart.
Some of the stocks technical indicators are shown on the stocks price chart itself, such as Moving Averages and Bollinger bands - these indicators are referred to as stocks price overlays.
Explanation of these stocks indicators is found under the topic: List of All Stock Indicators Analysis Tutorial - Stocks Technical Analysis Examples
SUMMARY
- Stocks Technical Analysis Relies on Defining Probabilities
- Stocks Technical Analysis Uses History of Stocks Price Patterns
- Stocks Technical Analysis Uses Several Analytical Tools (Stocks Indicators)
- Stocks Technical Analysis Uses Stock Chart Patterns
How to Trade Stocks Trading With Stocks Technical Analysis Tutorial
Most stocks traders prefer technical analysis - learning the stocks technical analysis methods also takes time to learn due to its nature which involves abiding by the stocks technical rules.
To learn how to trade stocks successfully, it is important that you understand the 3 strategies, outlined below:
1. Stocks Trading moves will always follow a stocks trend which can be identified by looking at the stock chart patterns or the stocks candlesticks charts. If any stocks investor tells you that you can also profit from the counter-trends consistently it will not be possible because the stocks trend is the only proven method of making money in the stocks market.
2. The market forces will drive the stocks instrument stocks prices up or down depending on supply and demand. stock trading technical analysis seeks to measure the demand supply of a stocks trading instrument using various stocks technical analysis tools and stocks indicators. The demand supply is reflected in the stocks price action. Therefore, by simply looking at the stocks price movements themselves you can try and predict what direction the stocks price is likely to move towards using one or two stocks technical indicators - stocks technical analysis indicators like the moving average or support and resistance levels stocks indicators.
3. The stocks market not only shows the history of the past stocks prices, but will also follow the stocks trend that was in place, until its stocks trend direction reverses. Some very important stocks indicators used to determine these stocks market movements are Moving Averages, MACD and Bollinger Bands Stock Indicators.
When stocks price starts to consolidate, which means there is no stocks trend, you should use a different approach to analyze the stock market. You should use support and resistance levels and breakout stocks strategies to analyze the ranging stocks market stocks prices.
When the stocks market retraces, you should use stocks chart patterns and stocks technical indicators to analyze whether the current stocks trend will continue or reverse.
