Technical Analysis - Trusted spots

What is Technical Analysis - Trusted Spots

 

 

It is the study of past price action to predict what the market may do in the future.

1.  It is the study of Price.
2. Technical analysis is only interested in the past price movements of the chart.
3.  Basically, it is the study of  "SUPPLY and DEMAND".

The biggest advantage of technical analysis is that you can apply it to any asset class as long as the assets have historical data in the form of a price chart. It is and will always be the same whether you apply it on Forex, Binary, Equity, Commodities, Future, or other assets available.

NOTE- Technical analysis is performed by humans; so, it's not science and can never be perfected.

The Technical analysis principle is followed by people all over the globe.

1. Technical analysis is the study of the past price action of any particular security(asset) with the expectation of history will repeat itself.
2. Because of human psychology, price movements are repetitive in nature. Its human reaction ensures that the price history will repeat. 
3. The trend is your friend so trade in the same direction because after a trend has been formed the price is more likely to follow the same trend direction until the trend line is broken, for example- Once an uptrend has been formed, traders get greedy and will buy irrespective of asset price hoping the trend will continue and this creates a chain reaction forcing the market to continue the trend for some time.

NOTE- It is best to stay updated with the news related to the asset that you are trading on because as soon as new information comes out, the market will start reacting and it will soon reflect in the Price action.

How much you can expect? 

If you approach Technical analysis as a quick and easy way to make money in markets, disasters are on their way. Yes, if done right, a windfall gain is possible but in order to get to that stage one has to put in the required effort. TA is best used to identify short-term trades. Do not use TA to identify long-term investment opportunities.

SUMMARY:

• Technical analysis is universal and hence can be applied to any asset class.
• Technical analysis is the study of past price action to predict the market's next move.
• The trend is your friend.
• Stay updated with the news to avoid unnecessary damage.
• Its human reaction that makes the price history repeat.  
• Patterns are formed within the charts and these patterns help a trader identify trading opportunities. 

How to Practice Strategy

The best way to get a firm grasp on any strategies is through deliberate practice.

There is no more efficient way of practicing that than in a Demo Trading Account with a real trading environment.