All our instructors are asked to explain why the students should take this lesson
Why you should learn about technical analysis?
Many years back, the subject was called chart analysis, or charting. The “technical” was added later. Don’t be daunted, it seems like a big term but the subject has very little to do with science or technology – other than we use laptops to track prices!
Understanding technical analysis will change the way you trade and give you control and confidence over your investments.
Anybody who wants to make an effective investment in the financial market should have knowledge of basic technical analysis. And really, it is not as difficult as you think it is. If you love the charts then the chart will tell you the secret of unlocking them.
While there are several things that you need to learn as a beginner, starting your investment journey by understanding the stock charts is a wise decision.
After all, charts are the place where technical analysis begins and ends. Even traders who primarily use fundamental analysis to select stocks to invest in still often use technical analysis of stock price movement to determine specific buy, or entry, and sell, or exit points. This can help you to decide when to time your trades.
If you want to understand why stock charts are so valuable, this is why:
You have to first realize that fund managers and other large institutional investors account for 80% of all trading activity in the market. It is their buying and selling that will either push your stock up — or down. So as an individual investor, your basic goal is to buy stocks institutional investors are buying heavily — and avoid stocks they're aggressively selling...
That's where charts come in. The chart records a stock’s history, illustrates current conditions, and serves as a roadmap to show whether a stock is trending up or down. For investors, the stock chart is the tool that separates the novice from the pro.
Once you know what to look for, you'll see that charts literally show you what these big investors are doing. You'll be able to quickly recognize when a stock is being heavily bought or sold — and you'll use that information to identify the best time to buy, sell or hold your stock positions. This can help you decide when to time your trades.
Skilled chart readers can determine much more by learning how to read stock charts. Subtle clues in the price and volume action can tell you many things including whether the stock is:
- behaving normally or abnormally,
- falling in or out of favor with institutional investors
- beginning or ending a price advantage
You will soon realize that charts tell you stories. They cut through all the rumors, headlines, and hype to paint an objective picture of what is really going on with the stock.
Using charts to predict future price movement is valid not just for stocks, but also for bonds, currencies, cryptocurrencies, and commodities. The most important thing for it to work is that there is an even playing field and that everyone can see accurate and reliable data.
If you’re still wondering whether picking up the subject is worth your while, what if I told you that today, in the dealing rooms of most investment banks, technical analysis, or charting, is used constantly?
Enrol now and we will teach you to analyse the stock charts and what all those crazy lines represent.