Technical Analysis is the study of market data in a graphical form. Every transaction that occurs in the market is recorded and documented. This allows software companies to write programs that create stock charts that show what happened with price, volume, share size, etc, over any period of time from a tick to many years.
To be successful, all traders and investors should keep technical analysis simple, easy to use, and reliable. Some traders try numerous 'strategies' or trading systems, and are still dissatisfied with their results. Instead of learning how to trade properly, they become overwhelmed, frustrated, and begin to feel that the market is "out to get them." We assure you, it is not. TechniTrader® has helped thousands of traders learn how to use technical analysis to optimize trading and investing profits based upon their own unique trading style, goals, and capital base.
Technical analysis is an important part of your complete training for success in the stock market. For traders who hold stocks for longer periods of time, financial and fundamental information must also be studied before a stock is traded. Additionally, you must understand how to distribute your capital base correctly for maximum profits with risk analysis and risk control. TechniTrader®'s training is easy to learn and use.
The first aspect of technical analysis that you need to learn is how to read and interpret stock charts and indicators. You will also need to select the appropriate trading software for your trading style and goals. And you will need to learn how to paper trade or use a simulation trading program to practice your new learned skills before ever risking real money on stocks in the market.
Technical analysis is often scoffed at by "Fundamentalists" who only study the company's financials. What is wrong about this approach is that you are unable to see the price activity for the stock, how it has moved in the past and how much further it is likely to move before it hits a significant roadblock. Fundamentalists do not believe in technical analysis because they don't understand it and a few technical analysts have made the mistake of trying to predict the future with technical analysis. Predicting the future is impossible, but what technical analysis can do for you, is tell you where the stock has been, how well it is trending or consolidating right now, and whether or not the institutional investor or the institutional trader is buying or selling this stock. This information is vital to all who wish to be successful investors and traders.
There have been many companies that have had excellent fundamentals but whose stock just sat in a flat price range for many years. A prime example is Disney during the past few years. Disney had solid fundamentals but its stock never reacted to those good financial statements. Why? Because the institutional investors weren't buying the stock. There's a lot more to selecting a stock than just a good P/E ratio and a listing in IBD.
The length of time you intend to hold the stock will determine how much financial and fundamental information you will need. The shorter the duration of the hold the less the financial information will be of value to that trade. Day traders will not find financial information of much use. Long term investors will need to study fundamentals in-depth and study the product and sector cycles as well.
TechniTrader® specializes in technical analysis training for beginners and advanced traders and investors.
