Tag Archives: Stock Market

Technical Analysis (Part 2)

31 Jan

by 

Continued from Part 1

So what is the advantage in technical analysis?

As it is this human element that moves price, the nature of the market can to a certain extent be predicted, but only over the long term. Let me illustrate this point with a simple example. Call 50 people and we could comfortably predict that a good portion of them, say 50% to 60%, would answer with the classic “hello”. So natural is this response that most would be willing to bet a wager on this. But here is the catch; it is not guaranteed what each individual will say, rather similar to flipping a coin and guessing heads or tails. However, over a large number of guesses we will be correct around 50% of the time. Continue reading

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Technical Analysis (Part 1)

30 Jan

by 

What is technical analysis?

Technical analysis is a rather posh name for a very simple concept in trading. It is basically the study of charts on a computer to determine the best areas to invest in a tradable financial instrument, whether it be stocks (e.g. Google, Facebook or Apple), the Forex or currency market (e.g. USD, EUR or GBP) or commodities (e.g. gold, silver or oil). The charts are made up of price movements which comes through as a live data feed over the internet. Traders can see both what has happened in the past and also what is happening in real time, and can choose to see the data on the time frame suited to their trading style. A scalper may use, say, a 1-minute or a 5-minute chart, a day trader may use a 1-hour chart, and a long-term trader would use the daily and the weekly chart. Continue reading

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