Technical Analysis Explained
Technical analysis is as the name suggests the observation of stocks using chart data in order to predict ups or downs of any given stock. Those who practice this are generally not concerned about the overall value of a company. They normally engage in short term trading with the idea of making a quick profit. The idea behind any chart data is the recognition of pattern movements. The goal is to spot these patters and make money on them when you can. As a result of efficient data collection by the stock market on events such as natural disasters, terrorist attaches, and company performance the theory is that you will be able to make good calls on any given stock.
The thing to note with this type of investing is that this is not for longer term. The goal of such investors is to watch stock patterns. The fundamentals of company growth are not taken into consideration. Therefore long term performance of a given company is not the key component. The fundamental of technical analysis is the execution of profitable investments over the short term.
Investors using this data can take advantage of stocks that are either rising or falling. They can then implement a stop loss order to reduce losses on either end. This like any other technique with an objective in mind sets out to achieve a given result through the use of data collection over time and then predict outcomes based on that same data. These investors rely on charts and analysis of such charts to make profitable trades. That is the essence of technical analysis.
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The Stock Market Explained If you want to discover your pot of gold in the stock market, then you have to know it inside out. And for all the inside-out information on the stock market explained in simple, concise, layman terms, all you need to do is click on this link: Technical Analysis
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