STOCK MARKET- TECHNICAL ANALYSIS: INTRODUCTION.
The methods used to analyze securities and make investment decisions fall into
two very broad categories: fundamental analysis and technical analysis. Fundamental analysis involves analyzing the
characteristics of a company in order to estimate its value. Technical analysis
takes a completely different approach; it doesn't care one bit about the
"value" of a company or a commodity. Technicians (sometimes called chartists) are only interested in the price movements in the market.
Despite all the fancy and exotic tools it employs, technical analysis
really just studies supplyand demand in a market in an attempt to determine
what direction, or trend, will continue in the future. In other words, technical analysis
attempts to understand the emotions in the market by studying the market
itself, as opposed to its components. If you understand the benefits and
limitations of technical analysis, it can give you a new set of tools or skills
that will enable you to be a better trader or investor.
In this tutorial, we'll introduce you to the subject of technical analysis.
It's a broad topic, so we'll just cover the basics, providing you with the
foundation you'll need to understand more advanced concepts down the road.
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