WHAT IS TECHNICAL ANALYSIS? | BASICS OF TECHNICAL ANALYSIS | EXPLAINED| HINDI

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Today we'll learn WHAT IS TECHNICAL ANALYSIS?

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Technical analysis is mainly used for short term trading. Technical analysis is a statistical method used to find Pattern and Price movement. It is used to identify the time to buy or sell the stocks or shares. Means it helps to identify the entry point and exit point while trading.

Majority of investors uses Technical analysis while trading in stock market. It helps them to maximize the chances of making profit in a trade.

For example,

if you are willing to buy the stocks of a drug supplier company, the technical

analysis will help you study the past records of ups and downs in the prices of that company.

Through the help of historical prices and their graphic representations, it will help you draw a common pattern for the ups and downs in the prices. Relying on those patterns, it will help

you forecast when the prices of the stocks of that company may rise and when it may fall in

future and make a decision whether you should buy their stocks or not.

ADVANTAGES OF TECHNICAL ANALYSIS.

1. Trend Analysis

The biggest advantage of technical analysis is that it helps investors and traders predict the

trend of the market. Up trend, downtrend, and sideways moves of the market are easy to

predict, with the help of chart analysis.

2. Entry/Exit Point
Timing plays an important role in trading and investing. With the help of technical analysis, traders and investors can predict the right time to enter and exit a trade thereby enabling good returns. Chart patterns, candlesticks, moving averages, Elliot wave analysis, and other indicators are very useful for traders to make entry and exit points.

3. Provides Early Signal

Technical analysis gives early signals and also paints a picture about the psychology of

investors and traders regarding what they are doing. Price-volume analysis also indicates the movement of market makers and their activities related to a particular market. Another main advantage of technical analysis is that it gives an early signal when it comes to trend reversal.

4. Quick and Less Expensive

In currency trading, technical analysis is less expensive as compared to the fundamental

analysis and there are so many companies that provide free charting software. Technical

analysis gives a quick result for traders who use 1 minute, 5 minutes, 30 minutes, and 1 hour charts. For instance, the formation of a head and shoulder on 1 minute and 5 minutes chart gives fast results, as compared to the daily chart.

5. Provides Lots of Information

Technical analysis is helpful for short term trading, swing trading, and long term investing. Technical charts provide a lot of information that helps the traders and investors build their positions and take trades. Information like support, resistance, chart pattern, momentum of the market, volatility, and trader’s psychology are just some examples of types of information provided by technical analysis and used by traders in the Forex market.

6. Market news reflects the stock prices.

The stock price is a reflection of all fundamental news. The crowd market psychology is

identified using the patterns. It’s used for price forecasting. This helps investors make informed investment decisions.

There are various types of charts and indicators that are used in Technical analysis.

• LINE CHART

• BAR CHART

• CANDLESTICK CHART

• POINT AND FIGURE CHART

The past price data given by these charts helps you to forecast the future price movement. If you do technical analysis of stocks before investing it helps to maximize the chances of making profit.

HAPPY INVESTING.