What is Technical Analysis?

Technical Analysis of stock market

Technical analysis is a tool used to identify the future price and valume movement of a stock based on market data suggest.


Why is technical analysis Important?



Technical analysis is mostly used by professional traders with various tools. thus they generate  profit to movement in price  in short-term time frame. So here fundamental analysis is not important in short-term.


Benefits of Different Time Frame Chart


First of all , A technical trader analizes two variablesfor technical analysis  first time-frame and Second  Particular Indicators. 


A technical expert analizes different time frame on chart from 1 min to yearly time frame. There are some most popular timeframe- 

  • 5-minute chart
  • 15-minute chart
  • 1-hour chart
  • 4-hour chart
  • Daily chart frame


Note :

  1.  Mostly an Intraday trader uses 5 or 15 -minutes time frame.
  2. Swing Trader uses 1-hour or daily time frame to execute the trade.
  3. Investor (Long-term) uses weekly or monthly time frame.



Technical Analysis Tools


Anyone can learn technical analysis by using some basic tools. By using this methods trader takes a position of the trade.


  1. Trend lines 
  2. Support and Resistance Levels
  3. Trading Valume
  4. Chart Patterns
  5. Candlesticks Patterns
  6. Indicators


What is Trend Lines?



Trend Lines are basically those lines that represent to predict the direction of a stock. Trader may be interested in opening or exiting a position to maximize gain and minimize risk.



What is Support and Resistance Levels?


Support and resistance Level 



The support and resistance are particular price point on a chart to attract the maximum amount of either buyer or seller.


Support Price level = buyer > Seller

Resistance Price level = buyer< Seller




What is Trading Volume?


Trading Valume is an important tool for traders to use determine interest in a stock. It refers to the number of share of a given security that change hands over the course of a trading session.


What is Chart Patterns?

Chart Patterns 


Chart pattern is one of the most helpful tools. Before taking a  position we have to find find out some certain patterns to appear on price chart. Trader can draw triangle and other geometric shown price chart.


Some important chart patterns - Bullish and bearish  chart, ascending triangle, double top and bottom, head & shoulders patterns.



What is Candlesticks?


Candlestick Patterns 



Japanese candlesticks helps a trader 5o give a tip of upcoming price movement. Every candle represents four important pieces of information - Open, Close,High and Low price point. 


ЁЯСЙMainly there are three types of Candles

  1. Bullish candle
  2. Bearish candle
  3. Dogi candle



What is Indicator?

Indicator 


Stock market Indicator is a mathematical tools that is used by a trader to predict financial trends or prices.


Some Helpful Indicators - Moving Average, Bollinger Band, RSI , MACD, EMA, Pivots.



Conclusion: 

Thank you for reading way2learn with Lavkush guide on Technical Analysis – A Beginner’s Guide. To keep learning and developing your knowledge of financial analysis, you should read all the post. Send me feedback and if you have any question then comment in it.