How does Technical Analysis work? Is it good for Trading?

Technical Analysis It means a method of evaluating securities by analyzing statistics generated by market activity, Past prices, Volumes.

1) TA does not attempt to measure intrinsic value.
2) instead look for patterns & indicators on charts to determine future performance.
3) TA focus on price & volume data

Technical Analysis is based on the assumption that security prices move in trend & that those trends are likely to repeat themselves over time.Hence if you can recognize a trend on the charts. You can determine where prices are likely to go to unexpected events happens that create new trends.

Study Based on Three Factors.

1) Focus:- Price & Volume.
2) Data:- charts.
3) Goal :- Trading.

The Field Of Technical Analysis Is Based On Assumptions.

1)The market discount everything.
2)Prices moves in trend.
3)History trend to repeat itself.
4) TA assumes that, at any given time, a stock’s prices reflects everything that has or could affect the company.

Technical Analysis Believes.

1.TAbelieves that securities moves in very predictable trend & patterns.
2.Trend continue until something happens to change the trend.
3.until that change take place, price level are predictable.

What is Technical Analysis Indicators?

TA indicators are mathematical equations that summarize price action.
Moving average.

What Is The Difference Between Technical Analysis & Fundamental Analysis?

FactorsFundamental AnalysisTechnical Analysis
DefinitionValue calculated using various economic factorsUses price movements & patterns on charts to predict future price movements
Data formEconomic reports, news events, industry factorsChart analysis
Asset Bought (Sold)when price falls below (above) intrinsic valuewhen trader sees a price formation that has a high probability of moving into profit in near future
Type of TraderUsually longer term position tradersGenerally swing traders & short term day traders
Time HorizonOften holding for days, weeks, or even monthsCan be long, but most take positions for days, minutes, or even seconds
Concept UtilizedReport expectations vs actual outcomes,
current news events compared to historical events
Trendlines, support & resistance (supply & dem&), dow theory, price patterns

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