TA 101 is going to be a series of articles, where we will explain the basics of Technical Analysis article by article. We will keep things simple and crisp. After the end of this series you guys will have a fairly good and accurate knowledge of Technical Analysis, well at least that’s our goal.
The things we are going to be teaching in these articles can help a beginner trader shape his skill and learn things in a simple manner. When we look on social media, we see that Technical analysis has been made complicated by the various pappu trainers of the YouTube and Twitter world.
Here is our attempt to simplify it, hope you enjoy these articles and learn something out of it. Let’s begin.
What is Technical Analysis ?
Investopedia says Technical analysis is a trading discipline used to evaluate investments and identify trading opportunities by analysing statistical trends gathered from trading activity, such as price movement and volume.
Confused? We will understand this now in simple terms.
Technical analysis is nothing but a set of different approaches a trader takes for trading. It can be use of Dow Theory, Elliot Waves, moving averages, Candlestick patterns. Any approach that a trader takes to anticipate the price movement, to take a trade and benefit from it, is called Technical Analysis.
Technical analysis focuses on reading different chart patterns, moving averages and the ability to look back at how prices acted at a certain point and predicting the future behaviour of the price again based on historic price action.
There are some well-known chart patterns that we refer to in the field of Technical Analysis.
1.Head and Shoulders
2. Double Top (Bearish)
3. Double Bottom (W) (Bullish)
4. Cup and Handle (Bullish)
There are many more such patterns. Many traders have come across and heard about these patterns, but they don’t know the proper way to apply them and when to apply them.
To apply these patterns, you first need to identify the trend which is the most important aspect and we will learn about it in our next article there are set of parameters that we need to check before applying these patterns. We will study about them in detail in coming articles.
So we hope you keep visiting and checking this space to learn Technical Analysis in a more simplified way.