- This topic has 296 replies, 296 voices, and was last updated 2 years, 9 months ago by
.
-
Posts
-
Pro : Technical analysis can be be carried out easily when compared to fundamental, as the input like Price and Volume
of shares readily available.
Cons : Can predict the market only for short term and risk is slightly higher as so many sudden changes in the business
ground and universe can impact on the market direction.
technical analysis studies the market with price and volume of shares.It predicts the trend of the market.
It cannot studies the company which leads to false predictions sometimes.
Technical analysis looks at a chart of a stock’s price movements. Analysts look for patterns to determine future movements in the stock. There are hundreds of “indicators” that can help find buy or sell points, or price trends and momentum. Indicators have been created by investors over the years. They take the data in the chart and apply a mathematical formula. This produces a line, dot, band or other visual cue for the analyst to interpret.
A technical analyst might say, “I’m buying XYZ because the stock price is above its 50- and 200-day moving averages and has strong momentum at the moment.”
Pros
- Patterns in price and volume can help us identify trends. They can also find price levels where investors tend to buy or sell.
- This analysis goes quickly once you know and understand the indicators you want to use.
- Technical analysis can help you rationalize the price you are paying. In other words, if you researched a company and simply bought it without looking at a chart, you have no way of knowing where the stock is in relation to its past.
- Would you want to buy a stock that is at an all-time high and has just risen over 40% in the past month? What if you then looked at a chart and noticed that it had done that three times in the past, and that each time it hit a new high it then sold off 20%?
- There is an overwhelming amount of different indicators out there. It is tough to find the ones that are most effective for your style of trading.
- It takes skill and experience to identify trends and patterns.
Technical analysis is just following the market trend. It helps in understanding demand and supply with the factors price and volume.
Following technical analysis can sometimes lead to false predictions as a trader does not possess enough data.
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>technical analysis studies the market with price and volume of shares.It predicts the trend of the market.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>It cannot studies the company which leads to false predictions sometimes.</p>
- You must be logged in to reply to this topic.
