Stock Trading Technical Analysis is Based on 3 Factors Common in the Stock Trading Market:
1. Stock Trading Price Moves in Trends
Stock trading stock price movements follow trends. This means that after a stock trading trend has been established, the future stock trading market stock price movement is more likely to be in the same direction as the stock trading trend than to be against it. Most stock trading strategies are based on this stock trading technical analysis concept - stock trading trend trading.
2. Stock Trading Price Movement Discounts Everything
Stock trading technical analysis only considers stock trading price movement and assumes that, at any given time, stock trading price reflects everything that has or could affect the stock instrument including even the fundamental factors. This only leaves the study of stock trading price, which is a product of the supply and demand for a particular stock trading instrument in the stock trading market.
3. History Tends to Repeat Itself
History repeats itself mainly in terms of stock trading price movement. The repetitive nature of stock trading market movements is attributed to stock traders investor psychology; in other words, Stock trading participants tend to provide a consistent reaction to the stock trading market most of the time. Stock trading technical analysis uses stock trading chart patterns to analyze these stock trading price movements. Although these stock trading charts represent historical data they are still relevant because they illustrate stock trading chart patterns that often repeat themselves.
Understanding this stock trading technical analysis of the Stock trading market can be a valuable stock trading tool in determining the stock trading trend of any stock trading market and assisting with entry and exit levels for your stock trading trades.
The goal of these stock trading technical analysis methods is to help stock traders determine when the stock trading market is trending, and when it is not. If the stock trading instrument is moving in one particular direction, then we want to be on board. If the stock instrument is not moving in a particular direction, all you are going to do is lose money as you will get whipsawed around and this is not what we want as stock trading investors.
Unfortunately, many stock traders fight the stock trading trend and buy or sell in the opposite direction of a this stock trading trend direction, trying to pick a top or a stock trading market bottom, only to see the stock trading market move further in the direction of the stock trading trend.
Another common mistake stock traders often make is adding on to a losing stock trading position, averaging a loss. This is not a good stock trading strategy especially in a strongly trending stock trading market. It is something that experienced investors never do. The stock trading trend is your friend, never go against it.
This stock trading technical analysis studies alert investors of high probability stock trading setups and there are no certainties in financial stock trading market. Profits come from using proven stock trading strategies and stock trading methods to find a trending stock trading instrument and taking stock trading trades in the same direction of the stock trading market trend.
With so many stock trading investors using similar stock trading tools, stock trading technical analysis can become a self fulfilling prophecy. If many stock trading investors use the same levels as a buying point, the stock trading price goes up as everyone will make similar stock trading technical analysis moves. However, the question is always how long these stock trading moves will last?
Understanding this stock trading technical analysis methods will give the stock trading charts some meaning when you look at them and apply stock trading technical analysis. Stock trading technical analysis will help you understand why certain stock trading price movements occurred.
Stock trading charts are used with stock technical indicators to look for stock trading chart patterns that have occurred in the past under certain conditions. When these conditions are noted again, you can use the past stock trading chart patterns studies to make a buy or sell decision.
Some of the most common stock trading technical indicators include: Stock Trading Technical Analysis Explained PDF - Learn Stock Trading Technical Analysis PDF
- Moving Averages Stock Trading Indicator
- Relative Strength Index Stock Trading Indicator
- Stochastic Oscillator Stock Trading Indicator
- MACD Stock Trading Indicator
- Fibonacci Retracement Stock Trading Indicator
- Bollinger Bands Stock Trading Indicator
Most stock trading technical indicators are shown separately from the stock trading chart usually below it. This is because these stock trading technical indicators often use a different scale than that of the stock trading price chart.
Some of the stock trading technical indicators are shown on the stock trading price chart itself, such as Moving Averages and Bollinger bands - these indicators are referred to as stock price overlays.
Explanation of these stock trading indicators is found under the topic: List of All Stock Trading Indicators - Stock Trading Technical Analysis PDF - Learn Stock Trading Technical Analysis PDF - Stock Trading Technical Analysis Examples
- Stock Trading Technical Analysis Relies on Defining Probabilities
- Stock Trading Technical Analysis Uses History of Stock Price Patterns
- Stock Trading Technical Analysis Uses Several Analytical Tools (Stock Trading Indicators)
- Stock Trading Technical Analysis Uses Stock Trading Chart Patterns
How to Trade Stock With Stock Trading Technical Analysis PDF - Learn Stock Trading Technical Analysis PDF - Stock Trading Technical Analysis Examples
Most stock traders prefer technical analysis - learning the stock trading technical analysis methods also takes time to learn due to its nature which involves abiding by the stock trading technical rules.
To learn how to trade stock trading successfully, it is important that you understand the 3 strategies, outlined below:
1. Stock Instrument moves will always follow a stock trading trend which can be identified by looking at the stock trading chart patterns or the stock trading candlesticks charts. If any stock trading investor tells you that you can also profit from the counter-trends consistently it will not be possible because the stock trading trend is the only proven method of making money in the stock trading market.
2. The market forces will drive the stock trading instrument stock prices up or down depending on supply and demand. Stock trading technical analysis seeks to measure the demand supply of a stock instrument using various stock trading technical analysis tools and stock trading indicators. The demand supply is reflected in the stock trading price action. Therefore by simply looking at the stock trading price movements themselves and you can predict what direction the stock trading price is likely to move towards using one or two stock trading technical indicators - stock trading technical analysis indicators like the moving average or support and resistance levels stock trading indicators.
3. The stock trading market not only shows the history of the past stock trading prices, but will also follow the stock trading trend that was in place, until its stock trading trend direction reverses. Some very important stock trading indicators used to determine these stock trading market movements are Moving Averages, MACD, stochastic Oscillator and Bollinger Bands Stock Trading Indicators.
When stock instrument stock price starts to consolidate, which means there is no stock trading trend, you should use a different approach to analyze the stock trading market. You should use support and resistance levels and breakout stock trading strategies to analyze the ranging stock trading market stock prices.
When the stock trading market retraces, you should use stock trading chart patterns and stock trading technical indicators to analyze whether the current stock trading trend will continue or reverse.