Technical Analysis
Being a millionaire overnight is everyone's dream. Two paths lead to this goal:
I) Becoming rich overnight by winning a contest, game show, lottery, etc.
OR
II) Working hard on something or acquiring a skill, and suddenly things start working for you, and you get recognition and become rich overnight.
If you have the first sight, it would be better to take a direct flight to Las Vegas and let us go. Otherwise, we can talk about a money-maker arena where many people like you, are working. Their job office is not limited to buildings, stores, or even malls. They make money from a wide range of markets including stocks, currencies, commodities, futures, cryptocurrencies and other securities.
Technical analysis is the knowledge of analyzing this market. You can invest in if you see it’s doing well out of its venture or quickly decide to withdraw from a chaotic market and stop losses. Technical analysis provides eyesight to see details and gives you the power to take risky decisions and trade.
You are going to read about all aspects of technical analysis in this one article, although trading is one level higher.
What is technical analysis?
How use technical analysis in trade?
What do we learn in technical analysis?
What is the best course for learning technical analysis?
What is Technical Analysis?
Technical analysis refers to the time history of price and predicts the future of market. Like a ruler in the hand of investors that analyzes the past events and evaluates the next moves.
Technical analysis gives the title of chartist to whom work on price chart. Price chart is the footprint of price fluctuations over time scales. Chartists think through the price chart with the sight of technical analysis and estimate the next price, calculate the risk/ reward ratio, mark buy/sell points and finally get a conclusion about the trend of market. If they invest in the market, they become a trader, otherwise, they only analyze the market and share their prediction with other traders.
Technical analysis Vs. Fundamental Analysis
Technical analysis is the knowledge of exploring market from a technical point of view. It’s the knowledge that investors use to foresee the future of market that stands on the previous manner of price.
On the other hand, the fundamental analysis relies on news, financial assessments, competitors' situation, and overall statements of finance, industry, and market. Hollywood has demonstrated it well in the "Wolf of the Wall Streets" movie. The one who reads more is the winner! Although it needs lots of effort, many believe that it is complementary to technical analysis.
How to use Technical Analysis in Trade?
Technical analysis is an essential tool for analyzing the price chart. It gives you the power of making the right decision at the right time. Right means gaining profit, even by investing at the bottom of a bullish trend and raising your money or by selling at the beginning of a bearish trend and preventing further losses. As time goes on, the outcome of your decision will be revealed. You have to predict the next moves, calculate the possibilities, and consider risks. All these are summed up in one word in technical analysis: Strategy.
Any traders have their own strategy. It depends on his personality, fund amount, and types of trading. There is no encyclopedia for strategies and not any strategy works for every market. It’s completely relative and variable. Ringmasters of market advise new entrance traders to collect pieces of strategies and put them into practice until understanding their effectiveness and validations. Write the consequences down, improve the weakness by a slight change and retest it in different time frames or trends. But keep in mind, that technical analysis is not a science and you are not doing a chemistry experiment! There is no certainty. You have to be flexible to change your mind, change your strategy, be patient and learn the market from itself.
Trading is not like gambling.
Luck doesn't have a place Unless you make logical decisions
What Do We Learn in Technical Analysis?
For decades, technical analysis is the best tool for investors and traders. Because it has learnable basics that everyone can pick up their own trading strategies. Almost every technical analysis course includes these basics:
- Price Action: A professional name for implementing technical analysis knowledge into the price chart and analyzing the market. It is a ground where technical analysis rules are getting to play.
- Support and Resistance: Guidance levels that help traders to see bounds of price, where the price hasn’t fallen below or hasn’t risen higher than that. Support and resistance are known as static trendlines while bullish and bearish trendlines are categorized as dynamic.
- Chart Patterns: If you zoom into the price chart, price moves zig-zag, while by scrolling down and seeing the chart in longer time frames, you surely see repetitive manners. In technical analysis, some of these moves have names and features that knowing them help traders foresee market.
- Candlesticks Patterns or Japanese Candlesticks patterns: The smallest unit of price chart. They are in red or green color and also have individual patterns.
Harmonic Patterns: Goes one level higher in technical analysis and steps into the advanced courses beginning with harmonic patterns.
Eliot Waves: It’s a theory that has acceptable accuracy of prediction. The intersection point of technical analysis knowledge and psychology of the market is considered in this lesson.
Indicators: Indicators are calculative criteria that indicate trading opportunities based on analyzing statistical trends. Knowing some of them are useful like: Moving Average, the RSI, and the MACD.
Fibonacci Retracement Level is highly used in technical analysis to set a stop-loss level on price chart and define a potential level for price target.
Strategies and Risk Management: Tricks of the trade are here, handling the worst situations, taking the risk and changing the path of investment. You will read about: One per cent rule, Stop-loss points, and Expected
Pivot Points: Having the number of pivot points is a prerequisite for indicators. It specifically considers the high, low, opening and closing prices.
What is the best course for learning technical analysis?
You gain experience by either paying money, your body, or your time.
The best course should learn you not only the knowledge of technical analysis but also teach you how to use it in real price chart. This experience prevents further losses, heart attacks, or even your lifetime. We bring a list of technical analysis courses better than google, with this definition of best in mind.
- Academic Chart The only place you can read, learn and test your technical analysis knowledge at the same time. For all lessons, relative quizzes are designed on a real price chart and you have the chance to use what you have earned immediately. Gaining experience is an inseparable member of learning technical analysis. Academic Chart has provided this glue. The course includes basic and professional tips for entering market and tries its best to teach technical analysis in a pure, simple, and functional path. Take this chance and try it now!
- Investopedia It has something to say in every part of technical analysis definitions and basics. It's complete but not comprehensive. The experience part limps. But you can count it as one of the learning references.
- Trading View The giant price chart, has a community where you and any traders can share their ideas, predictions, analysis, and general trading tips. It has a live environment. You can follow the special authors on stocks, cryptocurrencies, forex, indices and futures, and many other technical fields. Put down comments and get a lot of feedback. There is self-educational content based on others' individual experiences. Looks good but not definitely reliable. Opinion is always an opinion and there is no guarantee that his prediction comes true, or his trading strategy, which works well, works for you too!
- Udemy One of the best courses in every field is undoubted, Udemy. About technical analysis, it has valuable courses via video and description. You should pay money and learn how to invest your money in the market. Some courses have been tested but more like ordinary high school exams. It focused on evaluation rather than providing the experience.
- YouTube Whenever look for learning, YouTube.com is blowing in your mind. It has courses and still growing. There are many things that someone has talked about and still many details that no one has uploaded a video for. YouTube is a complementary tool to others and because it doesn't have a lesson plan, your mind may fly during learning.
To Wrap Up...
Technical analysis provides multi-purpose tools to estimate the market's trend. It's so flexible that everyone can deploy it and stiff enough that rarely disappointed. Technical analysis helps traders to create meaning within the chart. The overall price history of the market is constructed for professional traders. For whose play with trendlines, distinguish patterns, apply Fibonacci levels, and don't stick to the old, rotten strategies. Sometimes it is necessary to change the time frame, alter the view and enhance your trading mentality. As the price change, you have to change!