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Friday, 14 August 2015

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An In-sight on Technical Analysis


For a person to trade effectively in the stock market or the commodity market, he must follow some strategy to trade so that he can follow a proper path to incur profits in the trade. Most of the people follow technical analysis for trading. Technical analysis is a whole field to determine or anticipate the future price movements. Technical analysis is based on the past data of price and volume to determine the future trends of the market. Technical analysis is not based on the real value of the stock or the commodity but depends on the past trends and movements of the stocks and commodities.

Technical analysis is based on the following assumptions:
1) The market describes everything in it.
2) The prices of the stocks moves in trend
3) The history will tend to repeat itself several times.

The Market Describes Everything In It:
The technical analysis does not consider the fundamental analysis to account for the price movements. It considers that the price movements accounts for everything and there is no need to consider the fundamentals and other economic factors while analyzing the price movements. 

The Prices Of The Stocks Moves In Trend:
In technical analysis it is assumed that the prices follow trends. That is they use to move in the trends. Thus if the stock or the commodity prices are moving in an uptrend there is a high probability that it will continue to do so. Similarly if the prices are in down trend they will continue to move down. In technical analysis it is always advised to trend with the trend and not against the trend.

The History Will Tend To Repeat Itself Several Times:
In technical analysis it is believed that the historical price movements will repeat itself. In other words the price movement behaviors will tend to repeat it. Thus in technical analysis the charts are studied and regular patterns which repeat themselves are identified. These patterns are expected to repeat themselves. These patterns are studied extensively in the technical analysis.

Thus technical analysis can be used to predict the stock or commodity price movements. Money Classic Research have experienced technical analysts who give accurate stock market tips and calls so that one can trade effectively and profitably.

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