Technical Analysis

Technical Analysis
Simply stated, Technical Analysis is the prediction of future price movements based upon the study of past market data. This category of my blog will concentrate on the most profitable technical indicators available, and those most often used to find the best buy and sell points.

Technical Analysis versus Fundamental Analysis
Fundamental analysts make their selections based upon a company’s financial statements, its health, or its management team. Technical analysts do not concentrate on this data because they believe all of this information is already reflected in the stock price. Therefore, the only remaining action needed is technical analysis to predict trend changes and provide opportunities to get in at the optimum buy and sell points. This works for stocks, futures, indexes, or individual sectors. It works extremely well for day-traders and swing-traders, but is equally accurate for long term positions.

The argument supporting technical analysis has grown in popularity over the years. It is now widely used among professionals and individual investors. It fills the need for quick and easy analysis of the financial markets. Thanks to the internet era, it is easier than ever to automate this analysis process. Most every brokerage platform and trading program provides an abundance of chart customization to easily select your indicators.

For example, a moving average is widely used in this type of analysis. Lay out two moving averages with different time periods and you have a buy or sell signal when they cross. Or, view multiple moving averages to identify trends, support or resistance, and price channels. This is a simplistic explanation, which we will go into greater detail on our article on moving averages.

Our motto is “Keep it simple – Keep it Mechanical.” When trading, it is difficult to keep our emotions in check but when utilizing the signals I find through my own technical analysis I am able to identify and execute many successful trades. It has allowed me to quit my day job and trade full time for a living.  All of this is based upon nothing more than past history and investor sentiment. This is why I personally combine Japanese Candlesticks and Technical Analysis to trade for profit.

Follow my Daily Market View and see for yourself! Also, read the articles posted under the Japanese Candlesticks category provided weekly to identify chart patterns utilized when performing candlestick analysis. Patterns such as the doji candlestick chart, the bullish engulfing pattern, the bearish engulfing pattern and the candlestick piercing pattern are explained in simple terms for novice investors to understand. In addition to identifying these patterns, the articles also explain what each pattern indicates is happening in the markets. Chart patterns such as the candlestick hammer signal, the inverted hammer candlestick, hanging man candle, and the dark cloud cover are also explained in recent entries. Through expansion of your Japanese Candlesticks education and your technical analysis education, you are on your way to successful investing!

Please continue your technical analysis education and read about the moving average indicator.