𝐓𝐞𝐜𝐡𝐧𝐢𝐜𝐚𝐥 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬, 𝐰𝐡𝐚𝐭 𝐢𝐬 𝐢𝐭?
👉Technical Analysis is a research technique to identify trading opportunities in the market based on market participants’ actions. The actions of market participants can be visualized, utilizing a stock chart. Over time, patterns are formed within these charts, and each pattern conveys a certain message. The job of a technical analyst is to identify these patterns and develop a point of view.
👉Like any research technique, technical analysis stands on a bunch of assumptions. As a technical analysis practitioner, you need to trade the markets, keeping these assumptions in perspective. Of course, we will understand these assumptions in detail as we proceed along.
👉Also, at this point, it makes sense to throw some light on a matter concerning FA and TA. Often people get into an argument contending a particular research technique is a better approach to the market. However, in reality, there is no such thing as the best research approach. Every research method has its own merits and demerits. It would be futile to compare TA and FA to figure out which is a better approach.
👉Both techniques are different and not comparable. In fact, a prudent trader would spend time educating himself on both the techniques to identify great trading or investing opportunities.
