Technical analysis is not an astrology for anticipating future price but it is an art of science to forecast future price based on the on past price movements. Technical analysis can be defined by analyzing present demand and supply of stocks, commodities, indices and futures etc. Technical analysis is helpful for investors or traders to predict the future price. Even technical analysis is unable to do exact prediction but it can navigate investors to anticipate what is likely to happen with the price in the future. One can use technical analysis to generate accurate Share Market Tips.
The price varies according to the demand or supply of the trade and the technical analysis works on the variation in the price. Technical analysis uses a wide variety of charts that show price over time and the price data refers to any combination of the open, close, volume, high and low interest for a given security over a specific time frame. The time frame can be based on minute, hour, daily, weekly or monthly price data.
Technical analysis put stock information like prices, volume and open interest on the charts and applies various patterns and indicators to it in order to assess the future price movements. Technical analysis concentrates on actual price movement. Technical analysis is one of those important factors of stock market which are very essential for traders in stock market. To avoid any trouble in the stock market, one must have the knowledge of technical analysis. It keeps us alert and aware us about fluctuation in the price.
Having information of technical analysis is very important for you if you are new in this market. If you are new comer in the stock market and you do not have knowledge about technical analysis then you may go in loss. So make sure you have a clear cut idea about technical analysis.
It is very important parameter to get success in Stock market. For understanding stock movements you will have to make a combination of four or more than five indicators because you cannot rely on only single indicator.
If you are a long time investor then the fundamental analysis would be best for you but you should not avoid the importance of technical analysis. In the beginning one may see strong trend in the future but if it may be technically weak then it will not beneficial for you. Make sure even though you are going to invest in long term stock but you are aware about technical analysis.
Importance of Technical analysis:
1. Technical analysis is universally applicable. It can be applied to any financial instrument like stock, commodities, securities and future etc.
2. It focuses on price according to supply and demand.
3. It has price chart and it offers most valuable information of price movement over a period of time.
Technical analysis is also used by experts to generate Share Market Tips.