Technical Analysis

If you have been learning how to trade stocks or cryptocurrency then you have likely heard of technical analysis; this a term encompassing a variety of techniques that attempt to use price movement to predict future price possibilities. Most traders call it by its acronym T.A. this is like a framework used to make predictions on the future price movement of a chosen market.

Those who use this skill believe that current market variables show in the price action on a chart. So, if we believe that all market variables are reflected via price movement. Those who prefer T.A. like the idea that all variables are reflected in market price action, some use solely TA and others use it in conjunction with other strategies. It is good for any trader to learn TA because it helps teach you the fundamentals of creating an investment strategy.

You will need to find patterns in the price movement and learn to seize the opportunity when it arises. Over time it will help you develop a trading edge. The logic is that if most price action is driven by humans then certain patterns will appear and should repeat themselves because of the repetitive nature of human beings. A major asset is that you will learn to analyze the signals and structure of a market which will help you; identify the trends and understand the concepts of support and resistance levels. You will feel much more comfortable after generally learning to read the plethora of information on a market.

Always remember to use discretion because T.A. is far from an exact science, it is more like astrology that has an uncanny knack for being right but also has a nasty reputation of folks making a bad analysis. Regardless of its shortfalls, T.A. is often the foundation for many investors trading strategies. There are countless techniques to use within technical analysis and eventually we will get into the techniques to help you grasp the concepts and understand the markets.

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