Technical Analysis and Technical Fundamentals
Technical analysis is the most popular type of analysis next to fundamental analysis. The latter is more complicated, e.g. in the case of a listed company, it contains information about the global, macroeconomic, regional and industry environment of the company, as well as reports published by the company. Technical analysis focuses only on the price movement and its past behavior. It is based on three main principles. The first is "the market discounts everything". The current market price takes into account all available information about a given security, the micro- and macroeconomic situation, and political and economic conditions.
It should also be remembered that the price moves in a trend - upward, downward or horizontal, until there are clear signals indicating a trend reversal. The aforementioned principle of history repeating itself states that technical analysis focuses on the repetition of certain patterns over time. For information on professional tools, see the Webinar Universe online training courses.
Learning Technical Analysis
When entering the trading market, it is worth using various sources to expand your knowledge. Certainly, at the beginning, the guides available on the Internet will be useful, discussing the basics of technical analysis along with the most important definitions. It is also worth using accessible dictionaries of terms. Online sources are the most convenient because they allow you to gain knowledge from anywhere, at any time. Additional support is provided by textbooks and readings in traditional paper form. It is worth using the knowledge of other experienced traders from your environment. One of the most effective tools for learning technical analysis remains various types of courses, training platforms or webinars.
E-learning courses can be delivered in real-time by professionals who pass on their knowledge, or they can be available to the user in a dashboard to go through at any time. Everyone must therefore choose the most accessible way of acquiring knowledge. At the same time, it is important to remember that reading dry information is not enough - knowledge must be constantly consolidated and put into practice. Experienced traders also need to expand it. Additionally, it is worth visiting Webinar Universe to analyze this topic in detail.
How technical analysis works
To estimate the right time to buy or sell using technical analysis, there are a few steps to follow. First of all, you need to determine your investment goal and choose the right assets, examine the data, read the chart correctly, find the right moment to take action, and possibly support yourself with fundamental analysis. Technical analysis is based on mathematical operations, which definitely speaks in its favor in the eyes of most investors. It doesn't need too much data and allows you to automate your trading, so it speeds up the decision-making process. It is based on clear and transparent graphs, which should not be a problem to read.
Regardless of whether we are talking about a line, bar or candlestick chart, it represents the transactions and behavior of investors, and thus allows you to see how the game of demand (buyers) and supply (sellers) played on a given instrument. It provides a lot of data on the basis of which various indicators are created. On the other hand, the disadvantages of technical analysis include, m.in, the possibility of triggering sudden market movements – especially when many investors draw similar conclusions and start making moves at the same time.
Can it be trusted?
There are many advantages of technical analysis. It is actually a time series analysis, which is why it is confirmed by mathematical operation, which indicates its effectiveness. It also ensures speed of decision-making, is self-sufficient and can be used in both short- and long-term strategies. It can be learned in many ways, which we report on at Webinar Universe. This is the simplest form of analysis for beginners. Combined with modern investment platforms, it allows you to automate trading. On the other hand, the disadvantages include a high level of subjectivity in the assessment of the market. Each trader can actually interpret patterns in different ways, and the price patterns are not clear. Technical analysis is talked about more as an art than a science. Some may find it difficult to match the indicators universally. Even a small change in the observation period can give significant decision-making differences.
In the case of technical analysis, there is also sometimes an impression of randomness and randomness. Still, it will be an excellent choice for people who appreciate proven tools that make trading easier. A well-conducted technical analysis can undoubtedly bring great financial benefits if the investor keeps in mind that it is still not a tool without flaws and can generate inaccurate signals. That is why it is so important to support yourself with comprehensive knowledge and experience gained during your adventure.
Technical analysis is a good method especially for beginners. Of course, it also has its drawbacks, but the key is to acquire the necessary knowledge in the field of market analysis. This will be facilitated by, m.in, online sources, such as portals, blogs, dictionaries, training platforms or webinars, as well as traditional ones – manuals and knowledge of experienced investors from the environment. Understanding the basics of technical analysis will make your investment decisions much easier.