September 11, 2011 by akhilendra
Technical stock analysis
Technical stock analysis is a new way of looking at stocks and screening them to forecast their future movements. Technical stock analysis has been in the practice for quite a some time and it is extremely popular among short term traders. Short term investment require more information about the current status of a individual stock rather than deep analysis of its fundamentals.
Technical stock analysis focus more upon the recent change in individual stocks, buying/selling interest of the traders for that stock and strength of movements which stock had made in the recent past. It basically represent the psychological perception of that stock at that moment which is the most critical part of short term trading.
Technical stock analysis is like key to success in short term as well as long term investments. In today’s world when stock markets across the globes are extremely volatile and sensitive, it is imperative for a investor to have some hand on Technical stock analysis. Technical stock analysis helps in understanding the current mood of the investors and help a trader to determine if investors are going buy or sell that stock.
One of the most crucial part of the investment in shares is Timing. The entry and exit point in any stock determine the success of that trade. So, if a trader is buying or short selling a stock at a particular level without knowing its appropriate level to initiate that trade, it might jeopardize that entire trade even if trader went for correct stock.
Technical stock analysis helps in determining the correct level for trade in either directions. So, say if stock is trading at Rs 100 and it is going to rise in coming days to the range of Rs 130-140, someone entering at Rs 100-105 level would make more gains than someone entering at Rs 120-125. In fact, most of the stock correct after rising consistently to some level. So late entrant can even face loss.
So, it is better to understand the correct level and then enters. Technical stock analysis helps not only in rising market but it also helps trader in falling market. They are better equipped to ride highs and lows of the market. Traders who don’t understand technical stock analysis, only depend upon external tips and recommendations to trade in stock and eventually face more losses than gain.
Technical stock analysis require some dedication and time to learn it but it is definitively not some rocket science.So it’s better to learn it and go for short term trades rather than blindly following some stock expert just to loose money in market.
Technical stock analysis is key to success in current market conditions.
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