The importance of learning basic technical analysis before entering the stock market

This technical analysis offers an illustrated presentation of historical market data for your easy understanding and wise financial decision making.

India has been witnessing an increase in the global investment landscape in the last one year. With the growing number of people participating in trading and investing, there is a need to make people more aware of the tools they can use to make informed decisions. As the new age Indian investors lose barriers around trading, they need to know about their technical analysis as they embark on their investment journey.

Technical analysis

But what is technical analysis? Technical analysis is an attempt to understand market behavior by reading and analyzing charts. A chart pattern is a systematic presentation of historical information that enables traders and investors to predict future changes based on their understanding of past information. Before exploring further knowledge of technical analysis কিভাবে how, we need to make it clear that this is not gambling.

This is not gambling

The primary difference between gambling and technical analysis is that the latter is based on facts and figures whereas the former is entirely dependent on the individual’s gut feelings. Not only technical analysis based on information, this data also enables profitable business. A gambler makes his bets based on what he thinks is right and once he starts winning, they fall into the trap where their focus is on winning more money; So, if they are not lucky enough with their choice, they lose.

However, when it comes to trading with technical analysis, traders are not making decisions based on emotions. There is no place for emotional decisions. Based on the information, investors need to keep their money where the numbers indicate it. It is not based on the possibility of anything. While there are no disciplined gamblers, technical analysis makes traders disciplined.

Know your entry and exit points

Once you understand how technical analysis differs from gambling, learn when to buy and sell stocks at the right point. To be a successful trader, one must know the entry and exit levels because without proper entry, exit model no trading strategy can be created. Only with the help of technical analysis tools, indicators and time frames can one learn these important points well. This will enable them to create their own models and achieve maximum accuracy in trade. With the advancement of technology, today we have software that offers built-in strategies and models for trading. However, there are manual ways to read charts to find out the correct entry and exit points.

For example, market performance trends do not usually move in a straight line and have breaks and corrections before it gains momentum again. How do you identify an entry point here? Once you identify a stock, look for price pullback to enter a new business. Second, you can also use the trend line as a marker. If the price does not go out of line, then the trend is intact. Look for pullbacks, but if the price is kept it will be a good entry point.

Avoid risk

Once you get into trading, you need to find ways to avoid more risk than to make a profit. Although there is talk of taking risks in the capital market, it has changed in technical analysis. In addition to doing profitable business, you can also reduce the risk of your investment. The next step you need to take is to understand the psychology of traders. Technological analysis has moved beyond the momentum and volume indicators to tools that can measure the strength of market participants. All this together helps to avoid a risky situation.

The fast-paced world chart of the stock market carries the responsibility of gaining knowledge about the correct entry and exit points based on the pattern. This technical analysis offers an illustrated presentation of historical market data for your easy understanding and wise financial decision making. Nevertheless, it is highly recommended that technical analysis be used in conjunction with fundamental analysis.

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