Technical analysis is the scientific evaluation of charts, technical indicators and other data related to an investment opportunity. Its purpose is to identify patterns and trends to more accurately project future price movement and timelines.
Around 85-90 percent of all stock transactions are completed via computer algorithms, which are programmed to execute trades based on predetermined price and timing parameters. This computer-fueled activity leaves clues as to pattern behavior, which savvy technical analysts pick up on and use to their advantage.
Why Traders Fail to Apply Technical Analysis
The vast majority of retail traders fail to apply technical analysis. In fact, many believe it is a “myth” or has no usefulness. This type of thinking feeds right into the hands of large institutions and hedge funds, which make money by moving against the retail trade. Technical analysis is your best opportunity to learn how these players operate so you can understand the money game.
You Can Learn to Do Technical Analysis
In other cases, regular investors recognize the significance of technical analysis, but are locked into a paradigm where they do not believe they have the capacity to do it. This belief is typically invalid.
You can learn how to do technical analysis. It does take time, and there are a lot of moving parts. However, think about technical analysis like a tool set. Every new tool you add to your set increases your capabilities for task completion and more effective project performance. Every new skill or competency you gain increases your scope and effectiveness in performing technical analysis.
The world of T.A. can seem overwhelming if you look at the list of charting tools and indicators available from your broker. Mine has hundreds of available technical indicators and studies, for instance. Many of these indicators can be grouped into a limited number of categories, though, and understanding 1-2 tools within a category is often enough to do technical analysis.
Learning to do technical analysis is much like completing any type of sequential program. There are building blocks. Learn the basics of T.A. and add to those skills over time.
Learn Technical Analysis
At this point, you are likely wondering how to begin learning technical analysis. Teaching traders technical analysis at all levels (beginning, intermediate, advanced) is a key purpose of Avant-Garde Investing. We operate as a collaborate community where traders access a plethora of content to equip them with not only conventional T.A. knowledge, but also more advanced and innovative methods. We also communicate and collaborate through chats and other social features to grow together.
Explore our community and get involved with a free, basic membership. Join our full community for a more interactive experience. Become a full member to learn technical analysis that matches your current skill level, and grow over time!
“Thanks to GG and his website, we as a group have benefited from some wonderful share opportunities and learned a thing or two about trading. However, Mr Market always has a surprise or two up his sleeve, and also hedgies’ and power players’ interference adds to our stress. I recently experienced a number of “Lessons Learned” which I thought might be useful to share with you.”–Comments shared in a Member Blog Post