For a stock trader/investor, the day begins with an important question – which stock should I buy today or sell and why? If one is able to find the correct solution to this question, he is a winner in the market. But stock market is such a wonderful place that it doesn’t allow anyone to be a permanent winner, or a permanent loser; it just allows a platform for you to trade. The intelligent trader constantly tries to update strategies to outsmart the swings in the market. Technical analysis is one such important strategy. It consists of three important units of estimating the future price of a stock. They are historical data, volumes and the current market price.
A financial consultant is like an expert driver who not only knows the art of driving, owns the legal requirement of a license, and aware of the function and utility of the important parts of the vehicle like, brakes, accelerator, and clutch etc. He knows the destination also. He is well-versed about the traffic rules. But what if he crosses the zebra line? What if he jumps the red light? He is bound to get the notice for recovery of fines. The traffic police will not spare him, just because he is an expert driver and owns the license. Similar is the disposition of the stock market. If you violate its rules knowingly or unknowingly, you will be punished.
In the stock market there are symbolic doors for entry and to exit. Armed with the technical analysis about a particular share, you have the precise idea to enter the market. As you enter, you have the exit strategy also ready, with the backup of stop loss instructions. You have the idea, supported by facts and figures, in which direction the market is likely to move. Self-study and the ability to take decisions on the basis of that knowledge is the best tool for an investor. Paid or free tips are of a general nature, offered by the brokers and the article writers to promote their own popularity and standing. Not that they should not be taken note of. But your knowledge about a particular company and its share should have the final say as for action of investment. For, it is your money which you invest for your future security and goals. So, equipped with the details of the technical analysis, take a decision what to buy and what not to buy for the day.
Profits are not only made when there is an upward swing in the market. Downward swings provide you with a better opportunity to earn profits, provided you have the technical analysis report of the company right in front of you. You study will reveal to you whether the time is bullish or bearish for the stock that you have in mind either to buy or to sell!
While applying you acquired skills relating technical analysis, take the volatility/”title=”how to challenge stock market fluctuations” >market conditions seriously, not your ambitions. As for updating your knowledge about the trade, develop the habit or reading a couple of class financial magazines like The Wall Street Journal’s Smart Money Magazine. Read limited, read exclusive and with a studied approach. An avalanche of stock literature is available, and no uses wasting time to scan all and the sundry. Focus on stocks that are positioned for rapid move, take a decision and stick to it, unless the market conditions change drastically.
Theory knowledge and the ability for practical application make the study of Technical
Analysis, worthwhile and profitable.