Technical Analysis Charting: A Single Point can be a Profit or Loss

If you have the chance to read the business section of a newspaper, probably you have noticed a line graph that represents the movement of different currency or stock prices for that particular day. If you will try to visit the same business section in the same newspaper, you will notice that the line graph is not the same graph that you have seen yesterday, indicating that there are movements within the market for that day.

Graphs, or called charts (in economic analysis) is a type of graphical representation of tabular numeric data or given functions. It is used to show large data quantities and its relationship between each other and its respective parts in a manner that will be easily understood by readers. In other words, the raw data that usually come into the form of large figures or tabular numeric numbers can be easily expressed in the form of charts.

Although it is used in a wide variety of applications (governance, health services, electricity generation and distribution, and others), charting is commonly used on the economic market, especially in conducting technical analysis. Technical analysis is used to determine the performance of a security within the market (be it a commodity, stock, or any foreign currency) by evaluating its price movement (both past and present) in the market. It also involves the analysis of a security’s volume and open interest in a particular trading day.

Technical analysis primarily involves the study of charts or past price actions (or the movement of a security’s price and volume on a particular trading day). Typically, charts that are used in technical analysis represent the performance of a security on a series of prices over a set of time frame. For instance, a particular chart may show the commodity’s price movement in over a half-year period, wherein each point in the graph corresponds to the closing price for the day the commodity is traded.

There are several things that you should be aware of when looking on charts that are used in technical analysis. These include the information entered to the charts such as the following:

->Time scale- it refers to the time frame that is commonly found on the bottom of the chart, which may differ from seconds to decades. The most commonly used time frames are daily, weekly, quarterly, and annually. Keep in mind that the longer the time frame (annually or by decade), the less the chart shows details. Every data point that you can see in the chart represents the closing price of the security or its low or high price, depending on the chart that you are looking into.

->Price scale- it is typically found on the right hand-side of the chart. It illustrates the security’s present price and compares it to the recorded data points. It can be either constructed in a linear (arithmetic) or logarithmic way.

There are three main types of charts used in technical analysis which is used by traders or investors depending on the information that they look for and their individual skill levels. These are as follows:

->Line chart- it represents the closing price of a particular security over a time frame. A line is formed by connecting data points (which represents the closing prices over a time frame).

->Bar chart- it illustrates the detailed information of line charts by adding several key data pieces to the data point. Such chart is composed of series of vertical lines that represents the low and high for each trading period, together with the closing price. The open and close are shown through the vertical lines with the horizontal dash.

->Candlestick chart- it resembles just like a bar chart, only that it is constructed in a visual manner. It has a thin vertical line that illustrates the trading range within the period. It makes use of different colors to explain the scenarios happened during that trading period.

Charting used in technical analysis is important-it can never be disregarded for every point, line, or bar represented in this chart means either profit or loss for traders and investors.

Technical Analysis Chart: Predicting the Market

You may be familiar with the stock market, the Forex market, the Futures market and other kinds of financial markets. You as an investor in these markets would definitely want to know first hand about the future of the financial security you are holding.

This is why there are technical analysis charts to guide you on your trades. You may have seen these charts on TV or in your computer, with all those lines zigzagging, bar graphs and candlestick graphs. You probably know that these charts are the actual movement of a particular financial instrument.

This is where investors try to analyze the price movement of a particular financial security.

Technical analysis is what investors do to predict the outcome of the market. They do this in order to help them decide what to do about a particular financial security. With this kind of tool, they will know what and when to buy or sell.

By far, the easiest to read are the line charts. This will give you a broad overview of the price movement of a particular stock. It will show you when prices rise and when it drops. Technical analysis is where you study the movement of prices and try to find a pattern in it. Once you find a pattern, you will then predict where it will go next, even if the price movement hasn’t happened yet.

However, line charts aren’t as much detailed as the bar chart and candlestick chart. In a bar chart, it will display the price spread during a specific time interval. It is easy to tell the lower lows from the higher highs because the left tab will display the opening price while the right tab will display the closing price.

Printed bar charts can be difficult to read, but there are programs that you can use where you can access real time bar charts and zoom in to know more about the different changes that occurs in the market. The computer version will give you a more detailed version than the printed bar chart version.

Another kind of chart is called the candlestick chart. This form of charting originated in Japan where it was used for analyzing candlestick contracts. This form of chart is very useful for Forex trading. With this chart, you can easily analyze movements of Forex prices. This type of chart is very much similar to bar charts. Both of these charts show the highs, the lows and the opening and closing price for the indicated time.

In order to read the price movement easily, the candlestick price is color coded. However, it will also color code the rising price as green and the falling price as red.

This will greatly aid your analysis and can be a great tool in predicting the market outcome.

In order to fully support your trading prediction, you should include other forms of technical indicators. Charts can be useful in their own but it is often hard to predict the price. You have to add other technical indicators to further inform you and accurately predict the outcome of the price.

Examples of technical indicators that can aid you in your chart reading are called strength indicators, trend indicators, cycle indicators and volatility indicators.

These indicators can greatly help in giving you an accurate prediction of the market outcome. Therefore, this will increase your chances of profiting and decreasing the risks of losing money.

Technical Analysis: The Forefront against the Volatile Stock Market

It is a standard operating procedure for a corporate organization to conduct an evaluation or analysis on the different aspects of their operation. Every now and then, the executives of a corporate organization must check the reliability and efficiency of their business plan towards various aspects of their operation and assess if there is a need to infuse new concepts on existing plans or change it completely to adapt with the present pace of business environment.

For instance, there are new state laws that have an adverse effect on the way you do business within the state’s jurisdiction. Therefore, there is a need to address potential problems that it may bring to the corporation as a whole. You can address such need by conducting an analysis of the corporation’s existing policies and probably infuse new concepts or apply new ideas to cope up with the effects of such state laws. You may also suggest that you change entirely the existing policies with new ones. Whatever decision you will arrive to, conducting an evaluation and analysis always plays an important role inside your corporate organization.

Such evaluation is known as fundamental analysis. In stock trading (in case the corporation sells its common shares to the public), it is a method of evaluating the performance of a security (in this case, the security referred to is the stocks) by examining the existing corporate policies and other quantitative and qualitative factors. It attempts to create a study about other factors within the walls of the corporate organization (such as cash flow, dividends, and others) that may affect the value of the stocks. In other words, it is an “internal study” of stock performance based on financial data of the corporation.

Another analysis that becomes increasingly popular among different corporate organizations over the past several years is technical analysis. It is a method of analyzing stocks through evaluating various statistical data produced by market activities, past and present prices, and trading volumes in the market. Technical analysts do not try to measure the stock’s intrinsic value (it is the established value based on internal financial data of a company, which is what fundamental analysis is into). Instead, they evaluate it through various stock charts for patterns and indicators that will help them determine the future performance of the stocks.

There are various indicators that analysts consider when performing a technical analysis on a certain stocks. These are, but not limited to, the following:

->Accumulation or distribution index- it is evaluated based on the closing of the stock prices within the trading day’s range.
->Average true range- it is the average daily trading range.
->Bollinger bands- it indicates the price volatility range.
->Momentum- it is the rate of any price change within a trading period.
->Money flow- it is the quantity of stock traded on various days, regardless of the price went up or down.
->Point and figure charts- these are charts that are based on prices without considering the time element.
->Stochastic oscillator- it indicates a close position within recent trading range.

Technical analysis is a thing that you should not miss especially if you have future plans of trading the common stocks of your company to various investors. It will help you win over the battle and not to lose until it ends.

An Introduction to Stock Technical Analysis


There are basically two types of analysis used in stock markets – the fundamental analysis and the technical analysis. In this article we will be dealing more with the technical analysis.
Companies that goes with technical analysis looks into charts for peaks, ups and downs, trends and other factors that can greatly affect a stock’s performance on the market.
Stock technical analysis is one of the most widely used form of influences in stock buying and selling, but contrary to this it is only a few of those people who are quite successful in using this analysis technique.
Stock technical analysis is more of an evaluation of the securities of a certain stocks based on the patterns and trends caused by the market activity.
Stock technical analysis does not determine nor quantify a security’s fundamental value; rather they look into the stocks patterned performance and from that derives a report or analysis about the stocks would be future performances.
So listed below are some of the materials and charts that are used by analysts to technically analyze a stock.
Charts are important in a stock analysis and one good example of a widely used chart is the Bar Chart. A bar chart is mainly made up of one vertical line which represents the highest and lowest price point of a stock and two horizontal lines which represents the opening and closing of a stock price.
The benefit of using a bar chart against a line chart is the entities available on bar chart. In a Bar chart you will be able to see the lowest price point of a stock and it’s highest and also you will be able to determine its opening price and closing price for a particular time span.
The next chart that is used in a stocks technical analysis is the candlestick charting. Candlestick charts has been around for years now and have originated from Japan that’s why they are commonly called as “Japanese candles”. Same with the bar chart the candlestick chart is also essential in a stocks technical analysis because it also shows the opening, closing, lowest and highest price points of a stock.
Another indicator and one of the easiest to understand in a stock’s technical analysis are the moving averages. It simply shows and predicts the outcome of a price point by dividing the sum of a calculated stock price over a certain time period. It shows the average of a price security over a span of time.
The most used moving averages are 20, 30, 50 and 100 sometimes 200 is also used. The process of calculating a moving average is by getting the sum of the prices in lets say a period of 20 days and dividing the answer into 20 parts.
Basically if a stock price moves below its moving average that would be a negative sign for a stock trader because that would mean that the stock price is moving on a bad path and may be on a downfall.
Technical analysis is one of the most widely used analysis for stock and this article serves just a small amount of information about it. There are hundreds and thousands of textbooks around which you can actually learn in depth stocks technical analysis.
But experience conquers them all, if ever you had fall down in stocks just move on and charge it to the experience, learn from it and continue to educate yourself about stocks this way you will be able to learn by your own means and develop strategies within your own unique terms.

Technical Analysis for Predicting Stock Movements

The stock market is one of the most popular financial markets available in the world. Because of the money making opportunities that stock market offers people, who wouldn’t want to trade in this financial market?

There are so many opportunities that can make your dream come true when you trade in the stock market. It is a fact that people who succeeded in the stock market became millionaires almost overnight. With this kind of opportunity, you would really want to invest in this kind of financial market.

Stock market is like buying a portion of a company expecting the value of the stock to rise. Once the company rises, you can sell it back and gain profit. In simpler terms, all you have to do is buy low and sell high.

This may sound simple enough, but the stock market is a very unpredictable market and many people have lost their investments by making the wrong decision. However, if you have tool that can help you with your decisions, such as a technical analysis chart, you can really make the right decision and minimize the risk of losing money and maximize the chances of profiting.

Technical analysis is the art of predicting the stock market’s future by means of studying the past events that happened in the chart. A chart may be a series of line charts, bar charts or candlestick charts.

By far, the line chart is the simplest chart to read. However, it doesn’t contain all the information that you will find in a bar chart and a candlestick chart.

Technical analysis, will definitely guide you in your stock trading. It will literally give you a glimpse of what may happen in the future with the stock you are holding. However, this kind of tool is considered more as an art instead of science. This is why many people are still skeptical in using this tool alone.

However, many people also consider technical analysis as one of the most important tools in the stock market. By comparing fundamental analysis and technical analysis, people may arrive to the right conclusion on where the market will likely go.

You should know that technical analysis, unlike fundamental analysis, doesn’t concern itself on the political and economical issues on why the stock moves. It is only concerned with the actual stock movement itself. This means that it uses the price trend in the charts to predict the future.

It relies on history to predict the future. It assumes that history will repeat itself. So, by studying how a particular stock moves, it can predict when the next move will be. It can tell you if the stock price will go up, down or will not have any significant movement.

By this prediction, it can really help you make your decision on what to do if the time came. You will be minimizing the risk of loss and really maximize the potential profit by just taking a look at technical analysis of stocks.

However, you should always remember that technical analysis isn’t always 100% accurate. This means that you should also make a study of your own about a particular stock in order to support the findings on technical analysis. You can also compare the fundamental analysis and the technical analysis in order for you to make sure with your decision.

The Science of Stock Market Technical Analysis

Without trade, there will be no progressive economy. One of the bases of a progressive economy is an active and continuous trade which facilitates the continuous flow of money around the market. As long as there is an existing trade between two individuals or entities, be it a commodity or other things that can be purchased or sell to generate profit, the flow of money around the market will go on and a progressive economy is within easy reach.

In addition, the existence of market further established a common ground for different trading activities. Apart from the physical structure or place of trade, the market is considered to be a systematic process allowing traders to ask and bid, thus helping sellers and bidders to interact and make various deals. It functions like a voting system wherein the candidates (the sellers) seek the support of voters (the buyers) by offering their platform of governance (their product and its market price).

One of the market systems that are very common among traders is the stock market (i.e. New York Stock Exchange). It is the market for company stock trading and its derivatives. For individuals outside the trading industry, stock is a term that is difficult to understand. Unlike other market system such as the foreign currency exchange market and commodities market wherein you can easily determine what is being traded (currency and commodities, respectively), stock creates confusion among non-traders and even to neophyte traders.

In finance, stock is the capital raised by a certain company or corporation. Such capital is accumulated through the issuance and release of shares to interested individuals or organizations. Like in acquiring a pair of foreign currency or a commodity for revenue, the acquisition of shares of a company’s stock allows you to partake in the revenues (based on the percentage of your share ownership) generated by that company.

However, the issuance and distribution of stocks in the market requires extensive study and evaluation. Like the currency or commodities wherein you need to take a position on a certain deal, there is a right time to distribute stocks in the market to raise more capital for the company. It is determined through a technical analysis.

Aside from determining the ideal time to distribute stocks on the market, technical analysis is also used to evaluate securities (the legal right that is awarded by the borrower to a creditor and often represented by a certificate such as shares of corporate stocks) by analyzing the statistics produced by the present market activities, volumes, and past market prices. It is done to forecast price trends in which the stocks could be sold for a profit.

Basically, technical analysis on the stock market is done through studying different charts of past price action. It includes variables such as the stock’s price, volume, and open interest (the total number of derivative contracts). In most cases, it only includes the analysis within the dimensions of the market and not the financial dimension of the company (such as dividends or cash flows). However, there are also companies who try to combine the fundamental (study of a company’s financial dimension) and technical analysis.

Even the accuracy of the results is disputed (since it is a predictive method that is based on price trend assumptions), technical analysis is one of the reliable tools that companies and stock traders can use for their quest of profitable capital raising and huge revenue generation, respectively.

Free Technical Analysis-It is just around the World Wide Web

Trading different securities (stocks, commodities, and currencies) does not always translate to huge profit at the end of each trading period. Due to several factors that affect the performance of a particular security in the market within a trading period (volatility of prices, less supply and great demand of a security or vice versa), there are times that you will lose some of your investment in a trade. There are also instances wherein your profit is less than what you have predicted at the start of the trade.

Most investors and traders are more particular with their profit and are always above on what they have invested on a trade. They always believe that trading securities will bring them not only huge profit but also the fame and glory within the trading society that they belong. Recognition of their individual achievements within the market can further boost their chances of generating more profits for their part-confidence of other investors and traders is just perfect for a bountiful trade at the end of the day.

However, achieving profit and glory at the same time is not as easy as you think. Just like a farmer working to grow his fields and yield to bountiful harvest, every investor and trader in the market must work hard to achieve huge profits at the end of the day. And just like a farmer that uses fertilizers and pesticides to produce a bountiful harvest later on, an investor or trader have also their own tools to determine their chances of winning in the game of trade.

And that is through technical analysis.

Technical analysis is the method of evaluating the performance of a security through different price movements within the market. This includes the comparison between past and present prices of a certain security, its volume during each trading period, its close and open, and other market-based factors. These factors will help investors and traders to determine the performance of different securities and what trading period will be the suitable one to close deals.

Technical analysis always comes in the investors or traders’ important expenditures, because there are statisticians and other experts that will deal on raw figures and statistics to establish the price movement in the manner that will be easily understood. The more sophisticated the analysis you want to make, the more the cost you will incur.

However, there are some who offers free technical analysis especially for neophyte investors and traders in the market. In the effort to make the early months of their trading career a success, there are websites that provides free technical analysis. In case you are one of these neophyte investors or traders, all you need to do is to fill up the online application form that asks for the following information:

->Your complete name;
->Home or business phone numbers;
->Your valid email address;
->The technical analysis system that you are interested in;
->The data provider that you are currently using;
->The decision support software that you want to use;
->The brokerage software that you are currently using;
->The type of Internet connection that you have;
->The type of security that you are trading with;
->The number of trades that you typically make on a weekly basis;
->The number of charts that you typically have open; and
->Additional comments that you want to make prior on applying for a free technical analysis for your investment.

After satisfying the aforementioned data, you will be able to request for a free technical analysis technology. You can now start your evaluation and make huge profits within the early months of your trading career!

Forex Market and Technical Analysis: A Great Tool for Trading in the Forex Market

Forex or Foreign Exchange market is considered as the most liquid and largest market in the world. This kind of trade is done with the use of money. A Forex trader exchanges foreign currency for another currency in order to make a profit.

Forex is a global market where trading never stops. It operates twenty four hours a day and five days a week and a lot of people trade in this kind of market because of the great money making potential.

It is known that people who traded in the Forex market were able to earn more than a million dollars a year. With this kind of potential earnings, who wouldn’t want to be a Forex trader.

If you have the skills in trading, knowledge about how Forex works, and have enough capital, trading in Forex can be the right choice for you.

As a trader, you may wonder what it would be like to have the skill to predict the Forex market future. This kind of skill would be like a dream come true for Forex traders and would really make them rich.

However, humans are humans and you know that you or anyone else doesn’t have the power to predict the future. But, there is a particular tool that you can use to somehow get a glimpse of the future of Forex markets. This kind of tool is called technical analysis.

Basically, there are two types of analysis that are used to predict the Forex market. One is called fundamental analysis and the other is called technical analysis. Unlike, fundamental analysis which focuses on economical and political factors to predict the Forex market’s future, technical analysis tends to concentrate more on the past information that happened in the Forex market to predict the future.

But, you may ask how can you predict the future by examining the past? The basic answer to this question is that technical analysis can predict the Forex market’s future by looking at the different trends that happened in the past. And, technical analysis always assumes that this trend will happen again.

This means that technical analysis isn’t concerned at all on why the market moves, it is concerned on the actual movement of the market. Analysts try to study the movement and try to make a speculation by basing it on past Forex market movements.
However, many people still considers technical analysis more of an art than science because there is no actual proof that technical analysis really works. But, traders are now also considering technical analysis as an important factor in the Forex market. They tend to refer to the analysis and support it by comparing it with the fundamental analysis.

If both types of analysis complimented each other, they can now arrive to a decision in what to do about the particular situation in the Forex market.

With technical analysis, you can be sure that you will have something to guide you in the Forex market.

Always remember that technical analysis isn’t always 100% accurate. It is merely speculations and you should investigate further before you arrive to a final decision.

If you do it right, you might and will really have a glimpse of the Forex market’s future.

Charting and Technical Analysis: A Great Tool for Your Trades

Predicting the financial market’s future may sound impossible. But, what if you have the power to predict it or what if you have the ability to take a quick look of the financial market’s future?

This would be like a dream come true for traders. With this skill, it will be next to impossible for you to lose your investment in the financial market. Whatever it is you are trading, knowing about the financial market’s future would be like knowing when and what to buy and sell. With this kind of skill, you can be sure that you can acquire a lot of profit from the financial market.

However, you know that this is impossible. You don’t have the powers to predict the future. But, one great tool that you can use can be the next best thing in predicting the financial market’s future. This tool is called technical analysis.

Technical analysis is the art of studying charts and finding a trend in the past to predict the financial market’s future. Try to think of it as forecasting the market’s “weather” and know about the potential risk and potential profit that you can make in the future.

This kind of forecasting can act as a guide to your money making decisions. It will also act as a safety buffer in case you made the wrong decision.

With this kind of tool, you can really minimize the risk of losing money and increase your potential profit from a financial security that you are holding.

You should always remember that a technical analyst isn’t interested about a particular company’s profile when they want a stock. They are only interested about the price movement and discovering trends.

They base their analysis on charts and computations. If they see a trend in price movement, the resistance level, and the volatility, they will speculate on where the stock will move next. It may be next year, it may be next month or it may even be in the next few hours.

The charts used in technical analysis can be a simple line chart, a bar chart and a candlestick chart. These charts are used to give the technical analyst the visual information and as well as the technical information in order for them to predict the financial market’s future.

With these charts, technical analysts can study a particular security and by basing on the past trends and past price changes, they claim that they will be able to predict the future of the financial market.

However, you should always remember that technical analysis isn’t always 100% accurate. It is even considered more of an art instead of an exact science. You should keep in mind that you shouldn’t depend too much on technical analysis. You should also do a study of your own. You can also trust that “gut feeling” you have whenever you trade.

Sometimes, that “gut feeling” can be right.

It is recommended however that technical analysis should be used as a guide to help you in your decisions in the financial market.

Try and study the findings first, review it, and determine what move you want to make in the market.

If you do it right, you probably can have a glimpse of the financial market’s future.

Why Should You Trade Online On Foreign Exchange?

Forex or Foreign Exchange trading these days has not only become a huge industry for online trade investors, but in fact, it is the largest market in the world. It is a very profitable arena to do trading, and huge companies are not the only ones given the advantage, but many independent individuals can now take on the market through the Internet.

Here are some major reasons why Foreign Exchange is a good market to do trades:

Low Costs For Investments

One very good thing about trading Forex online is that there are very minimal costs that a party has to undertake. Because there are no middlemen involved and one can easily do direct trades with the market responsible for the pricing of currencies, this means that there are no more commissions that you have to pay.

In Forex trading, there are no clearing fees, government fees or brokerage fees that you have to take care of because brokers in this market are compensated for their services through a bid-ask spread.

There are also very low costs for each transaction. And each bid or ask spread is usually only less than 0.1 percent when there are normal market conditions. For larger dealers, the least you can pay is only as low as .07 percent.

The Market Is Open For 24 Hours

Another factor why so many people find the Forex trade very convenient is the fact that it never sleeps. It is open for 24 hours a day from Sunday in the evening to Friday afternoon EST, and therefore people do not have to wait for the opening bell.

This can be very practical especially for those who only trade part-time because they can at least do business whenever they are free –in the morning, noon or at night.

High Leverage

In Forex trading, even a small margin deposit can be able to control a larger value for total contract. Through this leverage, the trader can make a lot of profit, while keeping minimal risks.

A good example for this is when brokers in the Foreign Exchange offer a 200 to 1 leverage, because with a 50-dollar margin deposit, a trader could buy or sell 10,000 dollars worth of currencies.

But take note that without proper risk management, there is a huge chance for you to experience significant losses along with gains.

High Liquidity

Due to the fact that the Forex industry is the largest market today and because so many parties have gotten involved in it, liquidity has become quite prevalent in this market.

It is very unlikely that you can ever get stuck in a Forex trade. Under normal market conditions, one can easily do trades at will with just a simple click of the mouse. And in fact, in Forex trading, you can have more freedom to automatically close your position when you have reached your aimed profit level just by setting your online trading platform.

There are many advantages in doing Foreign Exchange trades online. In many ways, it proves to be a very practical arena, but the promises for huge profits are never compromised.

There is no wonder why this market has become so popular and huge. And so, if you are interested in investing, with a little hard work and exposure, then the Forex market can surely be a good place to start investing.