What is Technical Analysis?

Brief introduction to the concept of technical analysis

Why am I creating another Technical Analysis course when there 100s of FREE technical analysis?

• Other courses are too detailed and NOT practical enough for application.

• Other courses consume too much time.

• Other courses focus too much on indicators. They don’t cover what they are measuring and how does it all fit together.

Nature of this course:

• This course will give you the practical aspects of Technical Analysis(TA)

• Holistic view of TA or bird’s eye view of TA so that you can understand how TA fits with your overall strategy

• Will also cover detailed concepts that will explain how the things fit together.

Let’s start.

What is Technical Analysis?

Technical Analysis is a tool that is used 2 purposes.

Purpose #1: Visual Representation of the Market

Purpose #2: Predicting or Forecasting Tool

Visual Representation of the Market

Stock market is just like any other markets. The nature of any market is that

• there are buyers and sellers in the market and

• when are buyers/sellers there is Supply vs Demand

This market data can be visually represented in the form of charts.

This visual representation is 100% factual data (as-is) based on the transactions happening between the buyers and sellers.

When we say factual data, it means that everyone is looking at the same data. The reason why i’m saying this will be more clear when I explain purpose #2.

Predicting or Forecasting Tool

Second purpose of TA is that it is used as a predicting or forecasting tool. By visually representing the market data, TA can be used to make a prediction about the direction of the stock price movement as well as forecast the quantity of movement.

Just like a weather prediction/forecasting tool tries to predict when/where it will rain and forecast how much quantity of rain might pour down, TA uses the market data to predict the direction and quantity of price movement.

Here comes the most important nature of Predicting or Forecasting Systems.

Predicting or Forecasting systems are NEVER 100% accurate.