You want to invest in stocks, but you don’t know how to analyze them.
Investors and traders use technical analysis, which is a strong tool, to predict how the price of a stock will move in the future.
In this blog, we will talk about what technical analysis is, how to do technical analysis of stocks, how to learn technical analysis, some of the best technical analysis patterns, and the difference between fundamental analysis and technical analysis.
What is Technical Analysis with Example?
Technical analysis looks at past market data to find patterns and trends that can be used to predict how prices will move in the future. For example, if the price of a stock has been slowly going up over the past few months, technical analysts might confirm whether the price will keep going up in the future.
Traders use candlestick chart patterns and technical indicators to find tradeable patterns and trends when they do technical analysis. These charts and indicators can help buyers and sellers decide which stocks to buy or sell based on accurate information.
How to Do Technical Analysis of Stocks
It could be a very complex process, but I have broken it down into some very simple steps.
Here are the steps for analyzing stocks using trend analysis:
Get the Stock Data: The first thing you need to do is get the stock data for the stock you want to buy. This means you just have to open Reliance’s chart if you want to buy Reliance as shown below
Choose a time frame: Once you have your technical chart, as shown below, you need to choose a time frame for your study. Depending on how you sell or buy, this could be anywhere from a few days to several years.
Find trends: The next step is to find trends in the stock’s price and volume over the time frame you picked. Look for trends like highs that go up and lows that go down (an uptrend) or lows that go up and highs that go down (a downtrend). You can see the market is moving upside means its uptrend in Reliance
Use Indicators: You can use indicators like moving averages, the Relative Strength Index (RSI), and Bollinger Bands to help you find trends and confirm your research. These signs can help you figure out when a trend is overbought or oversold and when it might change.
How to Read Candlestick Charts: Lastly, you need to figure out how to read the charts to decide whether to sell or buy. For example, if the stock is rising and the RSI is above 70, indicating overbought conditions, you may wish to sell or wait for the trend to change.
How Can I Learn Technical Analysis?
If you want to learn about technical analysis, here are a few options to look at:
Books: There are many books about technical analysis, such as “Stock Market For The Common Man” by Sandeep and “Japanese Candlestick Charting Techniques” by Steve Nison.Online classes: There are also several best stock market classes where you can enroll for online classes. For example, Stock Venture, Udemy, Coursera, and Investopedia all offer them.
Trading Platforms: Many trading platforms, like Tradingview, have tools and tutorials for learning about technical analysis.
Trading Communities: If you want to learn from other traders and investors, you can join trading communities and sites like TradingView and StockCharts.
Recommendation: If you want to learn how to trade on the stock market, come to our technical analysis course. The course will help a complete beginner who wants to start making decisions and guessing price movements. It will also help a beginner investor who knows about technical charts but wants to learn more about investing.
