The Many Aspects of Technical Analysis
There are so many aspect to technical analysis(TA) that it can be very overwhelming and intimidating to anybody that is new to investing. With hundreds of different technical indicators and strategies it can be difficult to decide where to start learning technical analysis.
The most important aspects of technical analysis are actually the most basic fundamentals of TA. They are the first thing you should learn in TA. Price action, volume, and the overall trend are the most important things in the field of technical analysis. Most technical indicators and strategies are derived from these three fundamental aspects of technical analysis. Once you master these aspects of TA then you will be able to map out stock charts with my favorite tool for technical analysis, the line drawing tool.
The line drawing tool, when properly utilized, helps me determine major areas of support or resistance. The drawing tool can clearly illustrate the short-term and long-term trends or direction of the price action. Essentially the line drawing tool makes it easy for a swing trader to trade the ups and downs in the market.
How can you learn to use the line drawing tool properly?
First you must learn how to read candlesticks. Candlesticks illustrate the price action for the day, week, or whatever time frame you decide to analyze. Candlesticks tell you where the buying or selling starts and stops. Candlesticks are also used for determining technical trend lines or areas of support and resistance.
Most importantly, the size of the candlesticks can give you insight into market sentiment. For example, was the market indecisive, was the buying or selling very strong, did the buying or selling last all day? These are all questions that candlesticks will answer.
The volume of the price action is another very important aspect of TA. When analyzing charts, volume can be used to confirm or deny a trend. It can also be used to determine when an uptrend or a downtrend is gaining strength or running out of steam. When you see rising volume during a clear directional trend then the trend has strength. Falling volume can signify a weak trend or a trend that is susceptible to a possible change in direction.
After mastering these two simple yet fundamental aspects of TA then you will be able to determine the overall trend on any time frame. Once you can determine the trend then you can utilize the line drawing tool properly to find the areas of support and resistance for very profitable swing trading.
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Trade the trends via technical, fundamental, and macro analysis. Day Trades, swing trades, and long-term investments.
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ZnWC : Thanks for the sharing![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Liu Yongshu ZnWC : Go for it, get the knowledge you want every time you share
KwanSook : Fibo for price predictions...
CashCowMoo486 : Thanks for sharing![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
SpyderCall OP ZnWC : most definitely. im glad to share. normally i post more content. but lately i have been really busy with, well you know, life stuff![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
SpyderCall OP ZnWC :
SpyderCall OP KwanSook : I always keep the long term Fib levels on my charts. They can hit over and over going years out
SpyderCall OP CashCowMoo486 : For sure![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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