Stock market guide: What is technical analysis and why is it important? - Explained
Technical analysis can be a useful tool for understanding market trends and predicting future price of an index or stock. Here is a guide on how you can use it for personal investment:
Technical analysis is a method used in the stock market to predict future price movements based on historical data. Traders use charts to spot trends and patterns in prices. There are three types of trends: uptrend (prices go up), downtrend (prices go down), and sideways (prices move within a range). Technical indicators and chart patterns help traders make decisions. Support and resistance levels show potential price reversals. Fibonacci retracement uses specific ratios to find support and resistance. Harmonic patterns seek to identify reversal points based on geometric patterns. Remember, while technical analysis can be helpful, it can't predict prices with certainty, so use risk management strategies.
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