Technical Analysis

First let's cover what technical analysis is. Technical analysis typically uses prices, time, and/or volume to determine market direction in order to trade. Technical analysis is what we use here at Stock Trading Review.

Technical analysis has grown tremendously in popularity over the years. Inexpensive and faster computers and internet connections have most certainly helped. Now even the smallest investor can find a wealth of stock trading information. on the net and through your broker.

There has been a long running debate as to which type of analysis is most effective, technical or fundamental. It's really a matter of which method works best for you. Think of it this way. Some people may prefer to run to stay in shape and others may prefer cycling. Done correctly both methods can be effective in getting you in shape. In this case it's a matter of which on suits you best.

Still I've heard technical analysis get a lot of bad press even though billions of dollars are being made by using it.

Please remember that technical analysis is like any other tool, it must be used properly to be effective. Let's look at an example. Imagine that there is someone who gets up every day and tries to eat tomato soup using a fork. It is likely they will starve! They might even tell you that the fork doesn't work. Now replace that fork with a spoon and they'll be very happy…until you offer them a steak! I simply said all of that to illustrate that any tool can be misused.

If you want to use technical analysis in your trading then learn as much as you can before you start trading. Remember, technical analysis can be your friend when you learn how to use it properly.

Kind Regards,

Tony Spann and the Team

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