Technical Stock Analysis: Learning How to Evaluate the Market

For stock traders, any edge is important to keep competition at bay. Technical stock analysis is one such tool that can be used by traders to keep ahead of the other brokers. Using all the instruments and charts available like price direction, trend lines, the peeks and valleys, support levels, the trader will be able to forecast market pattern. Basically if the market is up, you want to buy. When you find yourself at the other end of the spectrum, then you should look to sell. If the trend is moving sideways, you stay put.

In 12 minutes: Stocks Analysis with Pandas and Scikit-Learn | by Vincent  Tatan | Towards Data Science

Fundamental analysis or stocks technical analysis?

There are two principals used in stock trading. Fundamental analysis deals with real-time situation based on market data driven by supply and demand. Its Economics 101 essentially: when demand is up or supply is down, the price goes up. It all depends on the intrinsic value which will determines weather the market price is overvalued or undervalued.

Technical stock analysis, meanwhile, is interested the market action caused by price and volume. To simplify and sum up the difference among the two schools of thought, it’s a question of cause and affect. Fundamentalists are more focused on triggers price movement whiles advocates of technical analysis in stocks are put more emphasis on the outcome aktieanalys.

The foundation of stocks technical analysis

Proponents of this method based their assumptions on three tenets: that studying the movement of the price already covers all the other intangibles (like politics or strength of the currency, for example), so they are not overly concerned about all those external factors. Second, price trends do not exist in a vacuum. According to the principal of technical stock analysis, the market price actually follows a cyclical pattern. What happened before will happen again because of, strangely enough, human fallibility. By studying these patterns and trends, the trader can expect when the price will goes up or down and make the corresponding decision before anybody else does.

Is technical stocks analysis right for you?

As you may have realized, technical analysis requires a basic understanding of how stocks work, or advanced knowledge on mathematical or logarithmic calibrations. Online platforms on stocks and indices will only get you so much as the principal is anchored on human experience, knowledge and expertise. You need to find some sense between all those graphs and charts, identify reversal and continuation price patterns, the leading or lagging markers.

All these tools and principals are used to help you make three major choices: weather you go long (meaning you decide to buy); go short (or decide to sell); then finally do sit idle if the market moves sideward. By using the principal of stocks technical analysis, and using online platforms that track down market volume and price, you would be able to arrive at the best decision.