Technical Analysis: Complete Indepth Explanation for beginners

 Technical Analysis Definition

Technical Analysis is an art in which forecasting of price movements is done based on historical data i.e. price and volume. It is not an exact science where you can get result on an absolute basis but it is an art where everyone performs the analysis differently with the help of technical components like indicators, patterns, trendlines etc. on a chart.

Technical Analysis can be performed on any financial security like stocks, bonds, currencies, cryptocurrencies, commodities, futures, indices etc. If you have enough past price data of financial security, you can perform technical analysis on anything.

Golden nuggets

Technical Analysis needs past data to predict future movement.

It is an art, not an exact science.

It is easy to implement than the other form of analysis of Financial markets.

Basis of Technical Analysis

 Before the introduction of Technical Analysis, people used to forecast the future movement of price with the help of Fundamental Analysis. But in the late 1800s, Charles Dow introduced the "Dow theory" which formed the basis of Technical Analysis.

After the introduction of Dow theory, many developments were made in this field and the tons of new patterns and indicators were developed to ease the process of Technical Analysis.

Intrinsic assumptions for Technical Analysis

The core basis of Technical Analysis is that the price of financial security reflects all the necessary information impacting the market, so there is no need to look at the fundamentals of the company or financial security for forecasting its future movement. 

Whenever a stock moves, it forms some patterns and trends over time. Technical Analysts look at these patterns and trends to understand the market sentiment behind the stock movement without looking at the fundamentals of the stocks. 

1. History tends to repeat itself 

Technical Analysis assumes that the security will behave in the same way as it behaved in past if the conditions and pattern are the same. Financial markets are driven by the emotions of Human beings and human emotions remain the same in certain conditions of the market. So the historical patterns potentially will repeat themselves in the future.

So, the entire technical analysis studies are dependent on the history of a particular stock, commodity or any other financial security. 

2. The market discounts everything

Technical Analysts assume that fundamentals, market psychology, broader factors etc. are already discounted in the price, so there is no need to consider these factors for analysing the supply and demand of the security. They assume that When a big financial institution takes positions, they look at all the factors before investing, and when they take positions, it reflects in the price and volume of the security. So, Technical Analysts just analyze the price.

 3. Price moves in trends

It is believed in Technical Analysis that the price of financial security always moves in trend. There are mainly 3 types of trends :

1. Uptrend
2. Downtrend 
3. Sideways

The trend of a price is different on different timeframes. So before taking a position in the market, you must be clear about the timeframe in which you want to trade. A stock can show different trends in different timeframes at the same time.

There is a very popular saying in Stock market is "Trend is your friend". So, traders and investors just like to take positions in the market with the trend. 

In a nutshell 

1. History tends to repeat itself.

2. The market discounts everything.

 3. Price moves in trends.

Types of Technical Analysis

Technical Analysis is a very vast field in which there are so many areas to choose. There are various ways to analyze a financial chart in Technical Analysis. The most major types of Technical Analysis are given below:

 

Candlestick Technique

In this technique, a candlestick chart is used to analyse the market. It is the most common and widely used technique. There are various candlestick patterns available for analysing the market. Analysing solely based on this technique is also called Price action trading. They reveal the sentiment of the market better than the other techniques of Technical Analysis. 

 

Harmonic Trading Technique

In this form of Technical analysis, there is a usage of Fibonacci retracements and extensions. There are various patterns available here like Bat Pattern, Gartley pattern, shark pattern, crab pattern etc. This technique is the most objective in nature than the other techniques of technical analysis. They are a little bit hard to understand but as you get experienced,  it becomes easy. 

 

Dow theory technique

Dow theory is a form of Technical Analysis in which relation between Dow Jones Industrial Average(DJIA) and Dow Jones Transportation Average(DJTA) is studied. In this theory, it is believed that price action reflects all the available information about the market. 

Dow theory says that if one average from DJIA and DJTA has crossed its previous high and there is some actions in the other average in a reasonable amount of time, then the market is in an uptrend. 

 

Elliot Wave theory

The Elliot wave theory says that the market always moves in the form of waves and cycles. If the market moves along the underlying trend, its wave is called impulse wave and if the market moves against the underlying trend, its wave is called correction wave. 

An impulse wave is composed of 5 wave pattern and the corrective wave is composed of 3 wave pattern. A higher degree Elliot wave always consists of a lower degree Elliot wave. 

This technique is the most complex to understand. This is the most subjective technique of Technical Analysis. It takes lots of time and practice to understand the Elliot wave theory.

Technical Analysis Strategies

Technical Analysis is the study of charts using various chart patterns and indicators. If you trade using a single tool, it will be very tough for you to make a profit on a regular basis in the financial markets. When two or three tools and chart patterns are mixed together, then you will be able to trade with conviction in the stock market. 

A Technical Analysis strategy consists of various tools and patterns used in synergy. Technical Analysis strategy is also known as a Trading plan or a Trading System. If you don't trade using a trading plan and you just place random trades, you will not be able to make money in the stock market or any financial market. 

A good Trading plan consists of rules regarding every possible condition which will come during the trade. You should try to remove subjectivity from your Trading Plan to have clarity while handling a position in the market. If your mind is not clear about what to do next during a market position, it is very dangerous for your financial health. 

For example, the trading plan maybe - "If morning star candlestick pattern will be formed at the support level of the stock and the reading of Relative Strenght Index(RSI) is below 20, I will long the position." In this example, there are three parameters i.e. morning star candlestick pattern, support level and RSI. If they confluence together, you will make a long position.

A trading plan may any indicators or patterns you are comfortable with. You need to backtest the trading plan before using it in the live markets. Backtesting is the most essential part of the Technical Analysis for your long term gain.

The more objective is your trading plan, the better you will perform in the long term. If you follow your Trading plan with solid discipline, you will make fortune in the market. The more disciplined you are with your trading plan, the more ROI you will generate in the market. 

Getting started with Technical Analysis 

First of all, get the basic knowledge about the various technical tools. Our website has lots of free content where you get basic knowledge in a very easy to understand language. Once you have basic knowledge of various technical tools and technical terms, follow the steps which are given below:

Develop a verified Trading Plan

The first and the most important to understand is that you must have verified the profitable Trading Plan. Trading Plan is the set of objective rules about various conditions in the market. Verification of your Trading Plan is very necessary, you can verify that trading plan with backtesting. 

Choose Financial Securities to trade

There are thousands of financial securities to trade, but you should not choose above 10 for trading, otherwise, you will not be able to manage more than 10 securities. You should test your trading plan on the stock which you have chosen to trade with help the of historical data. The stock must be liquid to trade. The more liquidity a stock or financial security, the better your trading will perform. 

Show rock-solid Discipline

This is the most difficult part for a trader to follow. Since there is money involved in the market while we trade, so it tough for us to show proper discipline. Discipline is the thing that separates consistently profitable traders from the average or losing traders.

 

Stop for looking holy grail Trading system

Stock market or any other Financial market involves risk and there is no holy grail system available in the market. So you will face losses, accept this fact and try to think in terms of probabilities. If your trading plan is 50% accurate and your risk to reward ratio is above 1:2, you will make a lot of profit in the market.

Technical Analysis Vs Fundamental Analysis

There are two major ways to analyze the financial markets i.e. Technical Analysis and Fundamental Analysis. The ideology of these methods differ and oppose each other a lot. The experts of both fields argue that their method is better than the other.

 

 Fundamental Analysis

Fundamental Analysis is the oldest method of for the analysis of Financial markets. The greatest investor of the world, Warren Buffet invests in the stock market by using Fundamental Analysis. He is the richest investor in the world. 

Fundamental Analysis consists of analysing the intrinsic value of the company. Fundamental analysts study the economical conditions, financial conditions of the company, check all the balance sheets of Assets and Liabilities etc.  They also focus on the expenses and earnings of a company. 

Fundamental Analysis is mostly used for long term investment rather than short term trading. There is a lot of time and patience is required if you use Fundamental Analysis as your investing or trading method. 

 

Technical Analysis

The main principle of Technical Analysis is that all the fundamentals of financial security are discounted into the price of the security, So there is no need to pay high attention to the fundamental of the companies. 

Technical Analysis is based on the price movement and volume of financial security. Technical Analysts believe that History will repeat itself that means the price will behave the same in a certain condition as it behaved in the past.  

Technical Analysts basically analyse the stock with the help of indicators and price patterns on a price chart.  On the basis of chart patterns, they predict the future of the stock.

Technical Analysis works the same in every timeframe. You can use Technical analysis for the short term trading also like day trading. This is the best advantage of Technical analysis because you can't do day trading with Fundamental analysis. 

 How to use/apply Technical Analysis

The price of anything depends on its supply and demand. When Demand overcomes the supply, the price will increase and if the supply overcomes the demand, the price will decrease. According to the principle of Technical Analysis, the supply and demand are already discounted in the price. 

So Technical Analysts just read the price chart of the security. They predict the price movement by looking at the patterns and volume. There have been tons of patterns are developed by the experts to predict the price movement.

Technical Indicators are also used along with price patterns to solidify the entry in the market. There are many indicators you can use to identify various factors like momentum, relative strength, volume strength etc. 

You can also use trendlines and support/resistance levels to identify the trend. These are very useful elements to perform technical analysis.

Technical Analysis using multiple timeframes

Whenever a stock moves, it follows different trends on different timeframes. For example - A stock which is in an uptrend in the daily timeframe, it may be in a downtrend in the hourly timeframe and it may be in sideways trend in 5 minutes timeframe. You can take advantage of each timeframe if you learn technical Analysis in a good manner. 

It is very important for the Technical Analyst that he should check the trend of stock in every timeframe and then have a different plan to trade for each timeframe. Every trader must specify whether he wants to trade for the long term or short term.  

You must specify the timeframe which you want to trade according to your nature(whether you will be able to handle a position for a long term or short term). You must look for your risk appetite whether you will be able to invest for a long term or you are fine with short time trading. 

The stock which is in the uptrend in most of the timeframe is very good to buy because it will provide very less risk. The Stock which is in the downtrend in most of the timeframes is very good to sell. Whatever you may do, just provide a stop loss to protect your capital. It doesn't matter how good you have learnt any form of analysis, there is always a risk in every form of the financial market.

In Fundamental Analysis, you can only look for trade-in larger timeframes for the long term. But with the help of Technical Analysis, you can easily trade across multiple timeframes. This is one of the best aspects of Technical Analysis.

Technical Analysis as a tool for security selection

Many people don't believe that but it is true, you can use Technical Analysis as a tool for Security selection. There are some basic characteristics for a chart that if it follows these characteristics, he will select good stocks for trading or investing. 

For example: If the candlesticks of the chart have a big body and range on a consistent basis on hourly timeframe, it indicates that it is a very liquid stock to invest or to trade and the volume of the stock is also ideal for making big entries and exits. It also indicates that the principle of Technical Analysis will work on this stock.

If the candlesticks of the chart have most of the candle bodies short or flat and are very inconsistent in nature, it indicates that it is not a liquid stock, the principles of the Technical Analysis will not work as accurately on this stock. You can't make entries and exits on your desired price because there is not enough volume. 

In the above paragraphs, we gave the example of how we can use candlesticks to determine whether the stock is liquid or not and we also found whether the volume of stock is enough or not to trade or invest. There are so many indicators or tools in Technical Analysis which are used to determine the different aspects of a stock or any other financial instrument. 

The main thing to consider is that you have to properly understand all the basic concepts of Technical Analysis and after that, you have to practice them a lot with enough patience because it takes a good amount of time before you learn Technical Analysis.

 Major Organisations representing Technical Analysis

There are so many formal organisations which represent and regulate Technical Analysis across the globe and some of them represent Technical Analysis across their respective countries. Most of them are situated in the United States of America. Some of them are given below:

• International Federation of Technical Analysts(IFTA) - This organisation represents the Technical Analysis around the world. It is a federation which consists of many regional and national organisations. 

• Chartered Market Technician(CMT) Association - CMT Association is one of the major body for regulating Technical Analysis in United States of America. They also organise exams for selecting Technicians for the Technical Analysis. 

• American Association of Professional Technical Analysts(AAPTA) - This is also one of the major regulatory body of promoting Technical Analysis across the United States. There are many qualified Technical Analysts on the board of this regulatory.

• Technical Security Analysts Association of San Francisco(TSAASF) - This organisation is situated in San Francisco and it represents Technical Analysis at National level in the United States of America. There are many knowledgable people in their organisation. 

• Society of Technical Analysts(STA) - This is the first non-USA Technical Analysis organisation. It is situated in the United Kingdom. It provides diploma courses for Technical Analysis. STA is closely related to IFTA because it is one of their founding members. 

• Canadain Society of Technical Analysts(CSTA) -  It is one of the major organisation of providing knowledge of Technical Analysis around the world and It is the top organisation in Canada. It is a world-class organisation. 

• Australian Technical Analysts Associations(ATAA) - It is one of the leading organisation of Australia representing Technical Analysis in Australia. 

• Australian Professional Technical Analysts(APTA) -  This organisation also represents Technical Analysis in Australia.

 Best books for Technical Analysis

There are many books available for studying charts and Technical Analysis. You should most of them to gain advanced knowledge and to perform well in the stock market or any other financial market. Technical Analysis works on the chart of every financial market.

"Technical Analysis of the financial markets" by John Murphy is a very great book for learning technical analysis. If you are a beginner, you must read this awesome book.

"Japanese Candlestick Charting Techniques" by Steve Nison is a very essential book for learning candlestick patterns. It is a very quality book contain every minor detail about Japanese Candlestick Charting Techniques. 

"Encyclopedia of Chart Patterns" by  Thomas Bulkowski is an Encyclopedia of Chart patterns. This book contains every chart pattern and their success percentage. This book enables you to understand every chart pattern and take action on it. 

Technical Analysis Indicators

  The tools containing specific mathematical formulae based on historical data of financial securities are called Technical Indicators. These indicators are very important tools for Technical Analysis. You can make the best use of Technical Indicators if you have a very good plan of trading. 

The trading solely depends on Technical Indicators is very risky. Therefore, these indicators must be used with other components like chart patterns, candlestick patterns, support and resistance etc. You can't blindly trust them, you have to get good experience for using them. 

There are many popular indicators like Relative Strength Index(RSI), stochastics, moving averages, Bollinger Bands, Moving Average Convergence- Divergence(MACD) etc. You first have to learn about them and then you should use them in your trading.

 

Technical Analysis charts

In Technical Analysis, Entire analysis is done on the chart of financial security. There are many types of charts i.e. Line chart, Area Chart, Candlestick chart, Open high low close Bars(OHLC Chart), point and figure chart etc. These charts are available on the internet. 

In every type of chart, historical data of financial security is given. You need to do proper practise to get used to with the charts. Chart studying is very subjective, two different people can have different opinions on the same chart. 

Candlestick chart

Every type of chart is unique in itself. But the most commonly used charts are now Candlestick Charts. These are the most popular and easy to understand chart. They also tell the market psychology behind the movement of the price of Financial Security. Candlestick charts were invented in Japan a few hundred years ago. 

Strengths of Technical Analysis

Technical Analysis has many strengths. Some of which are given below:

 Same application in all fields

The Technical Analysis can be applied to any financial instrument like Stocks, Indices, Currencies, Cryptocurrencies, bonds etc. The principles of this analysis work in the same way in all the above financial instruments. So that you don't have to rely on fundamental data of any financial instrument, you just have to follow the price in the chart. 

Works on Short time frame

The principles of Techincal Analysis work in the same way in all timeframes of the financial instrument whether it is a 5-minute chart or 1-month chart.  You can apply the technical analysis in day trading also, while the fundamental analysis only works on higher time frames. 

Clarity of Exit and Entry

With the help of Technical Analysis, you can determine the entry and the exit position. There are various chart patterns and technical indicators which have rigid rules for making the entry and exit in the financial security. It removes a lot of confusion from the traders and there is a solid clarity among the traders. 

Lots of Opportunities to trade

In the technical chart of a stock, there is always a formation of a technical chart pattern. So there is a lot of opportunities for the traders to trade. In one chart does not show patterns or setups, you can trade the other stock or any other trading instrument. 

Historical information about the financial instrument

If you want to know the previous price movement of a particular stock, you can only get the historical price movement with the help of its technical chart only. Fundamental analysis will not be able to tell the history of its price movement because it is not necessary that if a company is performing well, then its stock price will definitely increase. Therefore, you can't rely on Fundamental analysis to get the historical price movement of a stock.

Weaknesses of Technical Analysis

Every coin as two phases so does technical analysis has. There are few limitations of Technical analysis which must be understood to trade well in the market.

 Contradicts Efficient Market Theory

There is a very popular theory, named Efficient Market Hypothesis according to which all the available information of financial security is reflected by the market price, so there is no way to predict the price movement of the stock based on historical data. It also says that price movement is random and you can't predict its future. EFH contradicts the theory of Technical Analysis totally. 

Game of Probabilities

Technical Analysis is all about probabilities and you have to know the probability and accuracy of a particular pattern before placing a trade. There must be a proper stop loss to protect you if the stock shows the opposite movement.

Subjective in nature

Technical Analysis is subjective in nature. Different traders can apply different techniques by looking at the same chart. There is some confusion in the beginners at the start, but as you get experienced, the confusion goes away.

You may lose substantial move

There are various patterns and various ways to identify the trend in the market. But until the trend is identified, a substantial movement of the stock is lost to capture. It takes a healthy amount of time to identify the trend. So, Technical Analysis is very late in identifying the trend.

Works on Liquid stocks

The more liquid the stock is, the better you can predict through Technical analysis. This analysis does not work on those stocks which are not liquid because liquid markets can not be manipulated while stocks that are not liquid can be manipulated very easily. It works best on the indices because they are very liquid. 

By the way, Fundamental analysis also doesn't work on the stocks which are not liquid.

 

Artificial price movements

Technical analysis can't predict splits, dividends and distribution. Therefore, this analysis can't be used in the presence of these artificial price movements. It is very cautious to use Technical Analysis on these events because no one can predict what is going in the mind of their owners.

 

No Extreme News

Extreme events like natural calamity, terrorist attacks, political drama, death of chief executives of the company etc. create havoc in the financial markets, hence technical analysis can't predict the price movement in these unexpected events. It is advisable to avoid trading in such kind of events where there is lots of disturbance. Nowadays, Donald Trump's tweets also create pressure in financial markets.

Is Technical Analysis Real?

Yes, Technical Analysis is a real, legit and trusted way to analyze the price movement of financial securities.  Many people just randomly take trades for few times and lose their money in the market and they spread bad rumours about Technical Analysis.

Technical Analysis is a skill which takes lots of time and practice to learn and apply. Many people don't show patience in learning Technical Analysis and fail in market and these very people say that Technical Analysis does not work.

Many people around the world wonder that how can someone predict the price movement of a financial security by just looking at the chart and even without analyzing fundamentals of the company. They think that it is impossible to predict the price movement with Technical Analysis and hence, they don't believe in Technical Analysis.

But there are many successful traders who make consistent profit with the help of Technical Analysis. Therefore, the bottom line is that Technical Analysis is 100% real. You just have to make a proper plan and you have to follow it with sheer discipline. Technical Analysis is not a holy grail, you have to understand the probabilities of trades.

Is Technical Analysis useful?

Yes, Technical Analysis is the most useful way of analysing the financial markets. If you have taken proper knowledge and proper training about this method, you will find it the most useful way of predicting the price movement of financial securities. 

The usefulness of this methodology depends on how you deal with it. The more practice of Technical Analysis you have done, the better your decisions will be.

 Just think that you don't have to deal with all the balance sheets, p/e ratios and all the fundamental stuff. You just have to analyse the chart of the security without bothering about all the noise of the market. There is no other method which is more easy to apply than the Technical Analysis.

Does Technical Analysis work in stocks?

Yes, Technical Analysis definitely works on the stocks. The accuracy of the Technical Analysis depends on the liquidity of the stock. The more liquid the stock is, the better will be its accuracy.

The stocks of Large-cap and mid-cap companies can be very efficiently analysed with the help of Technical Analysis.  You can also analyse the stocks of small-cap companies very efficiently.

But this methodology can't be used to analyze the Penny stocks and lower volume stocks. These stocks are often manipulated, therefore you can't predict the price movement of these stocks with this methodology.

Does Technical Analysis work in Crypto?

 Yes, Technical Analysis works on crypto as well, but not that accurately as it works in other financial instruments. The principles of Technical Analysis work on every financial instruments in the same way. 

This methodology doesn't work in Crypto that accurately as in other securities, because  cryptocurrency is very volatile in nature. Therefore it is very tough to identify the trend and price movement of cryptocurrency with this methodology.

It is advised to trade crypto like bitcoin, litecoin, ethereum etc. very cautious because they make large swings in the market and are very tough to handle for beginners. Their value fluctuates a lot as compared to other financial instruments.

It is very tough for any methodology to predict the price movement and trend of cryptocurrency. A good trader manages risk foremost, then he looks to make profit and cryptocurrency is a very risky thing to invest or trade.

Does Technical Analysis work in Forex?

Yes, the Forex market is the most liquid financial market in the world. It is the best place to apply the studies of Technical Analysis. There are so many currency pairs which are very liquid-like EURO/USD, AUD/USD and many more liquid pairs to apply this methodology.

The average daily turnover of the Forex Market is in trillions of dollars. These markets are open 24*7 during weekdays. The number of traders who trade with Technical Analysis in the Forex Market is more than that of the Fundamental Analysts.

The Forex Market is sideways in nature. This market is in sideways nature for 70% of the time. So the strategies which suit Sideways markets work better here than the trendy market strategies. You must test your strategies before trading live in the markets.

It is advised to handle a trading position very cautiously in the Forex market during major events because, in these events, the Forex market make wild moves which are tough to handle for new traders. Always keep a stop loss for the protection of your capital.

Does Technical Analysis work in commodities?

Understand one thing, anywhere people trade things, Technical Analysis work there and Commodity market is no different. 

Yes, Technical Analysis work in commodity market very efficiently. You can trade very well using Technical Analysis in the commodity market.

The reason Technical Analysis work very well in the commodity market because commodity market is very liquid and many people trade commodities around the world. The most liquid commodity of the commodity market is gold. The next most liquid commodity is silver.

You can also take a cue from different markets to trade. When the currency of a country goes up in price, the stock market of that country generally underperforms. All the markets are connected to each other and the major events affect all the markets. 

It is important to understand the probabilities of your strategy before placing trades in the commodity market and then trade according to your written trading plan. Otherwise, it will be very risky for your financial health.

Does Technical Analysis work in F&O Market?

The answer to these questions depends on how liquid the futures and options of a particular stock or index are trading. If it is the futures or option of a popular index or a stock, Yes Technical Analysis will work on that particular stock or Index.

But generally, most of the options of the stocks are not liquid, so Technical Analysis doesn't work on that. The reason is that there is less number of traders who trade the F&O market as compared who trade in cash. Therefore, the Options and futures are not as liquid as that of stocks. 

In Options of Securities, there is a time value also, if you predict the right direction of the stock, but the stock took so much time to reach there, you will not make money because the time value of  that stock's option will decrease. 

The charts of options and futures are contract-based, that means, if the month is expired, you have to see the chart of the other month. There is no continuity in the price of the options, so it is very difficult to apply the principle of Technical Analysis.

Why are more and more people shifting towards Technical Analysis nowadays?

Developed and Affordable Technology 

If we go 15 years back, many people didn't know that Technical Analysis even exist. Most of the people used Fundamental analysis for investing in financial markets. Everyone used to see the balance sheets, expenses, earnings, ratios etc. of various financial securities before investing in them. 

Most people didn't know about Techincal Analysis because the technology was not properly developed. To apply Technical Analysis, you need a computer or a mobile to do analysis on the charts. There were not the easy availability of smartphones and computers at cheap prices and there were no android phones at all.

Therefore, it was very difficult for a common people to afford these devices to apply Technical Analysis. This was one of the reasons why more and more people are shifting towards Technical Analysis nowadays. 

After the development of smartphones and due to the affordable prices of computers and laptops, the use of Technical Analysis was increased among the common people. Nowadays, most people have smartphones at least to analyse the charts of financial securities. 

Abundance of Charting Softwares

10 -15 years ago, the charting softwares were not easily available for the common people and lack of devices like smartphones and laptops made it even more difficult for the common people to access the charts of financial securities. 

Very less charting softwares were available then, and even at the very expensive prices. It was difficult for the common people to buy these softwares at higher prices. So very few people used Technical analysis for Financial securities.

Nowadays, many charting softwares and charting android applications have been made. Now, the free versions of these softwares are also available with all the necessary advanced features. The charting softwares now available are much more sophisticated and their interface is very easy to understand.

Since the prices of Internet data have also dropped drastically, the use of Technical analysis has increased exponentially. Hundreds of people are moving towards Technical analysis these days to cheap internet prices. 

Easy to understand and to implement

Technical Analysis is very easy to understand than the Fundamental Analysis. In Technical analysis, you just need to study the chart of financial securities without bothering about its fundamentals and market news. Because Technical Analysts believe that everything is discounted on the price, therefore you don't need to look at the other factors. 

Fundamental analysis is hard to understand and implement as compared to Technical Analysis. You need to go through the balance sheets of the financial securities and many more things. In Technical Analysis, you just need to look at different patterns, trends, indicators etc. to place trades. These things are very easy to understand and to implement. 

Nowadays, there is the easy availability of enough information on the internet about Technical Analysis. There are many websites and youtube channels which freely provide the basic knowledge of the Technical Analysis. You can learn any strategy and concept on the internet instantly. Our website, mastershareprice.com provides quality information about all the useful concepts, You will learn every important concept through our website. 

Conclusion

Technical Analysis is the study of the price movement of the various financial securities with the help of charts. There are various tools like trendlines, support, resistance, indicators, chart patterns, candlestick patterns etc. which you can use to analyse the financial markets. 

Technical analysts don't need to look at the fundamentals of the companies, because according to Technical analysis, the price of the company reflects all the information available. 

Technical Analysis works on liquid financial markets and it works on every financial market available to trade or invest. You need lots of practice to perform Technical Analysis in a professional way. The main thing to understand before trading or investing is the probability of various strategies taught in Technical analysis. Technical analysis is not a holy grail. You need to trade carefully to avoid huge losses in the market. 

There are so many technical strategies and tools available to trade but you shouldn't take random trades, otherwise, you will not be able to make consistent profits. A testable and verified plan is necessary to make profits in the market. You need to make a plan and you need to follow it with sheer discipline.