Thursday, February 17, 2011

Why technical analysis creates equality

Krishna said;
Is it really necessary to have chart reading skills to handle equity mkt ?
How come peoples used to execute successful trades when charting; technical analysis; computers; internet; data itself was not available so easily.

My notes

If you are buying in a downtrending market then it will give you a loss. Trying to sell in a rising market is also a recipe for losses. Charts help you to find a trend of the market and also the price pattern of the stocks. Chart reading skills provide you an opportunity to find the current trend of the market which help you to maximize your profit and minimize your loss.

The concept behind technical analysis is - people react in similar manner to similar situations, thus history repeats itself. Earlier, traders used the concept of trend instinctively, without the availability of charts. But the concepts were still there. For the past 120 years, charts have been widely used, therefore the task of technical analysis has become easier. There was a time when access to data and markets were restricted to the priveleged few. Now, computers, internet have made these methods and markets easily accessible to each and every trader. This has created a level playing field for the first time for the masses.

2 comments:

rocky said...

hi sir you are disappear from cnbc where are you these days.... and sir whats your opinion on nifty from here till expiry of feb. and can we long from march onwards??

Shazia said...

hi Sir,
i was wondering about this ..
There was a time when access to data and markets were restricted to the priveleged few. Now, computers, internet have made these methods and markets easily accessible to each and every trader. This has created a level playing field for the first time for the masses.
So now if everyone played according to the charts and levels, wouldnt it now alter the change in the pattern of trading? Or would it make TA more efficient?
Thanks