Buy low, sell high. It seems so easy. But it isn’t.
Everyone who invests or trades in the stock market does so with the intention to make money. Unfortunately, most people don’t take the time and effort to understand all the different factors that can go into investing in a particular stock.
When it comes to investing, many believe that the price fluctuations of a particular stock are entirely random; after all, traders are human and unpredictable. While the daily moves a stock makes might look random, we at Learn-To-Trade.com warn that the fact of the matter is that stocks move in all kinds of measurable trends.
There are both clues and indicators investors should consider when they’re thinking about both buying and selling a stock. These are factors that can help improve their chance of finding a good entry and exit point.
When it comes to predicting the direction of a stock or commodity, investors follow two schools of thought: fundamental analysis and technical analysis. A fundamental analysis is focused on a company’s forward-looking picture. In this scenario, an investor looks at a company’s financial statements (quarterly reports) and press releases to predict a trend.
Investors who pursue a stock using technical analysis believe that chart patterns, past price performance, and volume can help predict what the future prices will be. The idea is to find patterns within the past movements and use those patterns to predict what will happen to the price.
By taking the right technical analysis courses in Toronto, investors can learn to read, decipher, and predict the price movement on stock charts.
What is Technical Analysis of Stocks?
For starters, it might be easier to say what those who follow the technical analysis of stocks don’t do. Technical analysts don’t concern themselves with fundamental indicators such as the price-to-earnings ratio, shareholder equity, the return on equity, press releases, quarterly results, or other factors that fundamental analysts do.
In many cases, those who study the technical analysis of stocks don’t even necessarily care what the company they’re investing in does. A technical analyst believes that the change in the price of a stock and daily volume is all you need to both determine the fair value and make a profit.
While a technical analyst understands there are times when a stock moves randomly (human actions and reactions do have an impact on the stock market after all), there are also times when a stock follows an identifiable trend. The technical analysis of a stock chart can help identify both an upward trend and a downward trend. The technical analysis of stocks can also identify both short- and long-term trends.
We believe that the art of technical analysis lies in being able to read the clues.
Taking a technical analysis course in Toronto, such as what we offer at Learn-To-Trade.com, is the best way to learn how to forecast so-called random price movements. Using technical analysis, you’ll learn not just how to read charts, but also how to recognize and understand little-known patterns that can open the window to profitable trades.
Instead of looking at a chart and just seeing a bearish or bullish pattern and hoping for the best, you’ll be able to recognize and act on continuation, reversal, and candlestick patterns.
If fundamental analysis was the single most important predictor of stock prices, investors would only ever have to pay attention to the markets when quarterly results are announced. However, stock prices fluctuate all the time. Taking a technical analysis course in Toronto from us at Learn-To-Trade.com will reveal and clarify all of the intricacies of stock technical analysis. Visit our web site or contact Learn-To-Trade.com to learn more!