Solving the puzzle 103 - Technical Analysis

You must be wondering that after 101 and 102, why did I suddenly started talking about the picture and the chart and the way to read it. There is a reason behind it.

What you see is what you believe...!

Thats why I wanted to show you the power of stock charts, the uniqueness and versatility of pictures to explain whats actually going on. Finally, here's the post on technical analysis. And I recommend you, to do technical analysis before you buy any stock in any exchange. In previous posts, I have continuously discouraged individual investors like you, to do fundamental and information analysis because you just can't do it. You will never have the time and expertise to do such analyses. Thus the only thing that comes under the purview of investors like you is - Technical analysis.

You must be wondering that I am pushing you towards doing some kind of technical and mathematical analysis, however I bet you, its neither technical nor mathematical. You don't need any degree or diploma in rocket science, to understand this. This is very simple study of stock price movements and it require disciplined efforts and patience to make sense of such movements. Let me list down what all you can do with the help of technical analysis.

1. analyze thousands of stocks in 5 mins using a stock screener
2. identify patterns in the selected stock charts (may be 10-20)
3. apply and study various technical indicators and find out which one works best
4. you don't have to forecast revenues and earning for the next quarter or year
5. you don't have to keep waiting for a breaking news to make a transaction
6. you'll be confident of your analysis and can do back-testing as well
7. you can do it at your home without spending time and money to collect data
8. you'll be much more confident while talking to your financial advisor
9. they say, one can never time the market, see the chart and tell me what do you think
10. last but not the least, you'll be the in-charge of your future - you'll be charting your own future

I'll talk about what is technical analysis and how to go about doing it, in my next post. Till then.

Good Bye, have a nice weekend