Saturday, April 2, 2011

Stock Market Technical Analysis-Charting Your Way To Success

By Eduard Ivakdalam

What causes the cost of a stock to go up, down, or sideways? Most of what occurs in the market is mental. The cost of a stock is set by the passion or conviction of all prospective purchasers and sellers. There should be a customer for each seller, and a seller for each consumer. It must balance out.

The cost of a stock will go up when purchasers are way more positive. This suggests the requirement for a stock, the orders to buy, is bigger than the supply, which is the orders to sell. When the opposite is correct the cost of a stock will go down. If customers and sellers have about equal conviction, the cost of a stock will stay pretty much the same. Understanding this idea is an excellent start in market technical research.

Chart reading, also known as technical research, provides us with a record of the battle between consumers and sellers. We may be able to visualize who is winning this battle by investigating price and volume action. This is often done on a short or long term basis. Some researchers also use over-bought and oversold signals as an element of their across-the-board research. I don't use these signals, because markets can definitely go down or up, much longer than, and much further than, what the majority believe is attainable.

Chart reading helps us establish the strength of demand vs the pressure of supply at diverse price levels. This gives us a smart idea of the likely direction a stock will move. When you know the probable price direction of a stock, you have risen your percentages of success significantly. Lucrative trading is all about chances and putting the chances in your favour.

In the market, history does repeat itself pretty often. This is due to human instinct, which never changes. Man's instinct with its feelings such as gluttony, fear, and hope, is what gives us re-occurring chart patterns. Learning to correctly research these patterns, with price and volume research, is the secret to success.

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