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Is Technical Analysis really useful for trading?

Many of the market participants or market aspirants would have come across this question ‘Is technical analysis really useful for trading?’. All traders enters the market with only one objective ‘Money’. How to make money with the invested capital and remain in the market for long term? This is the million dollar question arises for each and every novice traders.

It is evident that the analysis makes an important part in investing and making profits. Majorly, there are two types of analysis a trader or investor can carry out. Fundamental analysis and Technical analysis. Fundamental analysis is analyzing the financial and non financial aspects of the company/instrument through press releases, financial statements and other information available. Technical analysis is purely based on the historical price movements and trading behaviors.

Technical Analysis

How Technical Analysis works?

As defined, Technical analysis is formed, evolved and performed based on only one principle ‘History tends to repeat itself’. This means the price movements, patterns, support, resistance zones and other technical parameters formed in the past will behave in the same way in future. Having knowledge on this makes an investor or a trader to better perform the market with a torch head instead of getting lost in the dark.

There are in-numerous technical analysis developments are done and practiced over the years. Analysis methods which makes the best fit and goes in liaison with your trading strategy can be chosen and you can further delve in to in-depth study. It is not important to know about many number of technical charts and indicators, it is useful when you learn few but without any flaws. Yes, technical analysis is really useful to take decisions and make desirable profits. But in trading, application knowledge is much more important than the study. So, once you are comfortable with the learning of Technical analysis, you can start to practice it in your portfolio or at least you can try it by paper trading which won’t cut down your hands in terms of monetary losses.

Though many traders are doing Fundamental Analysis, Technical Analysis plays a vital role in making the best profit out of your trading efforts. Simply we can say, Fundamental Analysis may help you finding what to buy/sell, but technical analysis tells you when to buy/sell, thus you won’t miss the golden opportunity by standing on the sideways or transacting at wrong entry/exit point.

How can I learn Technical Analysis in India?

There are many knowledge sources and materials available. For the basic learning of Technical Analysis, it is advised to take NSE Academy Technical Analyst certification program which gives you the required basic knowledge with interesting examples. It deals with all the fundamental concepts such as charts, candlesticks patterns, Head and Shoulder patterns, Double top and Double bottom patterns etc. You will also know about important indicators and oscillators used for the analysis. In addition to that, it gives you a glimpse of day trading strategies and risk management tips for successful trading. It is an intermediate exam module introduced by NSE Academy (NCFM) which solely created for the purpose of knowledge acquiring in the field of technical analysis.

You can check the exam details in this link: https://www.nseindia.com/education/content/module_ncfm.htm

On successfully passing the aforementioned exam, you will also get a certificate from NSE Academy. Market players who are really interested in Technical Analysis and willing to possess a certificate in Technical Analysis at affordable cost shouldn’t miss this exam. So, let the learning curve rise and our profit too!!

Disclaimer – All information posted in this website is for Educational purpose only

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