What is Technical Analysis?

The term "technical analysis" is a complicated sounding name for a very basic approach to investing. Simply put, technical analysis is the study of prices, with charts being the primary tool.

The roots of modern-day technical analysis stem from the Dow Theory, developed around 1900 by Charles Dow. Stemming either directly or indirectly from the Dow Theory, these roots include such principles as the trending nature of prices, prices discounting all known information, confirmation and divergence, volume mirroring changes in price, and support/resistance. And of course, the widely followed Dow Jones Industrial Average is a direct offspring of the Dow Theory.

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, past prices, and volume. Technical analysts do not attempt to measure a security's intrinsic value, instead they look for patterns and indicators on stock charts that will determine a stocks future performance.

Technical analysis has become popular over the past several years, as more and more people believe that the historical performance of a stock is a strong indication of future performance. The use of past performance should not come as a big surprise. People using fundamental analysis have always looked at the past performance by comparing fiscal data from previous quarters and years to determine future growth. The difference lies in the technical analyst's belief that securities move with very predictable trends and patterns. These trends continue until something happens to change the trend, and until this change occurs, price levels are predictable.

Technical analysis is applicable to stocks, indices, commodities, futures or any tradable instrument where the price is influenced by the forces of supply and demand. Price refers to any combination of the open, high, low or close for a given security over a specific timeframe. The time frame can be based on intraday (tick, 5-minute, 15-minute or hourly), daily, weekly or monthly price data and last a few hours or many years. In addition, some technical analysts include volume or open interest figures with their study of price action.

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Most people like to think of themselves as risk takers, but what they really want is a guaranteed outcome with some momentary suspense to make them feel as if the outcome had been in doubt. The momentary suspense adds the thrill factor necessary to keep our lives from getting too boring. - Mark Douglas

Traderji,
Can you explain me about the 5 min. , 10 min. , hourly charts & what significance do these have in day trading , short, medium or long term investment ? How to predict the movement of the stocks using the same ?
How to use the same with daily charts ? Please illustrate with example .

If you are really interested in Day Trading youu should get you self Stock Patterns for Day Trading by Barry Rudd

You can read the reviews on this book at: http://www.amazon.com/exec/obidos/tg...63119?v=glance

Hi

Can any body tell me which software is good for short term stock trading ???

Thanks in advance
Nagesh

What exactly do you want the software to do?

Hi to all,
I am new to intraday stock trading, plz guide me how can i make money through intraday trading? I have lost lots of my money in doing trading in random stocks so i m worried to invest more money same way, first i want to learn all the things related to intraday at NSE & only that i will invest more money as i want to make my money to grow, not to loose.

Regards,
Sumit

i think you need to go through this forum especially , software,fundamentals ,technical analysis and data feeds sections all threads...then you will come to know lot of things than what you need to know.

be patient and read ,know , practise then you try.all most all went through rough path ...just learn what is required...rest of the things will follow.

please know that ...there are plenty of things in this forum already written,so try to make use of those.

regards
suba

Thanks suba
i m interested in knowing that how to analyse any security technically & wot things should be kept in mind while doing trade intraday to make money?

Regards,
Sumit