What is technical analysis ?
Its a mere representation the price where buyers ad sellers agreed and exchanged equity for money in a graphical form.
Why does this price go up or down ?
Sometimes the buyer feels he wants to buy at any cost, or he feels that he does not want to buy at any cost, similarly,
sometimes the seller wants to sell at any cost, or he feels that he does or want to sell at any cost.
This causes a difference between demand and supply and thats how prices go up and down.
What can we do about it ?
A person trading in the stock market needs to buy low (when the demand is low and/or the supply is more) and sell high(when the demand is high and/or the supply is less) to make monetary profits. With this money earned he can realize his dreams, whatever they may be.
Is it that simple ?
Yes very much. Its really that simple. We are the ones who make it complicated.
Wait a minute !! we make it complicated ? You must be kidding.
Absolutely, its us that make TA complicated. I can explain how:
Almost everyone knows what candlesticks, moving averages and RSI etc. etc. are.
Also everyone knows how to use them. Thanks to forums, mailing lists and those good Samaritans who took the pains of explaining strategies, entries and exits.
There are loads of books written on the subject of TA, and in depth studies about almost every tool thats available in any charting software.
How many books we have read ?
Maybe one or two ?
Can count on fingers..
Is it that easy ? Is the question we need to ask ourselves,
without reading books or gaining thorough knowledge on the subject,
we employ a capital and expect profits ?
and when that does not happen,
"Technical Analysis is bad", "Technical analysis doesnt work".
Only after some introspection one can find out where does the problem lie.
Regards