Learn about Technical Analysis
The two common forms of stock analysis that are widely used are fundamental analysis and technical analysis. Fundamental analysis is probably the most common one, at least among beginners and buy and hold investors. Fundamental analysis includes reading financial statements, annual reports, what managers are doing, and analyzing financial ratios.
Fundamental analysis is a lot about researching the basics of the company and what it stands for. You want to understand its financial position, how much money it's making, it's plans for the future, and if there will be any growth and increase in value later on.
Those who use technical analysis often use it by itself, but sometimes they will use it in conjunction with fundamental analysis. Technical analysis is different because it uses charts to see where the stock prices have been to predict where they will be in the future. They don't look at the finances or executive decisions, they just look at the charts which is why they are often referred to as chartists.
Chartists look at the chart over whatever time span they choose, a month, day, hour, etc. They look at a line chart and examine what they line has done. They use techniques and ways to predict where the price will go next. Some of these techniques have been used successfully for years.
For example, they might look for what appears to be a head and shoulders. It goes up a little, they goes down to show the first shoulder. Then it goes up a lot to signify the head, and then forms another shoulder. They decide this is where it will go down and is a good time to sell.
Technical analysis has been used by many with success. It is most often used by stock traders. They can see what it is doing throughout the day by looking at charts. Traders buy and sell with in minutes, capitalizing on gains made within those minutes.
For long term investors, it might help to look at what is going on with the charts, but they should focus much more effort and more decisions on the fundamentals. The charts are not always correct, long term or short. Technical analysis is widely used and is worth looking into to at least see how it works. Read some books for more specifics and see if you can work with it. - 23212
Fundamental analysis is a lot about researching the basics of the company and what it stands for. You want to understand its financial position, how much money it's making, it's plans for the future, and if there will be any growth and increase in value later on.
Those who use technical analysis often use it by itself, but sometimes they will use it in conjunction with fundamental analysis. Technical analysis is different because it uses charts to see where the stock prices have been to predict where they will be in the future. They don't look at the finances or executive decisions, they just look at the charts which is why they are often referred to as chartists.
Chartists look at the chart over whatever time span they choose, a month, day, hour, etc. They look at a line chart and examine what they line has done. They use techniques and ways to predict where the price will go next. Some of these techniques have been used successfully for years.
For example, they might look for what appears to be a head and shoulders. It goes up a little, they goes down to show the first shoulder. Then it goes up a lot to signify the head, and then forms another shoulder. They decide this is where it will go down and is a good time to sell.
Technical analysis has been used by many with success. It is most often used by stock traders. They can see what it is doing throughout the day by looking at charts. Traders buy and sell with in minutes, capitalizing on gains made within those minutes.
For long term investors, it might help to look at what is going on with the charts, but they should focus much more effort and more decisions on the fundamentals. The charts are not always correct, long term or short. Technical analysis is widely used and is worth looking into to at least see how it works. Read some books for more specifics and see if you can work with it. - 23212
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It is worth it to learn the stock investing basics. You can begin stock buying on a great foot towards making money.
posted by X - Men @ 10:51 AM
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