Technical Analysis is a Must For Investors Who Want to Learn Stock Market Investing Techniques
Beginning investors who want to learn stock market investing techniques will gain a competitive edge by digging into the different types of technical analysis patterns and indicators. While technical analysis is never enough as on its own, it can certainly give investors an indication as to whether they should buy or sell stock.
Although there are literally hundreds of different technical analysis measurements, the three discussed here are among the most reliable formation that investors will cross. It makes the most sense to discover them as soon as possible when one starts to learn stock market investing techniques:
Head and Shoulders. Considered one of the most reliable technical indicators, this type of formation gives investors an extremely reliable indication as to where the stock is headed -- up or down -- over a specified period -- short, medium, and long-term. A head-and-shoulders formation has three sharp points. In a bottom formation, there are three low points with the second point (the head) being lower than the first and third points. This pattern gives a strong and reliable indication to buy the stock. As well, it is easy to spot, particularly for investors who are just starting to learn stock market investing techniques. In terms of volume, the first point (the left shoulder) will come with higher volume than the last point (the right shoulder).
Gaps. One of the easiest technical formations to spot, people who want to learn stock market investing techniques will automatically become drawn to gaps (up or down). Typically, gaps provide support or resistance to stock trends. Although trading on a gap up or down can become risky for people who are just starting to learn stock market investing, when a regular trend breaks through that previously formed gap, it is quite possibly a sign of a strong price movement.
Bollinger Bands. Used as a tool, Bollinger Bands are not stock price patterns. Instead, they are an oscillator, which tells investors about the probability of a stock trend. For people who want to learn stock market investing techniques, Bollinger Bands are a must. They give a buy or sell signal based on a stock's volatility as it moves two or three standard deviations from its mean. When the stock price closes at or above the upper band, it triggers a sell signal (vice versa for the lower band).
For people who want to learn more about stock market investing techniques, there is a wealth of information available on line, most of it at no cost. However, for more serious investors, stock trading software completes much of the work for you. In fact, many brokerages offer technical analysis resources for free with most accounts. - 23212
Although there are literally hundreds of different technical analysis measurements, the three discussed here are among the most reliable formation that investors will cross. It makes the most sense to discover them as soon as possible when one starts to learn stock market investing techniques:
Head and Shoulders. Considered one of the most reliable technical indicators, this type of formation gives investors an extremely reliable indication as to where the stock is headed -- up or down -- over a specified period -- short, medium, and long-term. A head-and-shoulders formation has three sharp points. In a bottom formation, there are three low points with the second point (the head) being lower than the first and third points. This pattern gives a strong and reliable indication to buy the stock. As well, it is easy to spot, particularly for investors who are just starting to learn stock market investing techniques. In terms of volume, the first point (the left shoulder) will come with higher volume than the last point (the right shoulder).
Gaps. One of the easiest technical formations to spot, people who want to learn stock market investing techniques will automatically become drawn to gaps (up or down). Typically, gaps provide support or resistance to stock trends. Although trading on a gap up or down can become risky for people who are just starting to learn stock market investing, when a regular trend breaks through that previously formed gap, it is quite possibly a sign of a strong price movement.
Bollinger Bands. Used as a tool, Bollinger Bands are not stock price patterns. Instead, they are an oscillator, which tells investors about the probability of a stock trend. For people who want to learn stock market investing techniques, Bollinger Bands are a must. They give a buy or sell signal based on a stock's volatility as it moves two or three standard deviations from its mean. When the stock price closes at or above the upper band, it triggers a sell signal (vice versa for the lower band).
For people who want to learn more about stock market investing techniques, there is a wealth of information available on line, most of it at no cost. However, for more serious investors, stock trading software completes much of the work for you. In fact, many brokerages offer technical analysis resources for free with most accounts. - 23212
About the Author:
Chris Blanchet spent over 16 years as a Financial Advisor at one of the largest banks in the world. For investors who want to learn stock market investing techniques, visit Online Trader Today.com. Chris also maintains a Debt-Free Blog at How To Repay Debt.com
posted by X - Men @ 2:36 AM
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