| Most of the stock market beginners have no ideas | | | | it is assumed to be very true in the case of stock |
| as to how to pick a stock and they generally try to | | | | price movements. |
| use their gut feel to find a good stock or they | | | | There are various types of charts that are plotted in |
| generally ask for a friends recommendation. Read on | | | | the technical analysis of the stock price. These stock |
| to find out how technical analysis can help you and | | | | charts are the OHLC charts or also called the open |
| that in turn will mean that you will be able to pick | | | | high low close charts. Then there are the candlestick |
| stocks using the stock price. | | | | charts which are used by most professional technical |
| Technical analysis in simple words is the way in which | | | | analysts. Then there are the line charts which are |
| you can very easily use the statistical data and | | | | very commonly used. |
| statistical tools to predict the future price | | | | The trending of the price will form various trends and |
| movements of the stock using the past stock price | | | | these trends are named as head and shoulders, cup |
| movements. | | | | and handle, double tops and bottoms, triangles, |
| This is very different from the fundamental analysis | | | | rounding bottoms and triple tops. All these types |
| of the stock in the sense that it does rely on the | | | | indicate certain behaviors and technical analysts keep |
| value, growth or the income or even the expertise | | | | looking out for these formations to either buy or sell |
| of the management of company to predict the | | | | a particular stock. |
| future stock price of the company. | | | | There are a lot of software programs available in the |
| That said there are three main things on which the | | | | market which can be used to plot the technical |
| technical analysis generally works. The first one is the | | | | analysis charts. These programs can help you easily |
| assumption that the market price of a stock is | | | | research a large number of stocks in a matter of |
| always discounted. The other assumption is that in | | | | minutes. |
| the stock price movement you can always discover | | | | As a beginner you should always use the market |
| a trend. The third main assumption is that the market | | | | news coupled with the technical analysis to make an |
| movement can mirror what happened in the history, | | | | intelligent stock related decision. |
| essentially meaning that the history repeats itself and | | | | |