| Inexperienced investors almost always say the same | | | | that the market's up and down movements are |
| thing about the stock market when they start | | | | actually indications of public interest in certain stocks, |
| trading for the first time: it's chaotic, intimidating, and | | | | as well as their relative stability and potential for |
| complicated. It's true that the stock market is | | | | profit. While fundamental analysts will spend much of |
| dynamic place, and prices are constantly moving in | | | | their time researching qualitative aspects of a |
| cycles of growth and decline at any given moment. | | | | security, like company history, financial stability, and |
| Although these cycles can be disconcerting for some, | | | | public demand, the technical analyst believes that |
| it's important for new investors to become | | | | these things have all been accounted for and |
| comfortable with them, because they are not only | | | | displayed in the market price. This allows the technical |
| natural, they are necessary if you ever want to have | | | | analyst to concentrate only on price patterns for |
| an opportunity to make money on the market. One | | | | their research. |
| of the best ways to learn to use these fluctuations | | | | On your journey to learn technical analysis, it's |
| to your advantage is to learn technical analysis. | | | | important that you start by exploring the three main |
| If you've never thought about how important it is to | | | | assumptions that guide its practice. Once you |
| learn technical analysis before, you should consider | | | | understand these basic principles, you'll have a much |
| how useful it would be to have the ability to see into | | | | better appreciation for why the technical analyst |
| the future. Many investors will tell you how much | | | | trades in the way that he does. First, technical |
| they wish they could just go back in time to take | | | | analysts believe that the market adjusts for outside |
| back that one misinformed trade, or to buy up ten | | | | influence (as stated above). Second, the technical |
| times as many shares of a stock that was about to | | | | analyst believes that the market prefers to move in |
| blow up. Instead of wishing you could rewind the | | | | trends, and will continue to do so, as long as nothing |
| past, why not use a method that's proven to make | | | | moves to interrupt it. Third, the technical analyst |
| it possible to use stock market data to make | | | | believes that history is destined to repeat itself, |
| educated predictions about the future? | | | | meaning that patterns spotted in the past can be |
| When you learn technical analysis, you'll begin to see | | | | used to help predict the future. |