We saw in the previous blog how Technical Analysis got started and also saw the history of JAPANESE CANDLESTIC. Investors who have not read the first part of Technical Analysis should read it later.
In Technical Analysis, Charts are used to analysis the Past Moment of Price and Volume and with their help demand and supply of those shares. Technical Analysis is used to predict shares in short term. Let us see what technical analysis is.
When there is an exam like Board Exam, Graduation exam etc. So many students collect and analysis the question papers of the last few years. If any question is asked consecutively for the last four years, then the students study the question very well because they thought that if the question has been asked continuously for the last four years, then the same question will be asked this year. Most of the students study the previous question papers in the same way and sometimes these questions are asked again but sometimes these questions are not asked again and such questions are asked that have never been asked before. This technique is the foundation of Technical Analysis in the stock market. Technical Analysis assumes that history comes up again and again. What has happened happens again and this is the limit of Technical Analysis. Because we know that “Change is the Law of the Universe”. Sometimes history does not happen again.
Emotions from investors and traders also affect the market. Technical Analysis is used to measure the irrational of the market. Technical Analysis looks at only two things. Price and volume are both numbers, so we can say that “Technical Analysis is all about number”. In Technical Analysis, price and volume are analysis using charts.
In the next blog, we will look at the types of charts and gradually learn more about them.
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