The stock market is a very volatile place. It is full of uncertainties. The market can grow upwards or even crash, causing huge losses. These are an integral part of everyday market life. But as an investor, you need to know what to expect from the market and for that you need to be in regular contact with your investment advisor.
Investment advice presents regular analysis for the benefit of its investors so that they can plan their stock purchase/sale accordingly.
There are two types of analysis, technical and fundamental analysis.
Fundamental analysis examines the earnings, the dividends, of an investor. Based on this research, new products are created to improve investors’ ways of investing.
Technical analysis examines what investors fear or think about developments, whether or not investors have the ability to back their options. These two concepts are called Psych and supply/demand.
Stock technicians employ various techniques, one of which is the use of various charts and graphs.
Using these charts, technical analysts seek to identify price patterns and various market trends in the financial markets and try to exploit those patterns. These technicians also use various methods and tools to study price charts. Technicians who use charts for archetypal price chart patterns such as double top/bottom reversal patterns, study technical indicators, moving averages and look for various forms such as support lines, resistance, channels and many obscure formations such as flags, days of balance and cup. and driving patterns,
Technical analysts also make widespread use of market indicators, some of which are mathematical transformations of price, often including volume up and down, advance/decline data, and various other inputs.
These indications are used to help assess whether an asset is trending and, if it is, the probability of its direction and continuation. Experts also look for a relationship between price/volume indices and market indicators.
Several examples include the relative strength index, MACD.
There are many techniques used in technical analysis. Adherents to these different techniques may avoid or ignore the other approaches, however many traders combine various elements of more than one technique. Some use subjective judgment to decide on a particular pattern, a particular instrument reflecting at a given time, and what the interpretation of that pattern should be. Others strictly use a mechanical or systematic approach to model identification and interpretation.
However, the volatility of the markets makes stock prices variable.