Introduction
The financial market is one of the most exciting and fast-paced markets in the world which day by day attracts new traders and investors. Though it provides plenty of opportunity for investors in order to be successful, each investor should understand the basics behind market movements and analyze securities.
The methods used for analyzing securities and making investment decisions fal into two categories: fundamental and technical analysis. Fundamental analysis considers macroeconomic factors to estimate the value of a security, while technical analysis is constrained only to the price movements in the market. Technical analysis attempts to understand the market psychology by studying the market itself.
For this reason, some analysts offer that a better name for the use of such kind of market analysis might be risk/return analysis or market psychology.
At its core technical analysis is a method of determining if a security or the market is worth buying or selling. If one understands the essence, benefits and limitations of technical analysis, it can give him new skills to become a better trader. And as John Murphy, the father of inter-market technical analysis, states “Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.”
In the first chapter of our book, we'll introduce you to the subject of technical analysis-what it is and why it is used. In the second chapter we are going to discuss the trend with al its peculiarities and key points. Chapter 3 and 4 are devoted to the illustration of technical charts and indicators, their major types and how they work to signal the right market direction. Thus, you will be introduced to the main tools and techniques used in technical analysis.