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Stock Exchange Technical Analysis-Charting Your Way To Success

Comments Off on Stock Exchange Technical Analysis-Charting Your Way To Success 15 June 2011

What causes the cost of a stock to go up, down, or sideways? Most of what occurs in the market is mental. The cost of a stock is set by the passion or conviction of all prospective purchasers and sellers. There should be a customer for each seller, and a seller for each consumer. It must balance out.

The cost of a stock will go up when customers are way more positive. This suggests the requirement for a stock, the orders to buy, is larger than the supply, which is the orders to sell. When the opposite is right the cost of a stock will go down. If consumers and sellers have about equal conviction, the cost of a stock will stay pretty much the same. Understanding this idea is a great start in stock exchange technical research.

Chart reading, also known as technical research, provides us with a record of the battle between customers and sellers. We may be able to visualise who is winning this battle by investigating price and volume action. This is done on a short or long term basis. Some researchers also use over-bought and oversold signals as a part of their across-the-board research. I don’t use these signals, because markets can actually go up or down, much longer than, and much further than, what the general public believe is possible.

Chart reading helps us identify the power of demand vs the pressure of supply at numerous price levels. This gives us an excellent idea of the likely direction a stock will move. After you know the likely price direction of a stock, you have gone up your chances of success seriously. Satisfactory trading is all about chances and putting the chances in your favour.

In the market, history does repeat itself pretty often. This is due to human instinct, which never changes. Man’s instinct with its feelings such as gluttony, fear, and hope, is what gives us re-occurring chart patterns. Learning to correctly research these patterns, with price and volume research, is the secret to success.

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