Technical Analysis

Topics We Will Cover

• Introduction to Technical Analysis

• Types of Charts and Candlestick Patterns
• Support / Resistance and Trend Line
• Basic Concepts of Trends and Trend Analysis
• Major Reversal Chart Patterns
• Major Continuation Chart Patterns
• Important Technical Indicators
 Types of Analysis

 Fundamental Analysis
 Technical Analysis
 Fundamental Analysis
 Intrinsic Value
 Eps, PE ratio , Net profit etc
 BOP, interest etc
 External factors
 Technical Analysis
 Prediction of market on the basis of past price and volume.
 Chart patterns and other technical indicators.
 It ignores all the factors other than the price
 History of Technical Analysis

• Technical analysis began in rice market in Japan in 18th century.

• Sokyu Homma, also known as Munehisa Homma, a Japanese rice trader, is known
as the father of candlestick pattern.
• Charles Dow brought the concept of market index
• Charles Dow developed Dow theory which is the groundwork for technical
analysis
• Charles Dow is considered as father of modern technical analysis
• Dow is the founder of wall street journal, one of the most respected financial
publications in the world
Advantages
 Trend direction
 Entry and exit
 Crowd psychology / sentiment
Disadvantages
 Sometimes different signals by different indicators.
 Not 100% accurate.
 Different opinion of analysts.
 Basic Principles of Technical Analysis

 Market action discounts everything

 Prices move in trends
 History repeats itself
 Flexibility and Adaptability

• Technical analysis works in all markets and in any time frame

• Technicians can analyze as many markets as desired

• Technical analysis gives you the view of bigger picture

TYPES OF TRADERS