Stock Chart Analysis - Using Market Dynamics to Your Advantage
Even if you've never invested in the stock market before, you've probably heard people talk about indexes like the Dow Jones Industrial Average or NASDAQ closing up or down, and gotten a sense that up was good and down was not so good.
Many inexperienced investors have a general opinion that stock market fluctuations are something to be feared and avoided, but what they don't know is that these fluctuations are not only natural and to be expected, they are also the only way that people can every make money on the market.
If you're going to learn how to exploit these changes for your own profit, it's important to learn more about stock chart analysis.
If you're a relatively new investor, it's likely that you're unfamiliar with the concept of stock chart analysis, so it's important to start with a basic definition that will help you to visualize how essential this practice is to successful investing.
Also referred to as technical analysis, this term is used to describe the practice of tracking stock price movements on visual charts, and evaluating this information so that it can be used to better predict the way a certain security is likely to behave in the future.
Basically stated, stock chart analysis is a way for investors to attempt to see into the future, and make educated predictions about whether a stock's price is going to move up or down, and thereby ascertain whether or not they should buy more shares or sell what they've got.
Although some technical analysts would like to claim that they are always able to correctly predict what a stock is going to do long before it happens, the truth is that this is still a fallible practice and should always be combined with other research techniques to develop a comprehensive stock market strategy.
Although it is the most popular method of stock chart analysis among short term traders, technical analysis isn't the only way that you can evaluate stocks for their future earning potential.
Those who invest in commodities or other long term investments also employ fundamental analysis as a way to guide their investment decisions.
Fundamental analysis is far more concerned with intrinsic value of stocks and their ability to earn a profit gradually over time.
Fundamental analysts spend much of their time researching company history, past financial performance, cash flow stability and other qualitative factors that can influence the earning ability of a certain security.
Many inexperienced investors have a general opinion that stock market fluctuations are something to be feared and avoided, but what they don't know is that these fluctuations are not only natural and to be expected, they are also the only way that people can every make money on the market.
If you're going to learn how to exploit these changes for your own profit, it's important to learn more about stock chart analysis.
If you're a relatively new investor, it's likely that you're unfamiliar with the concept of stock chart analysis, so it's important to start with a basic definition that will help you to visualize how essential this practice is to successful investing.
Also referred to as technical analysis, this term is used to describe the practice of tracking stock price movements on visual charts, and evaluating this information so that it can be used to better predict the way a certain security is likely to behave in the future.
Basically stated, stock chart analysis is a way for investors to attempt to see into the future, and make educated predictions about whether a stock's price is going to move up or down, and thereby ascertain whether or not they should buy more shares or sell what they've got.
Although some technical analysts would like to claim that they are always able to correctly predict what a stock is going to do long before it happens, the truth is that this is still a fallible practice and should always be combined with other research techniques to develop a comprehensive stock market strategy.
Although it is the most popular method of stock chart analysis among short term traders, technical analysis isn't the only way that you can evaluate stocks for their future earning potential.
Those who invest in commodities or other long term investments also employ fundamental analysis as a way to guide their investment decisions.
Fundamental analysis is far more concerned with intrinsic value of stocks and their ability to earn a profit gradually over time.
Fundamental analysts spend much of their time researching company history, past financial performance, cash flow stability and other qualitative factors that can influence the earning ability of a certain security.
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