What is Technical Analysis? How does it work to analyze market?

  • What is Technical Analysis?How to analyze the market trend with Technical analysis?

Technical Analysis: As we know that there so many trading methods in financial market those traders use to analyze the future market movement and Technical analysis is one of them and many of us believe that support and resistance anlaysis or Technical analysis is one of the basic need of our trading analysis. There is no single analysis avail in financial market which does work well without the use of technical analysis. So lets come to the point Technical analysis is a method of analyzing the future market movement on the bases of past market price & volume behavior. It helps us a lot to understand the market demand and supply chain of the market. Technical analysis can be used in any type of time frames but for a true market behavior and understanding professional trader’s always

suggest the long term time frames like Daily Chart, Weekly Chart etc. 

Along with it this is also important to understand that Technical analysis does not give a 100% success rate of winning trades in financial markets or in trading. This is just an method to analyze the market movement. And this is not necessary that history will repeat itself always, in so many cases changes may possible and that time our Technical Analysis can be fail to analyze the market. But overal in average technical analysis is one of the best way to analyze the market though depend upon a trader that how to use it with big whales footprints, market trend, market demand and supply etc.

  • How does Technical Analysis Work?

The technical analysis trading method works in so many ways, this is not only about following the old history data prices along with it we have to also check that when a support is becoming resistance and when a resistance is becoming support. Get confused right? I can understand, Here I am telling you that technical analysis a wider concept in real, there are three types of market in financial market uptrend, downtrend, sideways and in all these markets we don’t have to only look for old market price data along with it we have to use our TA in a bigger way which depend upon (Support and Resistance theory). Now the question is what is Suppport and Resistance? Lets take a look. 

Support & Resistance: Support & Resistance both these two are differ things. Support is that price level to whom market respect during a downside move and a bounce may expected rather than break through that price level. In other words Support is a price level which push the market toward the upside area. On the other hand Resistance is opposite of support fully, Resistance is that price level to whom market respect during a upside move and a reversal may expected rather than break through of that price level. 

Though it is not fixed that those support and resistance areas will be respected all the time by market, during a downfall if we see that price has breached our support level then more downfall may possible in market as long as the price does not touch another support level below. And during a upside move if we see that price has breached our resistance level then more upside movement may possible in market as long as the price does not touch another resistance level above. 

Along with it we will start to follow the same support and resistance theory if once price has breached our support and resistance levels. Means to say that if we see that price has breached our support area then it will become our resistance area because it is not a support anymore and on the other hand if we see that price has breached our resistance area then it wll become our support area because it is not a resistance anymore.

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