Technical Analysis

Technical Analysis

Should I buy today? What will prices be tomorrow, next week or next year? Wouldn’t investing be easy if we knew the answers to these seemingly simple questions? If you are following this blog in the hope that my experienced technical analysis has the answers to these questions, I’m afraid I have to disappoint you early—it doesn’t. However, If you are following this Blog with the hope that my experienced technical analysis will improve your investing and in increasing your profits, I have good news-it will!

The term “technical analysis” is a complicated-sounding name for a very basic approach to investing. Simply put, technical analysis is the study of prices, with charts being the primary tool.
The roots of modern-day technical analysis stem from the Dow Theory. Stemming either directly or indirectly from the Dow theory, these roots include such principles as the trending nature of prices, prices discounting all known information, confirmation and divergence, volume mirroring changes in price, and support /resistance. And of course, the widely followed Dow Jones Industrial Average is a direct offspring of the Dow theory.

Dow’s contribution to a modern-day technical analysis cannot be understated. His focus on the basics of security price movement gave rise to a completely new method of analyzing the markets.