Technical Analysis for Beginners- An Introduction

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The 3 Major Arguments of Technical Analysis

a) Market Discounts Everything- Anything that can possibly affect the price fundamentally, socially, politically, etc. is already reflected in the price. The price action in the charts reflects the change in demand and supply of the asset. The shift in demand and supply is caused by the above-mentioned factors. Therefore, it is said that price action already includes the relevant elements that are capable of affecting it.

Fundamental Analysis Vs Technical Analysis

To make it easy, Technical Analysis focuses on the study of the price action/market action. On the other hand, fundamental analysis focuses on the study of the cause of the price movement. Fundamental analysis will tell you what asset to trade in and technical analysis will tell you when to trade.

Criticism of Technical Analysis

Many people have questioned the idea that the past can help t predict future trends. They say that charts can only tell you about the past and not the future. Also, technical analysis is subjective in nature. Someone’s analysis of the same chart can be different from someone else’s analysis.

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