What is Technical Analysis?

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Technical Analysis is the forecasting of future price movements of share/stock forex or commodity based on an examination of past price movements. Technical analysis does not lead to absolute predictions about the future. In lieu, technical analysis can help investors anticipate what is “likely” to happen to prices over time. In this the analyst uses a wide variety of charts and data to predict the future of the share forex commodity and even mutual funds. It enables them to define buying and selling patterns in every possible way, and get better chances at succeeding in financial market. One of its advantages is that it makes it easier to follow up with a number of stocks with technical analysis.

Technical analysts use technical Analysis Software to perform technical analysis or charting as it is also often called. These charting tools are helpful in providing information.

VOGAZ is the best Technical Analysis & Predicting, Forecasting, Estimating, Graphing & Charting Software for Stock, Forex & Commodity Market Investors and Traders of NSE, BSE, MCX, MCX-SX, NCDEX, NMCE Exchanges India.

Directional Movement System

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Directional Movement System contains five indicators; ADX, DI+, DI-, DX, and ADXR. The ADX (Average Directional Movement Index) is an indicator of how much the market is trending, either up or down- the higher the ADX line, the more the market is trending and the more suitable it becomes for a trend-following system. This indicator consists of two lines- DI+ and DI-, the first one being a measure of uptrend and the second one a measure of downtrend. The standard Directional Movement System draws a 14 period DI+ and a 14 period DI- in the same chart panel. ADX is also sometimes shown in the same chart panel. A buy signal is given when DI+ crosses over DI-, a sell signal is given when DI- crosses over DI+. The Directional Movement System helps determine if an instrument is trending.The system involves 5 indicators which are the Directional Movement Index (DX), the plus Directional Indicator (+DI), the minus Directional Indicator (-DI), the average Directional Movement (ADX) and the Directional movement rating (ADXR).

For intra-day analysis, he compared current period with the previous period.  the trading range for current period extended primarily above previous period then directional movement was considered to be up. If it extended primarily below previous period’s range then directional movement was considered to be down. There are also rules for handling inside, outside and limit periods. stating that the directional movement is the largest part of current period’s range that lies outside previous period’s range.

The key feature of the Directional Movement System is that it first identifies whether the market is trending before providing signals for trading the trend. It measures the ability of bulls and bears to move price outside the previous period’s trading range +DI measure positive, or upside, movement, -DI measures downward, or negative, movement.. The basic Directional Movement Trading system involves plotting the 14period +DI and the 14 period -DI on top of each other.  When the +DI rises above the -DI, it is a bullish signal.  A bearish signal occurs when the +DI falls below the -DI.

Detrended Price Oscillator

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Technical Analysis Software : Detrended Price Oscillator

The Detrended Price Oscillator is used when long-term trends or outliers must be removed from prices or index indicators. This indicator is often used to supplement a standard price chart. Other indicators can be plotted over the Detrended Price Oscillator. The Detrended Price Oscillator (“DPO”) attempts to eliminate the trend in prices & smoothes the trend in prices. It compares closing price to a prior moving average, eliminating cycles longer than the moving average. It is used to isolate short-term cycles. Short-term cycles add together like musical harmonics to create longer-term cycles. By studying the shorter-term harmonics of a long-term cycle, turning points in the major cycle can be determined. The DPO removes the longer-term cycles from prices, making the shorter-term cycles more visible. The Detrended Price Oscillator is most effective with indicator periods of 21 or less.

Detrended prices allow to more easily identifying cycles and overbought/oversold levels. Short- term cycles add together to create longer-term cycles. Analyzing these shorter-term components of the long-term cycles can be helpful in identifying major turning points in the longer-term cycle. The DPO helps to remove these longer-term cycles from prices.

Comparative Relative Strength

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Technical Analysis Software : Comparative Relative Strength
The Comparative Relative Strength index divides one price field by another price field. The base security is outperforming the other security when the Comparative RSI is trending upwards. Comparative Relative Strength compares two securities to show how the securities are performing relative to each other.

Comparative Relative Strength compares a security’s price change with that of a “base” security. When the Comparative Relative Strength indicator is moving up, it shows that the security is performing better than the base security. When the indicator is moving sideways, it shows that both securities are performing the same (i.e., rising and falling by the same percentages). When the indicator is moving down, it shows that the security is performing worse than the base security.

Comparative Relative Strength is often used to compare a security’s performance with a market index. It is also useful in developing spreads .

Commodity Channel Index

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The purpose of CCI indicator is to identify cyclical turns in commodities. This indicator oscillates between an overbought and oversold condition and works best in a sideways market. The assumption behind the indicator is that commodities (or stocks or bonds) move in cycles, with highs and lows coming at periodic intervals.

The Commodity Channel Index (CCI) is a timing tool that works best with seasonal or cyclical contracts. It keeps trades neutral in a sideways moving market, and helps get in the market when a breakout occurs.

The CCI is a versatile indicator capable of producing a wide array of buy and sell signals. CCI can be used to identify overbought and oversold levels. A security would be deemed oversold when the CCI dips below -100 and overbought when it exceeds +100. From oversold levels, a buy signal might be given when the CCI moves back above -100. From overbought levels, a sell signal might be given when the CCI moved back below +100.

CCI also help identify price reversals, price extremes and trend strength. CCI fits into the momentum category of oscillators

Dashboard - Vogaz.com

Technical Analysis Software India -  – www.Vogaz.com 

Dashboard is indicator based study, that gives bull and bear indicators for a given time interval. With dashboard traders can know how indicators are behaving for each time interval 1min, 5min, 10min,60 min etc. for a given stock, forex, commodity, future or option. Dashboard also summarizes the total number of bullish indicators against total number of bearish indicators.

This study is extremely useful at judging the market trend. It also enables trader to make safer and more confident decisions. It helps in avoiding mix trend, which is a very high risk time to invest.

Dashboard Forecaster

With Dashboard Forecaster you can check how technical indicators would react for a selected stock commodity forex future or option for a given price. In this the user can feed in the price that he wants the predictions on. On this user fed price, dashboard forecaster shows how technical indicators are behaving. Indicators indication can be checked on different time intervals from 1 to 60 minutes.

This study helps the users to know what the future trend can be like if a stock, commodity or future goes up or comes down in price. This can help the user make more accurate judgment.

Forecaster - Vogaz.com

Technical Analysis Software India -  – www.Vogaz.com 

Forecaster is the study based on strict parameters, formulas and calculations, which indicate the right price to enter or exit a trade. Forecaster gives a targeted reversal level and, loft and trash target from the last closed price. Forecaster gives price reversal level for a bullish and bearish trend, and it also summarizes if in the current trend there are long buildups or short buildups.

Let us take an example to explain how the forecaster works and helps to make better trading decision. Suppose a stock or commodity closed price/ current price is 100, it can either go up to 110 or come down to 90. So the investor is going to buy at 90 after it comes down or sell at 110 when it goes up.

In this case forecaster would indicate the bullish reversal price (Selling) as 110 and bearish reversal price (buying) as 90 when its current price is 100. These prices are indicated before the event happens or before the fall or rise of prices. This way the trader gets to know the entry and exit points. He would know if shorts are building up or it’s long trend, and decide accordingly.

Forecaster also gives trash and loft targets. Loft targets are the difference between the reversal levels of long market trend and the last closed price or current price of the stock, commodity or future. And trash targets are the difference between the reversal levels of short market trend and the current or last closed price. By loft and trash target you can also determine if the long or short buildup is getting weaker or stronger or is it even. In case it’s even, then it’s a high risk trade.

Let us take the same example as earlier to explain the loft and trash targets of forecaster, to get more insight on the topic. Now suppose the stock or commodity is at 100 and the long reversal is 110 and trash target is 10, and the short reversal level is 90 making the trash target to be 10. After awhile the stock or commodity rallies up to 105, making the loft target come down to 5 as the reversal level is still 110. And the trash target 15 for reversal level of short trend is still the same, 90.

In this case if the forecaster does not give a new reversal target, it would mean that the long trend is getting weaker. The trash target is still 5 and the reversal is near. If the forecaster gives fresh target and indicates a higher reversal level, it would indicate the long is still strong and the stock or commodity is likely to go higher.

The weaker the loft and trash target gets the more volatile it becomes, and is more susceptible to change. 

Estimator - Vogaz.com

Technical Analysis Software India -  – www.Vogaz.com 

What is Estimator?

Estimator based on technical indicators gives a summarized result of the current market scenario. It gives a list of indicators with bull and bear signals against the, indicating how technical indicators are reacting in the current market, are they indicating a bull or a bear trend.

How does it work?

Estimator summarizes the total bull and bear signals for the current market scenario. It has green (bull) and red (bear) bars that indicate which out of the two trends dominating. If green bars are more it is a bullish trend and if red are more it is a bearish trend. Estimator’s result varies with different time intervals. For a small change in trend use 5 to 15 minutes time interval and for intermediate to major change in trend 60 to daily would be more relevant.

How does it benefit trader?

A trader would get to know when exactly to enter or exit a trade. Estimator would indicate whether in the current market scenario the stock, future or commodity is bullish bearish or is it a mixed trend. It prevents financial market investors from investing at the time of mixed trend, which is a high risk trade. It also shows how indicator is behaving, without having to use it on a chart and analyzing. Sometimes analyst wrongly interprets indicator and can get misguided. 

Predictor - Vogaz.com

Technical Analysis Software India -  – www.Vogaz.com 

What is Predictor?

It is a study, which uses technical indicators to predict future movement of stock, commodity or forex. It indicates or predetermines how equities and derivatives are going to behave for a given set of conditions (plus and minus prices, time intervals, technical indicators, etc.).

How does it work?

Predictor uses the last close price/current indicated price and, negative (minus) and positive (plus) predicted prices, to indicate how the movement of the share, commodity or forex can be in near future. It uses technical indicators like exponential moving averages, stochastic, etc. to indicate if the stock, commodity, future or option is bullish or bearish for the future predicted prices/ levels. It also gives best bullish and bearish levels. These are the levels at which maximum number of indicators indicate that the share, future, option, commodity or forex is bearish or is bullish or going to be bullish or bearish from.  

How does it benefit trader?

It gives clear indication of bullish and bearish trends, current as well as future movement. Traders can select percentage difference from the current close price ranging from 0.05% – 3% that they want their predictions on, and study how technical indicators are reacting to those prices. Predictor makes it easier to get a confirm and safer trade, as it indicates both positive and negative movements. Traders get a clear picture that from what level the indicators are indicating a bear or a bull trend, leading him to act accordingly.

Technical Analysis Is Truly an Arcane Art

Technical Analysis Is Truly an Arcane Art

Technical Analysis and fundamental analysis are merely two different analysis methods. In a nutshell, technical analysis looks at price actions and indicators, and uses this data to predict future price movements. Fundamental analysis, however, looks at economic factors, business fundamentals, stock price value, etc.
Technical Analysis was truly an arcane art before the internet boom. Chartists perform technical analysis in their secret rooms with data that was carefully collected from professional sources. Those were the times when stock prices and data did not have a medium through which to be readily available to the public and be ran through publicly available technical Analysis software to produce the charts that are available today.
Today, with internet in almost every household, technical analysis became an art anyone could practice. Complex charts, technical indicators and analysis that was once the sole domain of a few highly paid Wall Street analysts are now available to anyone who wants it, often for free. Technical analysis also became linked to short term aggressive trading instruments such as stock options and futures because of its excellent short term predictive nature.
With technical analysis this popular, I feel obligated to teach you once and for all everything you need to know about how to conduct proper technical analysis before you start looking at your first chart. A lot of amateurs fail at technical analysis simply because they didn't have the necessary basic knowledge to understand how to interpret technical indications properly in the first place. With the knowledge in this article, you will definite experience more success at technical analysis.
Technical analysts, or chartists, believe that by analyzing stock price histories, they can discern sufficient information about the thinking of buyers and sellers to anticipate future events. The assumption is that there is useful information to be gleaned, hidden within price histories; that technical analysis is a way of analyzing the past actions of the people participating in a particular market, as reflected by their actual transactions. As the assumption of an efficient market is central to almost all option pricing theory, financial mathematicians working in the area of derivatives generally reject technical analysis as unscientific. All large investment banks, however, employ both technical analysts and financial mathematicians. Technical analysts use technical Analysis software to perform technical analysis or charting as it is also commonly called. These charting tools are very helpful in providing information.
There is a myth that more complicated the system lesser is loss and more is profit. Thus many indicators and variables are added for testing. This may work perfectly fine for past data as we are back fitting those indicators which already worked. However in live data we do not know what would each variable have impact on our trading system on its own. If one checks systems of great traders (Turtles or Wizards) they made more money with simple system with best money management tools.
With fast moving markets and every old trading strategy's life becoming shorter by the day back testing has become norm more than experiment. Newer ideas and strategies are developed rapidly and thus back testing becomes part and parcel of this regime.

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Forex Technical Analysis Techniques and Strategies

Forex Technical Analysis Techniques and Strategies

Understanding technical analysis is vital to your success in the currency market. Most professional forex traders rely on technical analysis to make their trading decisions, and so should you.

So what is technical analysis? It’s the study of market action used for the purpose of forecasting future price trends. Put more simply, technical analysis looks only at the prices with complete disregard for why those prices are acting the way it is. The reasons behind the price action are already reflected in the price so are therefore irrelevant to our analysis.

Some fundamentalists look at technical analysis with distain. Fundamental analysis focuses on the underlying economic forces of supply and demand to determine where the market is going. They do not believe in technical analysis.

But the fact is… technical analysis works.

The reason that so many traders depend on technical analysis is because it works. History repeats itself, and patterns emerge. Technical analysis will be able to identify these patterns so you can profit from them.

I personally don’t care why the price of a currency is going up. I just care about making money. Technical analysis will provide you the tools and techniques to help you make the right decisions.

The Art of Charting

Learning to read charts is essential to gain a full understanding of technical analysis. It is the building blocks of the more advanced topics.

Start by understanding the basics of bar charts and candlesticks charts.

Once you understand the basics, discover what all those analysts are referring to when they talk about support and resistance. Support and resistance levels are important to predicting how prices will react when they reach a particular support line or resistance line, and more importantly, how they will react when they break such lines. Click here for a full explanation of support and resistance.

Once you understand the basics, then you can start unlocking the power of trends. Trend following is the most important concept you will ever need to know. Once you know you are in an uptrend, all you have to do is to go long and sit back and relax until the trend I is over. Learn how to recognize trends by learning to draw trend lines the right way.

In addition to drawing trend lines, there are lots of continuation patterns and reversal patterns that have some predictive value. I would not rely on these patterns completely because it is quite subjective, but it is still good to be familiar with them.

Moving Averages – Indicator for the Trending Market

There is more to technical analysis than reading charts. Quantitative analysis gives you a different perspective. Technical indicators based on numbers can be easily tested and quantified, which can be applied more easily to mechanical trading systems.

The most widely used technical indicator is the moving average. It has become the basis for many trading systems, and can be used to generate reliable buy and sell signals. It attempts to determine the beginning of trends, and also the reversal of current trends. Click here to learn how to profit using moving averages.

Another technique based on moving averages was developed by John Bollinger, which is aptly named Bollinger Bands. It places bands that are two standard deviations above and below the moving average, and by looking at the chart, one can see that prices are overbought as it touches the upper band, and oversold when prices touch the lower band.

Moving averages are excellent indicators in trending markets. However they are not as useful in markets trending sideways.

Oscillators – Indicators for the Non-Trending Market

Sometimes there is not a noticeable trend going on. The market is said to be choppy or trending sideways, which occurs when prices fluctuate horizontally.

Oscillators are the best indicators for a non-trending market.

The most basic oscillator is the measure of momentum. It tries to capture the rate at which prices are changing. It generates a buy or sell signal when the momentum chart crosses the zero line.

Other oscillator indicators like the relative strength indicator (RSI), stochastic, and the MACD oscillators are used also to determine whether the market is overbought or oversold.

Summary

Technical analysis can be subjective, and definitely is more art than science. You can not master technical analysis just by reading about it. You must apply it, and see the principles in action for yourself. Only then will you have enough confidence to trade successfully using technical indicators. Visit www.forex-savvy.com for more articles to help you become a successful forex trader.

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What is Technical Analysis?

What is Technical Analysis?

Technical analysts seek to identify price patterns and trends in financial markets and attempt to exploit those patterns. While technicians use various methods and tools, the study of price charts is primary.
Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements. Like weather forecasting, technical analysis does not result in absolute predictions about the future. Instead, technical analysis can help investors anticipate what is "likely" to happen to prices over time. Technical analysis uses a wide variety of charts that show price over time.
Technical Analysis software that can display stock market charts. The nature of technical analysis is of the primary study of stock prices that are believed to be the ultimate expression of any company's standing and performance in the market. Prices of stocks are monitored—their historical and future movements are charted to help present the price trend and volume patterns of stocks. There are a number of technical indicators that are employed in doing a technical analysis. These indicators are price and volume of a stock and the commodity and currency in the market that are transformed into mathematical expressions. The price direction and trend are determined by the use of these indicators. Options technical analysis software would rely heavily on the relative price and volume correlations provided by a technical analysis like its option's put ratios and implied volatility.
Technical analysts use technical Analysis software to perform technical analysis or charting as it is also commonly called. These charting tools are very helpful in providing information.

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Currency Technical Analysis – a Beginners Guide to Bigger Profits

Currency Technical Analysis – a Beginners Guide to Bigger Profits

This article gives you a complete guide to currency technical analysis. We explain why it works, and show you how you can use technical analysis in the currency markets, to make huge profits.

Many traders don’t fully understand the advantages of technical analysis - and scoff at it, saying that it can’t work.

We will however, show you how to use currency technical analysis the right way, to make big profits – so let’s get started.

What is Currency Technical Analysis?

It is simply defined as the study of price action through the use of charts - for the purpose of identifying price trends. It’s not a science, as many chartists claim - it’s an art, and it works! Why? Because technical analysis reflects human psychology. What about the supply and demand fundamentals, you may ask - well it takes them into account too.

Currency technical analysis uses the following equation:

Market Perception (trader psychology) + Fundamentals = Price Action

All currency technical analysis does, is postulate that all fundamentals are quickly reflected in price action (and in the 21st century with our advanced communications this is truer than ever) - so it simply concentrates on price action. It really is that simple!

Price action reflects all the fundamentals, and more importantly, how the participants perceive them.

Traders who study fundamentals claim that you can’t use technical analysis - because you need to know and study the fundamentals, to know where prices are going - this is simply not true! Some of the largest price moves in history, have occurred with little or no change in the fundamentals.

It’s a fact that markets are generally most bullish at market tops and most bearish at market bottoms - and these markets occurred with little or no change in the fundamentals. Human psychology was at work here - and currency technical analysis studies this, as well as fundamentals.

Learn to use technical analysis, and you will see the reality as it is - rather than listening to the opinions of others. Keep in mind that 90% of traders lose money - because they’re influenced by greed and fear created by the news services.

Charts allow you to see the reality - and that’s a huge advantage.

Currency technical analysis makes the following assumptions:

1. Markets Discount

All fundamentals show up quickly in the price action, when you use technical analysis. You are therefore studying the fundamentals as they are - not trying to guess their impact - and of course, you’re studying human psychology as well.

2. Trends Persist

Currency technical analysis can prove this - just get out a chart of any currency, and you’ll see long term trends - many lasting for several years.

History Repeats

The basis of currency technical analysis, is that what has happened in the past, will happen again - and that’s why it’s so effective.

Human behaviour repeats itself - and since price patterns reflect shifts in human psychology, we can assume that certain patterns and trends will repeat themselves.

Your Aim

Your aim is to use technical analysis to catch, and hold the longer-term trends. Keep in mind that human behaviour does repeat itself - but humans can be unpredictable as well!

Keep in mind that technical analysis is an art, not a science. Be wary of theories that say they can predict with scientific accuracy - they can’t! - If they could, we’d all know the price in advance - and there’d be no market.

The good news is that by using technical analysis in the money markets, you can get the odds on your favour - and make big long-term profits.

Trade the Odds with Currency Technical Analysis

In gambling, the aim is to get the odds in your favour - and in trading, your aim should be to trade only when the odds are in your favour. You won’t win every trade - but neither can the top football players score from every kick at the goal.

By following the information outlined here, and putting in a little work and preparation, you could soon be racking up huge long-term profits by using currency technical analysis.

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Is Trading With Technical Analysis Profitable?

Is Trading With Technical Analysis Profitable?

What is technical analysis and is trading based on technical analysis profitable?

Lets start with my definition of what I consider is technical analysis of financial price data. Technical analysis is using graphical charts to identify buy and sell patterns every possible way. With statistics proving that using these patterns gives a better chance for successfully trading the stock market. Let's have a look at what kind of information we are looking for on the chart.

A first basic pattern is the breaking of a trend line and is a very powerful indication that the trend is reversing. A closing price breaking a downtrend line is generally a confirmation that the last turning point is a trend reversal.

A second basic pattern for making buying or selling decisions is the breaking of a horizontal resistance level, or a price turning at the level of a horizontal support line found at price turning points.

A third possibility is making use of more complex reversal and continuation price patterns like a head and shoulders reversal pattern, a triangle, rectangle or diamond continuation pattern, and so on.

A fourth possibility is using the Eastern candlestick chart instead of the normal Western bar chart. Candlesticks show a number of bottom and top reversal patterns and some continuation patterns that can be used successfully for entering or exiting a trade. These patterns have exotic names like bullish and bearish engulfing patterns, doji, harami, hanging man, evening and morning star and much more.

A fifth possibility is counting Elliott impulse and correction waves. Ideally you can enter an up move just after the start of a medium to longer term impulse wave 3, generally after an ABC correction wave for the creation of correction wave 2. Most of the time a 3-wave has an extension with another impulse wave of a lower degree.

A sixth possibility is using oscillators and indicators looking at overbought and oversold areas and specifically at normal and hidden price/indicator divergences announcing trend reversals or previous trend continuations.

Can you imagine the decision making power you have for buying or selling a stock combining all of these techniques? Most reversals in price are announced by more of the previous mentioned techniques. But there is more than just the technical analysis.

Before we can answer the question, "is trading based on technical analysis profitable?" we have beside the use of technical analysis to define entry and exit points, the need for good money and risk management. First let's talk about money management. Personally I prefer the method that has proven to be the most profitable with the best results in every test I made. That is using a limited fixed number of stocks where every stock gets an equal part of the capital at the start, but there is no profit or loss sharing between the stocks. It has also the big advantage that it is so much more easy to follow-up just a small number of stocks with detailed technical analysis.

Risk management makes sure that the risk-to-reward ratio is in favor of the reward. Opening a trade you must limit the risk and make sure that the first reward target is better than the risk. Future price projection techniques will give you an estimate as to where price can go. Once an open position, you must also use a trailing stop method to make sure you keep the profit and that you will close the trade if standard technical analysis fails. Future price estimates can be made using Fibonacci projections crossing pitchfork channels and a number of other techniques.

It should be clear by now that the pure technical analyst does not look for fundamental data about the stock he is trading. You could basically leave out the name and even the time period from the chart and the technical trader will still be able to do the job. Because price data moves in a fractal way you can basically trade with the same rules in any time frame, from bar charts using minutes, hours, days or weeks.

So, the big question again, is trading based on technical analysis techniques profitable? YES it is! The easiest way for me to prove this is using an automatic trading system based on technical analysis to buy and sell. The SATS2 auto-trading-system I am using is now about 2 years old, does not use any optimizing and is still giving good results over the last 7 months before today's date of October 27, 2009. Since the start of the test period on March 13, 2009 and closing on October 23, 2009, or about 7 months, it generates a profit of 156% using my own 38 US stocks selection that I am following-up closely.

Since this is an automated system, it has its limitations and is certainly not as intelligent as you can be, looking at the chart yourself. It is clear that making manual buy and sell decisions should still give an even much better result. But I just wanted to make my point here that trading based on technical analysis is profitable.

In this article I tried to answer the question of what is technical analysis and is trading based on technical analysis profitable. I hope I have convinced you that yes it can be very profitable.

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Technical Analysis Training - How to Find a Good Course

Technical Analysis Training - How to Find a Good Course

So you've determined that you are going take full control of your financial future. And you've studied the stock and commodities market and have some well founded opinions. You're up to speed on the latest economic indicators and the health of the dollar. You know what you'd like to do, and in which markets.
But you also know that the rich wise old men on Wall Street say "Decide what to trade based on fundamentals but make your entrance and exit decisions based on technical analysis."
You know that you need technical analysis training. But to learn technical analysis, you will need a good course. How should you go about finding a good one?
Here are some "street-smart" guidelines for picking a good technical analysis course.
Answer these questions and you'll be well on your way.
What are the author's credentials?
Look for someone who has been in the field for many years, and is not likely to be swept away by the latest fad. Wall Street has lots of fads but surprisingly few enduring ideas.
Is the author a trader or an academic?
If the material you want to learn is basic, well established, and does not move much past what is available in the public domain, then an academic business writer may be quite adequate. All the major business publishers will have a basic textbook on technical analysis.
But if you are seeking more powerful techniques and want to read about them in detail, look for an author who is a bone fide successful trader, as it is likely that he or she will focus on the most useful and productive strategies, and not get caught up in describing every possible variant of the moving average. You want to know what works, not what is possible.
Is the technical analysis training applicable to any tradable security?
If you are spending the time to learn technical analysis chart patterns, then you want them to be applicable to stocks, to Forex trading, to futures and to commodities. It would not be the best use of your time to learn technical analysis online if it applied only to the dow jones.
Are the techniques simple and straight forward or overly complex?
Some courses require heavy mathematical background, such as college-level calculus. But the best courses can be understood by any intelligent layman with a high school education. As it turns out some of the greatest traders have learned their stock or Forex technical analysis using nothing more than common arithmetic and some simple hand drawn charts. It could have been done by anyone with a sixth grade education. Be wary of claims of technical analysis training that has many advanced educational prerequisites.
How much does the course cost?
Cost is a factor for everyone but be careful about courses which are free or for very low cost. This is not to say they are without value, for a free course may contain a lot of useful basic information, particularly if that information is in the public domain and can be also accessed from a standard book. But in trading and the financial markets especially, you tend to get what you pay for and really useful information generated by successful traders most likely will not come for free. You should carefully investigate it and if possible talk to someone who has taken the course in the past to determine of there is true value to the technical analyses course, indicators or software you are considering.
Keep your eyes open and do your homework, and you'll find the right technical analysis training for you!


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Understanding Technical Analysis Software

Understanding Technical Analysis Software

It these times of foreclosures, job loss and an overall bad economy, citizens of the United States are more cautious about where they money is. So it should be a not surprise that the emphasis of importance on technical analysis software is at an almost all time high.

There are many different areas to understand when dealing with technical analysis software. In this article, we will run through the basic and most common found areas.

This first is charting, which is defined: as the graphical interface that contains price along with volume and also technical analysis indicators showcased by a large array of visual interfaces through such things as bar, line, candlestick and also Low-Close-Open-High charts.

The next area of technical analysis software we will look at is back testing, which is defined: enables traders to not only test a technical analysis investment and timing strategies but also test against historical prices and movements for one specific securities or even more.

Optimization is the third area of technical analysis software, which is defined: as the process of being able to test a technical analysis indicator and their parameters, with the goal of creating an investment strategy that will generates the largest return based on the historical price movement. This process is most notably achieved by fine-tuning the associated technical analysis and the charting parameters.

The fourth area of technical analysis software is the scanner, which is defined: enables users to view the market, whether it is stocks, currencies, options, or others to narrow in on investment opportunities that will meet the user's specific investment requirements.

Alerts are the next area of technical analysis software, which is defined: a kind of software that will be used in order to monitor certain equities, such as options, stocks, warrants, currencies, etc, and to provide a notification to the user of when certain volume, price and also the technical analysis investmenting conditions are achevived.

The sixth area of technical analysis software is a customer indicator, which is defined: a collection of the de-facto standards indicators.

Data Feed is the seventh area of technical analysis software and is defined as: a feeds that provides the user with end of day price at closing on the given equity along with the fact that it is usually updated at least one time per day usually at market close.

Finally last but no least, broker interface comes in as the eighth area of technical analysis software. It is defined as: a device integrated with the brokerage platforms in order to allow traders to place their trades via the user interface they are most comfortable with.
As far as installing technical analysis software, you as a user have a few different options. Let's take a look what devices are compatible
PDA (personal digital assistant) is a venue you can use to download technical analysis software. Most PDA's will be compatible, as long as they have an internet connection and Java Apps.

A cell phone is another convenient, on the go, option to download technical analysis software. Like the PDA, most cell phones will work as long as they have an internet connection and Java Apps.

PC (personal computer) and/or laptop are obvious options to download technical analysis software. Probably the most logical device to use as you can use your software in comfort of your own home or business with a normal size monitor or screen.

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The Logic Behind Technical Analysis

Let me first say that I do not now engage in technical analysis; nor, have I ever engaged in technical analysis. I do not believe doing so would be a productive use of my time.

Having said that, I do not claim technical analysis has no predictive value. In fact, I suspect it does have some predictive value. The Efficient Market Hypothesis is flawed. It is based upon the (unwritten) premise that data determines market prices. As Graham so clearly put it in "Security Analysis":

"...the influence of what we call analytical factors over the market price is both partial and indirect - partial, because it frequently competes with purely speculative factors which influence the price in the opposite direction; and indirect, because it acts through the intermediary of people's sentiments and decisions. In other words, the market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities. Rather should we say that the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion."

I've seen a lot of people cite this quote, without bothering to notice what's really being said. Graham had a very broad mind, much broader than say someone like Buffett. That's both a blessing and a curse. At several points in Security Analysis (and to a lesser extent in his other works), Graham can not help but explore an interesting topic more deeply than is strictly necessary for his primary purpose. In this case, Graham could have said what many have since interpreted him as saying: in the short run, stock prices often get out of whack; in the long run, they are governed by the intrinsic value of the underlying business. Of course, Graham didn't say that. Instead he chose to describe the stock market in a way that should have been of great interest to economists as well as investors.
Data affects prices indirectly. The market is a lot like a fun house mirror. The resulting reflection is caused in part by the original data, but that does not mean the reflection is an accurate representation of the original data. To take this metaphor a step further, the Efficient Market Hypothesis is based on the idea that the original image acts on the mirror to create the reflection. It does not recognize the unpleasant truth that one can interpret the same process in a very different way. One could say it is the mirror that acts on the original image to create the reflection. In fact, that is often how we interpret the process. We say an object is reflected in a mirror. We rarely use the active "an object reflects in a mirror".
For some reason, when we talk about the market we like to use inappropriate metaphors. We talk about wealth being destroyed when prices fall. Yet, no one talks of wealth being destroyed when the price of some product falls. When the market rises, we talk about buyers, as if there wasn't a seller on the other side of the trade. Above all else, we talk about "the market" not as a mere aggregation of trades, but as some sort of object all its own.
The Efficient Market Hypothesis does not recognize the true importance of interpretation. Saying that data (publicly available information) acts on market prices omits the key step. After all, the same data is available to every blackjack player. Casinos just don't like the way a card counter interprets that data.

The Efficient Market Hypothesis is not the only argument against technical analysis. There is also empirical evidence that questions the utility of technical analysis. However, empirical evidence alone is not sufficient to prove technical analysis has no predictive power. If most knuckleball pitchers had limited success, the knuckleball might be an inherently ineffective pitch, or there might be a better way to throw it. The same is true of technical analysis.

The adjective "random" is a very strange word. Although it is rarely the definition given, the most appropriate definition for random would have to be "having no discernible pattern". The word discernible can not be omitted. If it is, we will take too high a view of science and statistics. There's a great introduction to economics written by Carl Menger which begins:

"All things are subject to the law of cause and effect. This great principle knows no exception, and we would search in vain in the realm of experience for an example to the contrary. Human progress has no tendency to cast it in doubt, but rather the effect of confirming it and of always further widening knowledge of the scope of its validity."

All things are subject to the law of cause and effect; therefore, nothing is truly random. A caused event must have a pattern - though that pattern needn't be discernible. Even if one argued there is such a thing as an uncaused event, who would argue that stock price movements are uncaused? We know that they are caused by buying and selling. Stock prices are the effects of purposeful human actions. Several sciences study the causes of purposeful human action; so, it would be hard to argue any human action is uncaused. Furthermore, each of our own internal mental experiences suggests that our purposeful actions have very definite causes. We also know that the actions of some market participants are based in part on price movements. Many investors will admit as much. They may be lying. But, there is plenty of evidence to suggest they aren't.
If the actions of investors cause price movements, and past price movements are a partial cause of the actions of investors, then past price movements must partially cause future price movements.
Technical analysis is logically valid. Not only is it possible that some form of technical analysis might have predictive power; I would argue it necessarily follows from the above assumptions that some form of technical analysis must have predictive power.
So, why don't I use technical analysis? I believe fundamental analysis is a far more powerful too. In fact, I believe fundamental analysis is so much more powerful that one ought not to spend any time on technical analysis that could instead be spent on fundamental analysis. I also believe there is more than enough fundamental analysis to keep an investor occupied; so, he shouldn't devote any time to technical analysis. Personally, I feel I am much better suited to fundamental analysis than I am to technical analysis. Of course, there is no reason why this argument should hold any weight with you. I also believe there is sufficient empirical evidence to support the idea that fundamental analysis is a far more powerful tool than technical analysis.

Even though I believe there must be some form of technical analysis that does have predictive power, the mental model of investing which I have constructed does not allow for such a form of technical analysis. In other words: logically, there must be an effective form of technical analysis, but practically, I pretend there isn't.
Why? Because I believe that's the most useful model. One should adopt the most useful model not the most honest model. I'm willing to pretend technical analysis does not work, even though I know some form of it must work.
Really, this isn't all that strange. In science, I'm willing to pretend there are random events, even though I know there must not be random events. In math, I'm willing to pretend zero is a number, even though I know it must not be a number. A model with random events is useful. In most circumstances, a refusal to allow for random events would be harmful rather than helpful. The model with random events is simpler and more workable. The situation is much the same with zero. It isn't a number. To include zero as a number, you would have to put aside the principles of arithmetic. So, we don't do that. In school, you were taught that zero is a number, but that there are certain things you must never do with zero. You accepted that, because it was a simple, workable model.
I propose you do much the same in the case of technical analysis. You should recognize the logical validity of technical analysis, but create a mental model of investing in which technical analysis has no utility whatsoever.

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Explaining The Term Technical Analysis

The study of a security's price action for the purpose of forecasting profitable price trends and movement is known as Technical Analysis. The price action is defined as movement in a security's price, volume, and open interest.
Technical Analysis is primarily, maybe not exclusively, conducted by studying charts of the recent past price action. Many different methods and tools are new in Technical Analysis, but they all rely on the superlative assumption that price patterns and trends exist in markets, and thus, that they can be identified and exploited too.
Technical Analysis does not try to analyze the financial data of a company, can say the cash flow, dividends and projection of future dividends, an area of analysis which is also known as the fundamental analysis. However, some speculators try to combine Technical Analysis as the elements from both technical and fundamental analysis.
Like any predictive method, Technical Analysis is not 100% accurate, but it surely attempts to give the presumable outcome. Some forms of Technical Analysis, like charting, are viewed by many of its practitioners as more art than science.
Some scholastic studies conclude that Technical Analysis has little predictive power while other studies show that the practice can produce excess returns too. For an instance, measurable forms of Technical Analysis non-linear prediction using neural networks have been shown to occasionally produce statistically significant prediction results.
Lets take an example to understand the debate regarding the efficacy of Technical Analysis, a very well-known and successful fundamental analyst, once commented that, "Charts are wonderful for predicting the past."
A Federal Reserve working paper has shown that the statistical properties of intraday foreign exchange prices change near the "support and resistance" lines, without showing that this result would be new in a profitable trading approach.
History Of Technical Analysts
The Technical Analysis premises were derived from observation of financial markets over a long period of time say hundreds of years. Perhaps the oldest branch of Technical Analysis is the use of candlestick techniques by Japanese traders at least as early as the 18th century, and are yet still very popular today.
Another theory based resting on the collected writings of Dow Jones, the co-founder and editor Charles Dow, inspired the use and progress of Technical Analysis from the end of the 19th century. Modern research considers Dow theory its foundation stone.

For Technical Analysis the technical tools and theories have been developed and enhanced in recent decades, with a raising emphasis on computer-assisted techniques.
Common Beliefs Regarding Technical Analysis
The Technical Analysis is not at all concerned with why a price is moving but rather whether it is moving in a particular direction or in a particular chart pattern. For example, poor earnings, difficult business environment, poor management, or other fundamentals.
The analysts of Technical Analysis believe that profits can be made by the concept of "Trend following." What is tried to pronounce here is that if a particular stock price is steadily rising, that is, trending upward then a technical analyst will look for opportunities to buy this stock.
Until the technical analyst is convinced this up trend has reversed or ended, all else equal, he will maintain to own this security.
Additionally, technical analysts during the Technical Analysis look for various price patterns to form on a price chart and will take positions in anticipation of the expected move following that pattern. The tools of the analysts are believed to assist the technician in determining when trends have formed, ended, and so on till particular patterns are unfolding.
Technical Analysis can be at odds with fundamental analysis. Fundamental analysis maintains that the markets can miswrite a security and, through various methods of fundamental analysis, the "correct" price can be calculated too.
Profits can be made by trading the mispriced security and then waiting for the market to distinguish its "mistake" and reprice the security. In contrast, a technical analyst during the process of Technical Analysis is not interested in a security's "correct" price, but is only in the price movement.
While Technical Analysis is done there are two well-known sayings among technical analysts that are, "The trend is your friend," and "Forget the fundamentals and follow the money." An example of the different views of technical and fundamental analysis follows.
Suppose a stock was trading at 124.25 pence, and that the accord fundamental analysis view of the stock was that it was worth 120.00 pence. If the share price rose to 125.00 pence, then to 126.00 pence, and then to 127.00 pence, a technical analyst during his Technical Analysis would likely be a buyer of this stock in order to profit from the perceived trend.
In contrast, a fundamental analyst would possibly look to sell the stock as it is moving away from what the fundamental analyst believes is the "correct" price.
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Fundamentals of Technical Analysis

Technical analysis was truly an arcane art before the internet boom. Chartists perform technical analysis in their secret rooms with data that was carefully collected from professional sources. Those were the times when stock prices and data did not have a medium through which to be readily available to the public and be ran through publicly available software to produce the charts that are available today.
Today, with internet in almost every household, technical analysis became an art anyone could practice. Complex charts, technical indicators and analysis that was once the sole domain of a few highly paid wallstreet analysts are now available to anyone who wants it, often for free.
Technical analysis also became linked to short term aggressive trading instruments such as stock options and futures because of its excellent short term predictive nature.
With technical analysis this popular, I feel obligated to teach you once and for all everything you need to know about how to conduct proper technical analysis before you start looking at your first chart. A lot of amateurs fail at technical analysis simply because they didn't have the necessary basic knowledge to understand how to interpret technical indications properly in the first place. With the knowledge in this article, you will definite experience more success at technical analysis.
Summary of Technical Analysis Basics

2 Principles of Technical Analysis: Significance, Prudence
2 Key Tools: Charts, Indicators
2 Key Components: Price, Volume
5 Key Concepts: Resistance, Support, Trend, Patterns, Setups

2 Principles of Technical Analysis: Significance, Prudence
The two principles of technical analysis are the most important foundation in understanding technical analysis and interpreting technical analysis properly. Too many amateurs misinterpret technical indications simply because they did not understand these two simple principles. This is also the only part in this tutorial that addresses the mental aspect of technical analysis and should be clearly understood before moving on. The two principles of technical analysis are Significance and Prudence.
Technical Analysis Principle #1: Significance
Significance refers to the degree that a technical indication is true. Take breakout and reversal signals for example. Does a 0.5% close above a resistance level indicate a breakout? Does a 1% reversal in a bearish stock that has fallen more than 40% indicate a reversal? No. The degree of significance for both cases is just too weak. Most technical analysis beginners who do not understand the principle of significance would take a small fake out as a breakout and then act on the wrong stocks. The judgment of significance is, however, a matter of experience. How much of a breakout represents a significant breakout? How much of a reversal represents a significant reversal and how big a candle represents a strong morning star signal? The judgment of significance is something you need to acquire and refine as you put more years behind your ears.
Technical Analysis Principle #2: Prudence
Prudence refers to the ability to say "No" when in doubt. Technical analysis is more of an art than a science. This is because even though technical indications are scientifically generated, the interpretation of technical indications is highly subjective. You are going to experience many marginal or doubtful moments in technical analysis. Technical signals that "almost made it" as well as technical signals that are "neither here nor there". Those are the times to exercise the technical analysis principle of Prudence and to make the most conservative interpretation. When a signal is marginal, you should always exercise prudence by giving benefit of the doubt to disqualifying the signal. When a significant breakout signal is produced after a huge drawdown, you should exercise prudence by waiting for further confirmation or enter the position gradually over a few days.
2 Key Tools: Charts, Indicators
Technical Analysis Key Tool #1: Charts
Chart reading is the most fundamental tool in technical analysis and is also why technical analysis is frequently referred to as "Chartology". Before the popularization of the internet, during the age where analysts still read tapes, technical analysts have to obtain stock quotes from "secret sources" and then plot them down on huge chart papers in their secret rooms. What then is a chart? A chart is simply a plot of the stock prices made into a curve. A chart's basic function is to show the TREND of a stock's price action. Without a chart, a stock closing at a price of $50 has no meaning at all. With a chart, you can clearly see the price action trend down from $100 to $50, giving investors the first indication of where the future price action of that stock might be. In the beginning, charts are plotted merely as a single line joining the prices together. Recently, with more and more powerful computers and software, more innovative and informative plotting methods like candlesticks, bar charts and point and figure charts are developed and made easily available through the internet. No matter what type of chart you look at, the only aim is to provide an indication of where the future movement of the stock might be. Another important aspect of charts is "Chart Patterns". Different types of charting method can produce easily recognizable patterns and formations that can be associated with certain future expectations. Popular chart patterns include "morning stars" in candlestick charting, "double top breakout" in point and figure charting and "double bottom" formation.
Technical Analysis Key Tool #2: Indicators
Technical Indicators are the other key tool in technical analysis. Technical indicators are graphical representations of various mathematical formulas based on the stock price and transaction volume. The are literally thousands of technical indicators out there and more are being developed daily as new finance theories are translated into mathematical formulas every day. Technical indicators' main function is to tell when a stock is considered oversold or overbought and when a stock is considered weak or strong relative to its past action. There are literally endless amount of formulas that can be used to provide those indications, hence the endless number of technical indicators. Because there are so many different technical indicators out there, beginners should start with a few well known and widely used ones as those tends to be used by institutional investors as well. It can be argued that the effectiveness of a technical indicator lies in its popularity. The more investors acting on the same indicator, the stronger the predictive nature of the indicator becomes. A self fulfilling prophecy? Maybe.
2 Key Components: Price, Volume
 Surprisingly, so many different charting methods and technical indicators used in technical analysis all stems from the same 2 key components, Price and Volume. The price and volume of a stock are the only two publicly available information pertaining to that stock. Out of its price and volume, stock charts and technical indicators are created. Candlestick and bar charts are constructed out of the opening price, closing price as well as high and low prices. Relative Strength Index is created out of the price as well as volume of a stock compared against its historical data.
5 Key Concepts: Resistance, Support, Trend, Patterns, Setups
The 5 key concepts of technical analysis are the 5 most important analytical methods in technical analysis. Understanding all 5 are critical to the mastery of technical analysis. All 5 key concepts work together to help technical analysts predict future stock movement and know when to buy or sell a stock. Of particular importance is the ability to tell when to buy or sell a stock. This is the kind of information that fundamental analysis will not provide.
Technical Analysis Key Concept #1: Resistance Level
A resistance level is a price level at which most investors sells a particular stock at, resulting in the stock falling every time that price level is hit. It acts almost like a brick ceiling from which the stock falls down every time it hits its head on it. Resistance levels are identified from reading price charts, particularly point and figure charts. It is a level which you might want to at least take some profit off the table. Even though resistance levels make excellent selling points, a breakout of a resistance level does spur a stock strongly to upside, creating an excellent buying opportunity. When anticipating resistance level breakouts, it is important to apply the 2 key principles of technical analysis outlined above.
Technical Analysis Key Concept #2: Support Level
A support level is a price level at which most investors BUYS a particular stock at, resulting in the stock rising every time that price level is hit. Support levels are the reverse of resistance levels and acts almost like a trampoline on which the stock rebounds every time it lands on it. Support levels are also identified from reading price charts and is a level where you might consider buying a stock at, especially when a stock hits a correction. Even though support levels make excellent buying points, a breakdown of a support level does spur a stock down a lot more. This is why the 2 key principles of technical analysis are important when timing an entry using support levels.
Technical Analysis Key Concept #3: Trend
The main objective of looking at the trend of a stock through price charts is the anticipation that the trend is going to continue going in the same direction generally. It is like buying fashion that conforms to the current trend. If no other information is available, an investor looking at a price chart would always have a better feel of where a stock is going than an investor looking merely at a closing price, right? Of course, no trends go on and on forever. This is where technical indicators come in to provide an indication of how strong or weak a trend is.
Technical Analysis Key Concept #4: Patterns
Chart Patterns are shapes formed by price charts. Some popular chart patterns are "Double Bottoms" and "Head and Shoulder Formation". They are so named based on the shape formed by a price chart. These easily recognizable patterns provide an interpretation on what investors are expecting the stock price to head towards. Double Bottoms typically indicate a reversal and head and shoulder formations typically indicate a switch to a bear trend. There are a ton of chart patterns out there and all needs to be interpreted in conjunction with the right technical indicators while applying the 2 key principles of technical analysis.
Technical Analysis Key Concept #5: Setups
Setups are specific patterns formed by using different charting methods. A morning star setup using candlesticks charting may not show up as a buying signal in a point and figure chart. This is why different charting methods need to be used to cross check buying or selling setups produced by one charting method. A setup is a lot more specific than a chart pattern. A chart patterns tells you where a stock might be heading and a setup tells you when you can buy or sell a stock. Setups need to be interpreted together with the other key concepts while applying the technical analysis principles. A buying setup occurring at support levels or a selling setup occurring at resistance levels makes the setups more convincing.
Fundamentals of Technical Analysis - Conclusion
All the fundamentals of technical analysis needs to be used together like all parts of a car, nothing can be left out if you want to be successful with technical analysis. So far, you might notice that technical analysis has the ability to precisely time entries and exits on high probability stocks. This is also what makes technical analysis so important to options trading. Trading Stock options requires the stock in question to move as expected quickly in order to reduce the effects of time decay and to maximize profits. I hope this article has been useful to you as you start your journey in trading and to your future success.
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Technical Analysis Software India - VOGAZ

Technical Analysis Software India - VOGAZ