Technical analysis is one of three ways in which financial markets and the instruments traded within them can be analysed and understood, the others being fundamental analysis and quantitative analysis. Technical analysis seeks to identify and exploit changes in the mood of financial markets over time and exploit irrational changes in value due to mood swings. In contrast, fundamental analysis seeks to understand what the value of the instruments ought to be based upon underlying substance and quantitative analysis seeks to maximise returns relative to risk based upon measures of price volatility and growth. Quantitative analysis argue that it is impossible to consistently trade profitably using technical analysis alone as markets efficiently take al available information into account and argue that it is impossible to beat. Value investors, or analysts of fundamental value, argue that markets do behave irrationally but usually emphasise the need for a long term view due to the unpredictability of market behaviour. Technical analysts argue that, provided the urge to resist following the market can be maintained, it is possible to systematically identify and predict swings in market moods.
Over and above giving introduction to various aspects of technical analysis this book will also address how to practically use technical analysis for trading.
To make readers understand Technical Analysis is practical and it is possible to use it for making predictions. This book will contain some marked up charts. It will also contain the approach to practically use the technical analysis in trading.
To the extent possible charts used in this book will be made from the factual data of the actual stocks traded in various markets.