Basic technical analysis related to demand, supply, buying, selling that every trader should learn before actually trading

Basic technical analysis related to demand, supply, buying, selling that every trader should learn before actually trading

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👩‍🎓 🧑‍🎓 “technical analysis” It is a way to study the behavior of stocks. By using chart for the purpose of forecasting future price trends technical analyst will study the behavior of stocks from the price and trading volume (or trading value), which can be considered is an important source of information for technical analysis

However, the strategy in this technical analysis. It’s not that all of a sudden it’s formulated without principles. But actually, there are three concepts or beliefs that this analysis is based on:

1. The behavior of the stock price that is expressed Has absorbed everything that has happened. That means that when economic, political, etc. Changes affect the supply and demand in stocks, of course, will affect the price. Because the price is set from demand and supply of stocks, so if the change occurs up is positive would cause more demand than supply. Or simply say Buying force is greater than Selling pressure. Will result in a price on the other hand, if the changes are negative would produce more supply than demand. (Selling force is greater than Buying pressure) will result in the price going down.

👩‍🎓 🧑‍🎓 However, from the foregoing Key data that technical analysts use to analyze will aim at price and volume. So it seems that technical analysts shorten the scope of study analytical model Fundamental Analysis by jumping to study the conclusion of the impact. And pay little attention to the cause, for example, if the price rises, it means a change in various factors. Quite positive But if mold The price has declined. It means change in factors will be in the negative direction while analyzing fundamentals It will delve into the cause. Which is the driving force behind the resulting supply and demand, but both approaches to solve the problem of the direction of the share price that should be the same.

2. The price will continue to move in the same trend. Until the original trend is really gone The above text contains complete in itself to give you an understanding and there is clarity in This is more. For example, you have thrown a ping-pong ball into the air. (Where the ping-pong ball is considered a stock price.)It can be seen that the ping-pong ball will continue to move up. It follows the direction of the throw and the throw (throw) at first, but over time, the momentum gradually weakens (for whatever reason). Will start to slow down until the transmission is exhausted The ping pong ball will fall down. Which the condition of the movement of the ping-pong ball From the throw until before the drop will be in the direction or upward trend. And will begin to change direction to a downtrend (when the ping pong ball starts to fall) after the uptrend has ended.

3. Patterns or behaviors of stocks that have occurred in the past. It can be applied in the present and in the future, or what we might call “history repeats itself” because technical analysis is more dependent on price and volume, which reflect the net effect of the data source. (information set) in the forecast which the price and volume of this transaction as an indicator of psychology in terms of courage or fear, etc., which no matter what era All of the above has never changed. Therefore, the patterns that occurred in the past (reflecting psychology at that time) can still be used today. Including giving conditions or the probability for the direction of the stock”s movement to occur in the future.

👩‍🎓 🧑‍🎓 All three of the above can be considered concepts or fundamental beliefs that are the origins of technical analysis. Let you know that Those principles have these ideas behind them. By the chart itself It is not the cause of the stock price rising or falling because of the chart. It’s just something printed on a sheet of paper. But with the technical analysis that you will study further, you have the tools to analyze. This will pull out what the share price wants to tell you that the share price will move in any direction. Or it is time for a trend change to occur.

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