Chapter 7

Technical Analysis 101

In This Chapter

arrow Researching markets and trades

arrow Using technical analysis to forecast prices

arrow Gleaning information from the charts

arrow Reviewing schools of thought in technical analysis

arrow Avoiding the traps that technical analysts can fall into

In some ways, day trading is easy. Open up an account with a brokerage firm and off you go, buying and selling securities! But how are you going to know when to buy and when to sell? That's not a simple matter. Most day traders fail because it's easy to place the order but hard to know whether the order is the right one.

Traders use different research systems to evaluate the market and have access to tools that can help them figure out when a security is likely to go up in price and when it is likely to go down. Two primary types of investment research systems exist: technical analysis and fundamental analysis. Technical analysis, which is widely used by day traders, looks at the supply and demand for a security and ...

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