Chapter 8
Picture This: Technical Analysis
IN THIS CHAPTER
Researching markets and trades
Using technical analysis to forecast prices
Gleaning information from the charts
Reviewing schools of thought in technical analysis
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 ...
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