Technical Analysis Redefined

In support for the previous post discussing technical analysis, we have included a continuation or a support as what I have said earlier which will expand our knowledge in stock trading. It wouldn't be harmful if you read this anyway.

Technical analysis is the study of a stock's past market activity through the use of charts. Visually, this is a much easier aspect of stock trading to understand than a stock's fundamentals. A stock's price and its change over time are the main pieces of data used within technical analysis, but volume and volatility are also among the many other factors that are used to calculate the charts technical analysts use. Technical analysis relies on the premise that past prices and trends influence a stock's future actions.

Many short-term traders, especially short sellers, rely solely on technical analysis because it is great for detecting trends within a stock's movement patterns. This makes it a wonderful tool for day traders who wish to cash in on the slight ups and downs within a stock's price. However, technical analysis is only part of the puzzle. Fundamental analysis is just as important, especially for longer-term short selling, and a firm understanding of both will help you over the short and long term.