Technical analysis- so many ways to interpret
the same data...
The two words that new and existing traders believe that hold
the answers to the mysteries of the market; Technical Analysis.
This is now one of the most searched for terms on the
world's search engines and has seen an eruption of strategies and
theories around how best to extract the relatively simple
information; where should place my opening buy or sell
order and where should I set my stop loss and take profit?
Access to free charting packages
Spread betting companies and CFD brokers appear to be
leading the way with charting solutions for retail clients with
many companies offering free access to advanced charting tools.
Additionally the spread betting and CFD brokers have embarked on an
educational drive to assist their clients with their decision
making. Much of this training focuses on technical analysis and how
to use their charting tools to manage your market entry and
Tip: Rather than spending lots of your hard
earned cash on expensive charting packages, consider opening a
spread betting or CFD account to gain access to their free
charting packages. Some providers ask that you fund your account
beforehand but there is no obligation to trade.
Some firms employ the services of their own staff for this
training whereas others have decided to use independent trader
training companies. Both have their merits and, as mentioned
previously, it is important that new and existing traders who are
wishing to gain a better understanding of how to use technical
analysis to research the market before beginning any training,
especially if the training course costs money to attend.
TA provides some of the answers but not all of
There remains some scepticism about technical analysis with some
claiming that such methods of trying to forecast the markets
movements are without value and that prices follow a random
pattern. There are others who have used these tools to successfully
trade the markets and make very good documented returns on their
Whichever camp you are in it is important to consider other
trading tools when making important decisions and to always
remember that without a disciplined approach technical analysis
will not help you.
A trader who has a poor understanding of the risk versus reward
of each trade is likely to go the way of so many of the retail
investors today and find themselves losing a large percentage
of their starting capital in a short space of time.