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Frequently asked questions about Technical Analysis
Q. It sounds very complicated, what is it?
A. Technical Analysis (charting) is the skill of using past price action to predict the future value of a market. It does not have to be complicated at all.
Q. Why do you use it?
A. To make money trading.
Q. Do I need a mathematics or business/city background to understand it?
A. Not at all. Technical analysis can be used by anyone who wants to make money from trading or whose job involves predicting the future direction of global financial markets.
Q. Does it only work in certain time frames, I heard it only works in the short term?
A. Chart analysis can be applied from a second by second to a decade by decade time frame, i.e. it is equally useful for market makers (very short term), fund managers and every time frame in between.
Q. What markets does it work for, I heard it only applies to certain markets?
A. That is a common misconception, TA, can be used for every single financial market, without exception.
Q. Name some markets where I can apply it?
A. Shares, bonds, currencies, commodities (soft, hard and metals), indices, futures, options, spreads and any other instruments you care to mention.
Q. What about Economics, does that feature in T.A.?
A. No, some people try to use both TA and Economics, but this is actually a misapplication. However, if it helps to make money then it is a case of whatever is good for you.
Q. Money management, does that feature in TA?
A. Yes, this is a crucial element in both trading and TA
Q. Do Chartists disagree in their views of the same market?
A. Yes, like any subject and professional field there are people who are excellent at what they do, and others who are not so good, so opinions will differ. The good thing about trading is the market determines who is right and who is wrong.
Q. Why do Economists and Chartists disagree in their views so often?
A. To be fair there are many different opinions between people, which can then be sub-divided into different groups. Added with the fact that the techniques for both forms of analysis are completely different. The main difference is it can take some time before economic figures alert the fundamentalist to the change in conditions, but a chartist watches the price which will reflect the change quicker.
Q. I am thinking of using charts because if everyone does then views become self-fulfilling, would you agree?
A. This is probably the biggest misconception of them all, Chartists do not move markets any more than Economists or governments have the power to move markets (this is explained further at our seminars). Use charts because they are the best way of finding valuable trading opportunities and not because you feel any single group of people "controls" the market.
Q. What are Oscillators and Moving Averages?
A. They are secondary techniques, often misapplied because the users do not fully understand how to use them correctly. Actually very simple to use, but in a nutshell, use oscillators in a range bound market and moving averages in trends, both are calculated by the computer with the oscillator sitting below the chart giving "buy/sell" signals and the moving average following the price action on the chart area giving signals from there. Used incorrectly they will cost you money.
Q. What do I learn on your courses?
A. Exactly how to predict the future direction of any market and to maximise your trading potential. We run our courses on reputation and encourage you to read the comments from past delegates. We give our students the edge they need to be successful as they have been shown how to master chart analysis. We explain how to manage capital to make money and avoid the common mistakes. They learn how to profit when the market is falling as well as rising and the ability to look at any market in any time frame to make informed decisions.
| Introduction | |
FAQ | |
Learning | |
Experiences | |
Attitudes | |
Case Study |
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