Key Technical Analysis Principles for Success in Stock Market Trading

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People around the world are looking for ways to multiply their investments in short time. Stock market is a place, where the investors can multiply their savings, provided they tread the path with caution. Trading, when done properly, can render huge returns to the investors. However, there is an inherent risk in all forms of trading. People, who want to amass huge wealth using stock market trading, should learn how to minimize their risks and cut their losses. If you are new to this field, you can take Intraday Recommendations from expert advisory firms in the form of Equity Intraday Tips.

Technical analysis and Fundamental analysis are studies, knowledge of which can help the traders to excel in trading. Technical analysis is an in-depth field where the past price movements are studied and analyzed to anticipate the future ones.  A wide range of indicators are studied in Technical analysis. Some of the common technical indicators include Moving Averages, Exponential Moving Averages, RSI, Stochastic, MACD and many more.

While trading in the Stock Market, it should be understood that one should always follow the “Trend” to win. The “Trend Following” is considered as the best strategy to gain consistent returns from the stock market. The market can be either in an Up Trend, a Down Trend or range bound condition. Before determining the trend of the market, the price chart should be set with appropriate time frame.

For intraday trading, the time frame of 1 Min, 2 Min, 5 Min, 15 Min, 30 Min and 1 hr are common. For long term trading, the time frame like Daily Time Frame is common.  Once the chart of appropriate time period is plotted, the technical indicators like moving averages can give an insight about the current trend. The trend can be identified and appropriate entry based on the current trend can be taken.

For an uptrend, the buy positions are opened and for down trend, the sell positions are opened. The ultimate aim while following the trend is to buy low and sell high. Trend following indicators like Moving Averages and Bollinger bands can help a lot to gauge the current trend. Moving average is one of the simplest indicators, which can be used for trend following. The Moving Averages are of two types, namely the SMA (Simple Moving Average) and EMA (Exponential Moving Average). The EMA is a modified version of SMA, which gives faster response than SMA.

Many “Trend Following” strategies like Moving average crossover strategy are based on these SMAs and EMAs. There are many other indicators, which can be used to anticipate the future price movements.    There are many advisors, who generate Equity Intraday Tips based on the principle described above.

Thus, if you want to trade in Intraday Market, you should employ technical analysis to anticipate the market movement. If you are having a hard time in learning technical analysis, you can rely upon the Intraday Recommendations from experts. However, in the long run, you should learn technical analysis and apply it to strategize your trading.