Have you ever wished you could go into the past and make a decision differently? Maybe you would have said something different, or not said something at all. Better yet, do you ever wish that you could have just seen into the future, assessed the consequences of your actions, and made a better decision in the first place? The stock market is full of investors who wish that they could go back in time and make a less costly trade. If you want to avoid joining their ranks, it's important that you learn all you can about market technical analysis, and put it to work in your own portfolio.
If you're a relatively new investor, and you've never heard of market technical analysis before, it's important to realize that you're not alone. For years people have simply passed off the responsibility of market analysis to their brokers or financial advisors, and only now that the internet has made it so easy to invest independently are people making an effort to get educated about the best ways to make the most of their money. Simply put, technical analysis is a method for evaluating the market that allows analysts to make educated guesses about what's going to happen to the price of a stock based on the way that it has behaved in the past.
In order to fully understand how market technical analysis is practiced in the real market, it's important for new investors to be comfortable with its three most important underlying assumptions. First, technical analysts believe that the market is capable of discounting and adjusting price to reflect qualitative pressures and influences. This essentially eliminates the need to participate in the research that most fundamental analysts spend so much time conducting.
The second assumption of market technical analysis is that the market is inclined to move in trends, meaning gradual and successive movements up, down or sideways in price. Third, technical analysts believe that history is destined to repeat itself, even in the stock market. It is this last assumption that makes the process of analyzing charts and patterns in market price fluctuations so important, because if a familiar pattern can be spotted in advance, the analyst will already know how it's going to end up, and can put them in a position to benefit from it. Becoming a successful technical analyst can take time, so make sure you allow for plenty of practice before you try it on your own.
