What is technical analysis? Why should you learn it?
Technical Analysis is a method of evaluating investments by using statistical trends using its charts. The inherent belief is that past trading activity and price changes of security can be valuable indicators of the security’s future price movements.
Through concepts like price action, charting, candlesticks, and technical indicators like RSI, Bollinger, and Moving Averages, one can leverage and monetize the gap between intrinsic value and market price.
Technical Analysis is becoming increasingly popular as the concepts of demand-supply continue to rule the market trends.
Most fundamental traders too often use technical analysis to pinpoint the most lucrative low-risk buy entry points!
What does a technical analysis course cover?
Technical Analysis is a craft – one that needs to first learn and then mastered through practice. Through a Technical Analysis course, one can understand both the profit as well as the risk element in trading securities.
A good technical analysis course will teach you how to identify technical trends, patterns, and signals using technical approaches to make the maximum profit. It will cover technical concepts like chart patterns and gap theory, and teach you how to build your trading strategies. It should also cover the behavioral aspects of trading like the psychology of successful traders. Through a course, you will be able to successfully shortlist entry, exit & stop loss price points, which are extremely important for a longer-term trading journey.
What most traders believe to be most important in your trading journey is to be able to identify (and leverage!) your trading style- whether it’s intraday, swing, or positional, and that depends majorly on the time you commit and your affinity in general towards particular topics (like Price Action, Technical Indicators & Strategies). A course on the same will give one the much-needed clarity and confidence to be able to use their natural talent coupled with their learned skill to their advantage.
What does it offer to beginners?
An extensive course is the perfect entry-point for beginners looking to understand the nuances of securities – they can get an understanding of the basic market terminologies and concepts. It is especially crucial for those looking to build a career in capital markets to build a solid foundation and understand the risk-reward in question. It will also help a novice to gain some practical exposure to the market.
Like we mentioned, identifying your trading style is of utmost importance, and an extensive technical analysis course will help you learn the same from scratch. It will give you a first-hand understanding of your strengths and risk tolerance along with the style that suits your personality the best.
An industry pro will tell you that real success in trading is achieved by finding your optimal style and using it to your advantage. You may be an aggressive trader or a moderate risk taker (either works just fine!) but unless you’re able to identify the same and play to your strengths, it’ll be a long road for you! The moral of the story- Trading is hugely linked to your personality, and the earlier you realize that the better it is for you!
What about more advanced professionals?
In any profession continuous learning is imperative but this is especially true for traders who need to keep enhancing their knowledge base and upskilling themselves to make the most of the opportunities present in the market. As an advanced trader, a proper course will enable you to make a system that can be backtested based on your strategies. These strategies would be honed by you, by doing multiple rounds of backtesting using past price data to test whether the strategies have a good hit rate & therefore can be used to predict future price performance. Advanced traders are often interested in latency & how quick they can time their trades (if they are intraday traders), and therefore taking trades on a 5 & 15 Minute timeframe is extremely important – also what comes through on such a timeframe is insane amounts of volatility & uncertainty — learning how to manage these time frames effectively is extremely important to succeed as an intraday trader, something that can be managed effectively by learning in an induced environment.
Psychology of Trading
Trading is 97% Psychology— learning how to manage your mind, your hits & misses, dealing with overconfidence & lack of confidence, and sticking to your principles is extremely important. Only if one learns how to cut the noise out, deal with FOMO & maintain your Stop Loss or Target Price can one differentiate themselves as a successful trader compared to other novice traders — and a proper technical analysis course by a professional trading academy will provide the necessary learning experience through tailored sessions that are extremely crucial to building a sustainable trading journey.