What is technical analysis?
Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends. Gathered from trading activity such as price movements and volume.
What is trend ?
A trend is the general direction of a market or asset’s price.
In trading TREND IS YOUR FRIEND always trade in trend’s direction so that you can easily get 70to80% accuracy, even you if you have 60% win ration than it is enough to make money in share market. If you will trade in trend’s direction than definitely you will achieve this win ratio easily.
* Never predict the trend, only follow the trend.
* Never trade against the trend.
*trend is your friend.
In the stockmarket 95%lost their money when they trade against the trend. If you want to stay in a market and want to make healthy wealth than understanding trend is very important, so let’s learn about trends and learn how to identify the trends..
Types of trend
A stock market go through 3 types of trend no matter how you look at it, the market moves in trends and they repeat it again and again.
3 Types of trend
* Uptrend
* Downtrend
* Sideways Trend
UPTREND (Bull market)
It is very is to identify stock that is in Uptrend
“When stock moving in uptrend, stock will make higher high and higher low and continue to repeat it again and again.
And the stock will move above the 20, 50 and 200 Day moving Average most of the time .
Downtrend (Bear market)
It is also very easy to spot a stock that is in down trend.
When stock is in down trend stock will break support and make lower low and lower high hqne continues to repeat it again and again.
The stock is below its declining 20,50 and 200 moving average most of the time.
Don’t buy stocks which are in downtrend and if you are investing in this types of stocks you are more likely to lose money.
Sideways trend
When you find the stock trade within a range are called sideways trend
The stock usually zig zag between the moving average.
Don’t trade in this types of stock because this types of stock can change its trend anytime.
Always make watchlist with your favourite stocks and when they start moving in uptrend get entry and exit when downtrend.
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