Why Technical Analysis?
Using Technical Analysis is the best way to invest in the market. There are many reasons why technical analysis works great.
Technical Analysis is the best way to invest in the market. It allows you the ability to cut your losses short and let your winners ride. There are many other reasons why technical analysis works great.
1. It allows you to go after short term gains. Because of the effect of compound interest short term gains have gain popularity. If you can gain an average of 3% a month you can do better than someone who makes 40% annually n their money.
This makes short term gains the fastest way to grow your money.
2. It can allow you to make longer term gains if you wish. Not everyone likes to go after the short term stock movements. Some people want to buy a stock and hold it for many months to even a few years. Technical analysis can be used to find the best buy and sell signals for multiple time frames.
3. It allows you to cut your losses short and let your winners ride. Because technical Analysis uses support and resistance lines it easily allows you to find good spots to place targets as well as lets you figure out when it is just time to exit the trade for a small loss.
4. It allows you to play on people’s emotions. People are what really drive the market up and down. When someone buys a stock they are aiding in pushing it up. That is evident to anyone who actively trades the market.
5. It allows you to test and improve your strategy in a shorter time frame. If you are a longer term trader you might not know whether your strategy for finding long term stocks works until decades go by. Whereas short term trading allows you to find out at a relatively fast rate how you can improve your strategy.
All these reasons make technical analysis a great way to make money in the stock market.
For more information on technical analysis visit http://www.stocks-simplified.com/technical_analysis.html
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ABOUT THE AUTHOR
When I was young I wanted to learn how to trade the stock market. So I traveled around the country listening to professional traders talk about how they are making money in the market. After trading for a while I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn.