1.1 – Introduction to Technical Analysis
Technical Analysis (also abbreviated as TA) is a popular technique that allows you to understand the risk and rewards involved while taking a trading decision. It helps you develop a point of view on a particular stock or index and enables you to define the trade, keeping in mind the entry, exit, and risk in perspective.
Like all research techniques, TA also comes with attributes that can be highly complex. However, technology makes it easy to understand. We will discover these attributes as we proceed along with this video series.
Let’s move on to the following video, where we set our expectations when we trade based on TA.
We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.
Key takeaways from this chapter
- Technical Analysis is a popular method to develop a point of view on markets. Besides, TA also helps in identifying entry and exit points.
- Technical Analysis visualizes the actions of market participants in the form of stock charts.
- Patterns are formed within the charts, and these patterns help a trader identify trading opportunities.
- TA works best when we keep a few core assumptions in perspective.
- TA is used best to identify short term trades.