Technichal analysis
In 1970, after revolution of computer market totally shift from fundamental analysis to technichal analysis. Basically markets works on price, volume & time. There is three basics important things live in the market.Intially trader community didn’t accept technichal analysisas viable tool for making money until late 1970s or early 1980s
A finite number of trader participate in the markets on any given day, week, or month. Many of these traders do the same kinds of things overe and over in their attempt to make money. In other words, individually develop behaviour patterns and group of individuals, interacting with one another on consistant basis. From collactive behaviour patterns.
Technichal analysis works on traders and investor ‘s time mannner view based on minuts, days , weeks & months. It is mirror refelection of fundamental view. Trader trading their money based on technichal and use it’s component like candlesticks , charts pattern, indicators , price actions , and time management. They making stratagies or finding stratagies which is made by other trader and use it for making easy money from the market. This is facinating things which attract most of pepole whose think they make easy money from using of technichal analysis. But is it really easy making money from the markets? Now a day’s 90 % trader trading their money through use of technichal analysis but the success ration is very doubtful how many people successs among them and making mnoney ? For market we can say it’s very easy to earn money through using hardest way. Wall street and most of the major funds and financial insititutaion thought that technichal analysis was some form of mystical hocus- pocus.
Fundamental analysis
Who remembers when fundamental analysis was considered the only real or proper way to make trading decisions? Let me explain . Fundamentak analysis attempts to take into cosideration all the variables that could affect the relative balance or imbalance between the supply of and the possible demand for any perticular stock, commodity, or financial instruments. Using primarily mathematical models that weigh the significance of variety of factors like interest rates, inflation data, income statment, balance sheet, cash flow statement, wether patterns, financial ratios and numerous others.
Mostly investor invest their money use of fundamental analsis because investor have bulk of time so they need only better forecast on financial instruments
Why shifting to mental analysis ?
If technichal analysis works so well, why whould more and more of the trading community shift their focus from technichal and fundamental to mental analysis of market ?
That’s problem with technichal analysis, if you want to call it a problem once you learn to identify pattern and read the marketand you find there are limitless opportunities to make money. But there is very huge gap what you understand about market and your ability to transform that knowledge into consistenet profits that’s can psychology gap.
Market is totally conect with you bilogical nature like your ego, angryness, agression, greed, fear and envy etc. Confidence and fear are contradictory states of mind that both stem from our beliefs and attituds. You have to develop risk aversion technics in your self . There are two choices : you can try eliminating risk by learning about as many market variables as possible that is path of frustration, rationalizing, justifying, hesitating, hoping, and jumping the gun or you can learn how to redefine your trading activities in such a way that you truly accept the risk and you are no longer afraid.
As beginner stage everyone run behind making money, stocks, stratagies, technichal and news/rumors but markets success is only in your psychology and metal analysis. This is the core disciplined system and trader must develope in their mind.
