Introduction to Trading
Updated: Apr 18
Imagine Arush has just made hefty amounts of money and rather than spending that money he decides to make more money for himself. He decides to trade sneakers. Arush doesn't know the fundamentals of sneaker trading (sneakers are shoes) like when the company announces its new arrivals, how do they get hyped up, who are the promoters, and who is the end consumer but he is determined to make profits through shoe reselling. So, what can he do? Simply observe which shoes are attracting the highest amount of demands or supplies. Through analysing the prior trends of that shoe, he can make a decision regarding entering that trade (of a particular shoe) by using technical analysis.
Technical analysis is a way of forecasting the future price movements of a financial instrument based on its past price movements. It is used by traders, investors, and analysts to assess the likelihood of a specific asset's price movement. Technical analysis can be used in different ways: to make trading decisions or to predict market trends. Technical analysis is not based on any scientific principles; rather it relies on using data from the past to help predict what will happen in the future. Technical analysis can be used for many purposes including identifying trends, predicting market behaviour, and forecasting stock prices. Gradually we will study more about these patterns, trends, and how to identify them when to take entry and exit.