Advantages of the Technical Analysis

Technical Analysis
Technical Analysis

The technical analysis is a main guide for millions of investors around the world, who depend only on history and the theory of its repetition to predict the future price movement of a particular asset. According to technical analysts, the market movement takes into account all these factors. They are already in and are reflected in the graphics, so the investors do not pay attention to fundamental factors that could affect the price of an asset. One technical analyst could always explain what have happened, observing the graphics of an asset price in a historical plan.

Others, however, think that the technical analysis is for people with screwed fantasy that cannot predict the future with a higher certainty of 50 %. Actually this percent could not be bad if we consider the amount of the successful traders, who rely on technical analysis in any of their varieties.

Fortunately, the price has only two directions – up and down. When a technical analyst predicts what will happen, he always leaves a loophole for another option. In this way the technical analysis works flawlessly. When the graph is already drawn, i.e. we do not talk about the future, but for the past, then the technical analyst will make you a professional analysis of the reasons why it did happen so. However, even the bitter opponents of the technical analysis agree that it is actually useful  and a trader who knows it well can easily take benefits from it. At least it outlines the mass investor psychology and it can give good points of entry and exit for a position, based on what everyone would see the graph.

The fundamental analysis itself may outline some directions, but unfortunately, it does not give good entry points and oftentimes, even if you hit a direction, but do not hit the market (a suitable entry), you will fail.

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