Technical analysis basics explained for traders, students and investors.

1. Technical Analysis
Basics
Rishabh Surana

2. Definition
Technical analysis is a
term used for predicting
the direction of prices of
a stock through the
study of past market
data, primarily price and
volume.

3. Chart Showing Price History And Volume

4. History
Technical analysis dated back from 17th century in
Dutch and French markets. But where as in Asia,
technical analysis is said to be developed by
Homma Munehisa (Father of candlesticks) during
early 18th century which evolved into the use of
candlestick techniques(will be explained later in
detail), and is today a technical analysis
charting tool.
Later in 20th centaury many technical analyzing
tools were developed and many books were written
by several technical analysts to forecast the
direction of prices of a stock.

5. Continued…
The books written by few analyst have played a
significant role in doing the analysis which
includes In the 1920s and 1930s Richard W.
Schabacker published several books which
continued the work of Charles Dow and William
Peter Hamilton in their books Stock
Market Theory and Practice and Technical Market
Analysis. In 1948 Robert D. Edwards and John
Magee published Technical Analysis of
Stock Trends which is widely considered. These
books are a must read for a person who considers
serious learning of technical analysis.

6. Pioneers or so called pillars of
Technical Analysis…
1. Dow Jones (known for his famous Dow Theory)
2. Ralph Nelson Elliott (known for his famous Elliot wave theory)
3. William Delbert Gann (also known as W.D.Gann, famous for his
Gann fanGann wheel
4. Richard Wyckoff (known for his famous Wyckoff chart)
5. Bill Williams(known for his famous volume indicators)

7. Technical Analysis
V/S
Fundamental Analysis
The major difference between Fundamental Analysis (FA) and
Technical Analysis (TA) is, While fundamental analysts examine
earnings, dividends, new products, research and the like,
technical analysts examine what investors fear or think about
those developments and whether or not investors have the
option to back up their opinions; these two concepts are called
psych (psychology) and supply/demand(should consider very
important in TA). Analysts employ many techniques, one of which
is the use of charts. Using charts, technical analysts seek to
identify price patterns and market trends in financial
markets and attempt to exploit those patterns.
a. Price Pattern
b. Market trend

8. Candle Stick Explained

9. Graph Time Resolution
Daily - 1 candle = 1 day
Useful for analyzing short term trends
Weekly - 1 candle = 1 week
Useful for analyzing intermediate term trend
Monthly - 1 candle = 1 month
Useful for analyzing long term trends

10. Trend – The Direction Of Prices

12. Golden Rule Of Technical Analysis Trading
TRADE WITH TREND

13. Understanding Support And Resistance

15. Retracements

16. Continued…

17. How Should We Trade

18. Understanding Good/Bad Trade