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What do swing traders look for? – Swing Trading Strategies For Beginners Free Book

Winding up the series on the importance of technical analysis, I’d like to ask some of the more common questions people have asked about technical analysis:

What’s the difference between a technical analysis analysis and some sort of market-moving “fundamental” analysis, such as an earnings model?

Do technical analysis models tell you which direction the stock market is headed in?

Should you be taking risk in a technical analysis model?

These are great questions to start answering after reading the previous parts of this series. If you’re just beginning to get into technical analysis, I suggest starting with A Practical Guide to Trading Technical Analysis and Moving Averages—which both are available on our website. However, for our purposes, it’s best to focus on the basics of technical analysis as outlined in The Stock Market and Technical Analysis.

What is a technical analysis?

Technical analysis is a method of trading that uses technical analysis models to identify trends in the prices of stocks and other investments.

A technical analysis model is a model that predicts the behavior of markets, using information about stock prices (e.g., price/bookings ratio, number of daily transactions) to generate a set of forecasted price changes. For example, a technical model might forecast the following:

Price will jump

Price will fall

Price will stay the same or be higher

Price will stay the same.


For the sake of this discussion, let’s look at some examples of a technical analysis model:

Price will rise

Price will fall

Price will stay the same or be higher

This first example shows you that, in general, a technical analysis model uses a set of variables as predictors of the price pattern of a stock. For example, in the first example, the Price will increase to $16/share, which will cause the price to climb to $17.05 (i.e., be up) and then fall to $17.05/share.

The first example in the example has several important characteristics:

Price will increase

Price will fall

Price will stay the same or be higher.

Trading Bible for Beginners: This Book Includes: Stock ...
To determine the price trends in the examples, you can use the following steps:

Open a Technical Analysis model (e.g., Price will increase to $16/share. Create an index of a random stock. Choose one of the 30 most expensive stocks on the market. Create a chart using

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