Technical Analysis Tips for the Everyday Investor (Part 1)

If you want to invest that cash which is sitting in your bank account earning miserly returns by investing in the stock, FX or commodity markets then read on to find out how you can increase the odds of your investment moving in the right direction. 

The majority of everyday investors invest in the stock market as a result of hearing tips from their buddies or brokers alike. The majority of people invest in stocks for fundamental reasons such as; they think a company will outperform forecasts or they recognise a company is launching an exciting new product. Whatever the reason may be, the everyday investor will take in this information and run out and buy that stock. We believe you can increase the odds of your investment working out by using some simple technical analysis skills. Technical analysis is simply the study of price action by way of analysing charts. Based on patterns in the charts, technical analysis helps people to predict future price activity and direction.

The everyday investor can use technical analysis to better time their entry into investments. By using the combination of investor’s fundamental reasons for thinking the value of a stock will be rising, along with some simple technical analysis techniques you can increase your odds of getting the investment timing and direction right.

The beauty of technical analysis is that by analysing the charts you can actually see in real time who’s winning the battle between the bulls and the bears. We use technical analysis to analyse the TREND of a chart which gives us a great indication of who the momentum in the market is with. You may have some very valid fundamental reasons for investing in a stock but there’s no point investing in a stock if it’s trading in a downtrend with the bears in control. What we would say would be, wait until that stock changes from a downtrend to an uptrend before investing your money. That simple change in the timing of your investment could save you allot of pain and money.

Analysing the trend of whatever product you may be investing in will add another string to your bow and increase the probability of getting your investments direction right. Keep an eye out for Part 2 of “Technical Analysis Tips for the Everyday Investor” coming very soon where we will show you how to analyse the trend so you can better time your investment entries.  

Happy Investing!

P.S. In the meantime, check out our weekly free webinars to start learning more about how we use technical analysis: www.tradewithprecision.com/freewebinars  

The TWP Team