Volume Indicators Quotes

In many references you may find the definition of "Technical analysis" as study of the price movements with a purpose of predicting possible trend development. In reality it would be correct to say that Technical analysis is the study of stock/index or any other financial commodity movements with the purpose of predicting possible future trend direction which is based on the history analysis.

As you know stock/index or other commodity movement is always described by the change in price, trading volume during this price change and change in volatility. In addition an index movement is described by the number of advance/decline stocks and by advancing and declining volume. It would be wrong to state that technical analysis is an art of price analysis only and be focused only on the price. By looking solely at price, a trader's vision is limited and this trader cannot see the basics processes that describe the cause of the price movement. That is why price, volume, volatility and advance/decline data has to be analyzed in harmony. Only complete analysis of stock/index movement can provide complete picture of this movement and could be considered as liable source for making a trading decision.

In technical analysis you always compare current action to the history. Even when you do not think about that your trading decision is based on the history analysis. If you trade MACD histogram on its crossovers with zero line, you do it because from the history analysis you know that this is good entry/exit points. You always use historical research results of professional analysts who developed technical indicators. You always look at the history to check what indicator settings works the best.

Below you may see a few Technical Analysis Tips that could help in starting your own analysis:

• Technical analysis is not an exact science. Technical analysis does not give any guarantee in future trend direction. It takes time and takes considerable experience to master several technical indicators.
• Technical Studies are the main tools in technical analysis. Technical indicators are used to describe price, volume, volatility and advance decline data changes. They allow receiving mathematical model of the stock, index or other financial commodity movements and compare them to the similar movements in history. Not all studies work the same and depending on a traded security different technical indicators could be selected. It is responsibility of each individual trader to find set of technical studies that would fit his or her specific needs. One study may generate excellent buy and sell signals while another may not work for you at all.
• Charts are the main tools that allow analyzing and monitoring technical studies. Majority of active investors (who make a trading decision) use charts. This is the best tools to analyze, test and monitor traded security.  Majority of retail and institutional traders use charts in their technical analysis and base their trading decision on signals generated by technical studies on the charts.
• There are no bad technical indicators. With most indicators it is possible to detect buy and sell points. The problem could be in the implementation. Some technical indicator may require to be adjusted every time the longer-term trend changes or volatility level changes.
• If you trade in real-time you have to analyze and monitor data in real time. If you do not trade in real time it still recommended to study charts on daily basis. Stock market is constantly changing and if do not track charts you may miss important changes that may dramatically affect your portfolio.
• Technical analysis is only a beginning. Technical analysis provide you with the source for making a trading decision, however, this is p only. You have to develop market timing trading strategy: you need to know what to trade, how much to invest into a trade, how much commissions you will pay, when you should fix profit, what to do if price goes in opposite to the trade direction, etc.
• Do be careful with free advice from internet and media sources! Majority of media news are negative. This is a job of media reporters to find something bad, something negative and scandalous about person or company. People like to see it and that what media sells. In addition they give you facts after they happens. So, do not base your trading on the TV news... If you trade and if do your own analysis! At the end it is your money on the table!
• Te current technology gives you access the professional tools that before was available to institutional traders only. Be sure that you have all data you need - price, volume, volatility, advance/decline data, etc. Otherwise you could be behind of other traders and your portfolio could become food for other successful professional traders.

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