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by Das Brain
When trading in the financial markets, whether its stocks, options, foreign exchange or commodities knowing when to buy and sell, obviously is the key to profiting and also the key to avoiding losses. To know when to buy and sell financial instruments, you must as a trader or investor look at charts and know how to read the charts using “technical analysis.”
It doesn’t matter what time timeframe you are trading, whether you are a long-term investor or a day trader technical analysis is a skill that will more likely help than hurt your trading. Anyone who goes into trading without learning and knowing technical analysis is as the title of this post suggest “Flying A Plane With Eyes Closed” and is most likely going to crash and burn.
In addition to price action, you can configure a charting software to show trending indicators or oscillator type indicators. Both trending and oscillator are tools that can help you as a trader or investor determine the direction and the turning point of prices for financial instruments such as stocks, currency or commodity futures.
I’ve known individuals who tried to swing trade and day trade without using charts at all, and to put it frankly they didn’t do very well. They were trading based on fundamentals, and how much they like the company, but did not know whether the timing is right, and jumped in anyway. This method is a crap shoot method, but technical analysis or knowing how to read charts and use indicators will give you a more calculated plan, where the odds are more in your favor.
If you plan to get into investing, or more short-term trading take the advice of this post and read and learn about technical analysis. The knowledge will greatly benefit you and improve your trading prowless.
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