Top Five Technical Indicators to use

Top Five Technical Indicators are the best friends of a Trader

Technical analysis represents the sentiment of the market at a particular time period or during the stretch of a time. Technical analysis has been improving and adding in new things for its followers. As we have already discussed that technical indicators analyze the psychology of investors in a stock market, it is important to understand that dependence on one particular technical analysis indicator won’t be recommended at all. Here are top five technical indicators that can help ascertain the possible direction of the market.


The volume of a stock traded in a market speaks volumes for that stock. Volume shouldn’t be looked at in isolation. Usually, it has to be associated with the price in the market at that time. If you can tightly monitor and correlate the movement of each with the other, this can also help you in determining the probable course the market is going to take.

Top Five Technical Indicators are best friends of a Trader

Stock Price

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The Assumptions in Technical Analysis of the stocks

In technical analysis, we project the possible future trends based on the past performance of the stock. Since its inception, a lot of theories relating to technical analysis have emerged. Extrapolating past trends into the future are based on three simple assumptions in Technical Analysis. These assumptions are known as pillar assumptions on which all the technical analysis is based.

These three Assumptions in Technical Analysis are

1. Market Discounts Everything
2. Price follows trend
3. History Repeats itself

The Assumptions in Technical Analysis of the stocks1. Market Discounts Everything

The technical analyst assumes that the stock price of a company reflected on the stock exchange at any time reflects the true value of the stock. This means that the stock’s price has adjusted itself by incorporating all the information that could affect the price of the stock. So the price of the stock on the stock exchange reflects all the information affecting the stock in its price.

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Technical Analysis introduction

What is Technical Analysis?

In simple words, technical analysis can be defined as predicting the future price of a stock by looking at the past trends of similar stocks prevailing in the market. This includes analysis of the market data, price analysis, and the volume traded. The principles that govern the technical analysis are made by observing the stock market trends for hundreds of years. Technical analysts don’t look at the intrinsic value (the true value of the stock based on the assets owned by the company) of the stock, they look at the prevailing market factors determining the overall market sentiment. Another factor they look at is the supply and demand factors prevailing in the market. After careful analysis, they extrapolate these past and present trends to stretch them for future predictions.

Technical analysis depends mainly on mathematical calculations to reach these trend conclusions. Let’s have a look at a very simple example of how technical analysis helps stock marketers make key decisions regarding their investments.

Let us assume that Mr. A wants to buy a stock XYZ of company D. He talks to his broker about his interest in that particular stock. He then asks him for the advice. The broker looks at all the past trends for the stock XYZ and tries to establish patterns set by the stock. For example, he’ll look at the six-month performance in past, for instance how the price of stock started going down from January to June and in June it hits the bottom. After that, it started rising again and swelled to its maximum price in December. He’ll ask Mr. A to buy the stock at the end of June or at the start of July. He’ll also recommend Mr. A to sell the stock in December.

That was a typical example of stock technical analysis. The stock broker just looked at the stock’s price and its trends in the past. It gave him a pattern that particular stock has been following and helped him in advising his customer. Technical analysis of this sort is for long term investment. There are, however, very short trends analyzed as well. These trends may be of months, days, hours or seconds. Technical analysis can be done for any set of time. Tighter the timelines, tougher it will get for the analysts to predict with more reasonability and accuracy.

Technical Tools

Technical Analysis is used by Traders and investors worldwide for future predictions and for historical references. History repeats itself and this is what technical analysts believe. They look for chart patterns and make predictions based on technical tools. As the name suggests Technical analysis is an analysis of a security by means of some technical reasoning or tools.

Few of the tools are

Technical indicators:

  • Average Directional Movement (ADX)
  • Accumulation/Distribution (AD)
  • Average True Range (ATR)


  • Relative Strength Index
  • Stochastic Oscillator
  • Etc.

There are thousands of tools out there and traders are using them in millions of ways. A novice trader actually makes his first mistake here. He thinks more is better. He tries to learn each and every technical tool and hops on from one tool to another in search of a sure shot tool for success in trading. If you are in this position, let me make it clear.“There is no sure-shot tool and more is not good surely”. Like weather prediction, you can set probabilities, but you can never be 100% sure what will happen in future.

Where and how to learn technical analysis?

There are lots of online tutorials, reading materials which can give you a lot of information. Going thru all those without any guidance can be painful and you might feel lost and de-motivated after some time.

To cut the learning curve short, I would recommend that find a mentor or attend a professional trading course. You might feel that why should I pay when I can get all the information for free?

Trading is not like a simple math equation (2+2 =4), It’s an art and your tool is technical analysis. You might get the tools online, but you can’t be an artist without a guru. Self-experience is also a guru, but it would take lots of your time and effort.

I would recommend a book for learning technical analysis for both novice and experienced traders. It helped me a lot in becoming a professional Technical analyst. It will surely help you too. The link is given at bottom of the article.

Please buy it and feel like you are buying an asset. It is a small investment for your bright future.

Technical Analysis course

COURSE: – Technical Analysis course LEVEL 1  – Tenure: 32 lectures

Technical Analysis Course

Note: Please visit again as we are uploading all chapters gradually.For Educational Purposes Only

The Level 1 Course builds know-how of 6 basics of technical analysis:
1) Terms used in technical analysis
2) Various types of charting
3) Determination of price trends/basics of pattern exploration
4) How to find, price targets
5) Stock market analysis
6) Applying technical analysis to securities, currencies, derivatives

Chapters :

1   Psychology of Technical Analysis
2   Charts
3   The Dow Theory
4   Important Reversal Patterns
5   Important Reversal Patterns – Continued
6   Important Reversal Patterns – The Triangles
7   Important Reversal Patterns – Continued
8   Consolidation Formations
9   Gaps
10   Support and Resistance
11   Use of Support and Resistance
12   Trendlines and Channels
13   Major Trendlines
14   Trendlines in Action
15   Individual Momentum Indicators I
16   Individual Momentum Indicators II
17   Candle Charts
18   Elliott, Fibonacci, and Gann
19   Volume: General Principles
20   Volume Oscillators
21   Stop Orders
22   What Is A Bottom – What Is A Top?
23  Money and Risk Management
24  Advancements in Investment Technology
25  Choosing and Managing High-Risk Stocks
26  Not All in One Basket
27  Balanced and Diversified
28  Trial and Error
29  How Much Capital to Use in Trading
30  Application of Capital in Practice
31  Portfolio Risk Management
32  Stick to Your Guns

technical analysis Forum

Technical analysis forum

Forums are for like-minded people to brainstorm and help each other. Technical analysis forum is a good way to develop skills and enhance confidence in trading and stock markets. It gives a platform for individuals to discuss and troubleshoot their problems. They can be a teacher, student, mentor or guide. Anything they want. Technical call dot com also had a fully functionally and full of knowledge forum till 2015, Admins were caught up in life’s commitments and were forced to pause it. We hope soon we will be live again and hope will make a great forum like we used to.
Meanwhile, we are open for any volunteers If anybody is interested in taking over management of the technical analysis forum.We would certainly like to give those person chance.
If you are interested then please e-mail me (contact form)