From that last lesson we understand some basic about financial
market and technical analysis now let’s talks about some of brief about the
rules and its implementation.
First Market Discount Everything: In case Technical Analyst believe that the
current price fully reflects all the possible information like news, bonus
issue, dividend issue by a company which could affect the price and it is a
major criticism of technical analysis is that it only considers price movement,
ignoring the fundamental factors of the company.
Second History Repeat Itself: In case of Technical Analysis is based on
historical price movements of that instrument like if stock price
up during the summer time or in March to June most of the Technical analyst
believe that stock price go up during summer time now i will tell you about a
fact which actually how fundamental data are include in the chart or price,
Exp. suppose that company making air conditioner and refrigerator so in that
case its sales go up during the summer period so company making good profit
during that summer period and company quarterly reports comes with good profits
so in that case price of that stock will go up. Many more things like
chart pattern, candle stick pattern, price trend, supply and demand area are
repeat again and again by the time.
Third History Not Repeating Itself: In such case historical price trend or pattern
are not follow as like done in the previous so in cases try to follow some news
and fundamental of that company like how pear company doing and what are the
current news are coming for that particular stock, It is mixed up process of
staying in profit side in case of me i believe in Technical and charts but i
also follow the news and important event in the market.
Forth Trend Is Your Friend: Trend is going to be your friend during time of
trading in the market, if you find a right trend you are on the right
side like Exp. You find "X" stock price will go up in the future
so you buy that stock at 10 after some time that stock price go up at 15 so you
make profits in case but the big question is "how to find that right
trend? ". It’s completely depended on you how you see the charts or the
price and what tools and indicator are you using for trend define.
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