Technical Analysis doesn’t have any particular procedure to follow up, basically it is a examination or analysing of stocks on the basis of it’s price and then relating them to various patterns, trends and theories as well as some worthy indicators.
All these things helps to examine stocks and makes easier to take decision on any particular stock or index, some theories which are quite popular and provides a base to technical analysis are namely as The Dow Theory and Elliot Wave Theory.
Technical Analysis began in Dutch Markets in 17th Century.
Popular Methods of Technical Analysis
Some of the very popular methods of technical analysis includes the theories listed above and some indicators like:
- New High and New Low Indicator
- The Rate of Change (ROC) Analysis
- Price Vs Volume
- The Dow Theory
- The Elliot Wave Theory
- Moving Average Convergence/Divergence (MACD)
Methods for Determining Stocks to Buy or Sell
To take the final decision of buying or selling any stock on the basis of technical analysis one should follow these methods of technical analysis to take such decisions.
- Chart Pattern of Individual Stocks
- Use of Moving Average
- Use of Price Volume chart for that particular stock
Above listed methods will help you to determine your decision of buying or selling particular securities as chart patterns will help you to determine the pattern of that particular stock where as moving average will help to determine what to do with that stock and Price volume chart helps to confirm your decision if that chart is positive for your decision.