The use of technical analysis in the stock market

The financial crisis that has affected world economies, and subsequently, contributed to the crash of stock markets across the world, has brought severe losses to millions of investors and traders. Indeed, it had been a jolly ride for them for several years until the financial crises in 2008. Investors, before the stock market crash and financial downturn, were ready to make investments of millions of dollars in the stock market as well as commodity markets.

When ultimately the markets crashed in and fell like a bundle of cards, their dreams, hopes and fortunes were thrown up for no gains. It was really a shock that had taken over worldwide investors and traders simultaneously, and all of them have had their fingers burned due to the collapse of stock markets. It was really a tough lesson that they learned since most investors and traders up to that point were simply based on stock tips. They were also picking up the wrong shares and funds, and investing heavily, then forgetting for a period of time, only to ultimately realize that many of their precious investments have turned to rubble.

This made many investors and traders to very well make the decision not to turn back to the stock market, even if things in the worldwide markets become normal. But it is really a wrong decision because such a set of beliefs can lead them nowhere. It should be kept in mind that to be very successful at the stock market, traders and investors have to become very intelligent and aware of technical analysis, a common practice of stock market experts and also successful investors and traders alike.

By practicing technical analysis and applying it to the various shares and portfolios, individual investors and traders will be able to know the trend of their respective shares. This will, to a large extent, help them to make successful investments and also safeguard their investments in the case of bad performance of company shares. Thus, technical analysis has been a marketing tool which has been used by stock market traders and investors for several years, and has helped them to find success in their transactions with regards to stock market dealings.

Hence, for an average investor or trader, it is better to first understand the nuances of technical analysis and then go forward to make successful strategies of trading in the share market. Devotion and drive for knowing the techniques concerning the stock market will take one well ahead, and ensure success in many of their investments and trade dealings.

- Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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