If you are looking to really learn how the stock market works, then you need to understand what Technical Analysis is!

Most training courses available focus on Technical Analysis.

What is Technical Analysis?

Technical Analysis is the study of supply and demand in the stock market, by comparing the history of stock price movements and volume (the number of shares traded).  Understanding the way the price moves in relation to the Open, High, Low and Closing Prices on a given minute, hour, day, week or month and comparing that to the volume can give an insight into future market direction.  The data required is usually displayed in a Stock Chart so it is easily consumed.

The science / art of technical analysis usually falls into different areas of study:

• Supply & Demand – Stock Price Movement vs Volume
• Trend Following – understanding what trends are
• Waves & Cycle Analysis – understanding how markets move
• Stock Charts – Price – plotting price in charts to understand the history of the Stock, Share or Market Index using Bars, Candlesticks or Point and Figure Charting.
• Trend Interpretation – Drawing Trend Lines – Support and Resistance Lines
• Price Indicators – the study of price based chart indicators or Oscillators know as Stochastics,”Relative Strength Index” (RSI), “Rate of Change” (ROC), “Moving Averages” (MA), “Moving Average Convergence Divergence” (MACD), Parabolic SAR, ADX Average Direction Movement Index.
• Study of Volume – understanding how the level of volume has a relationship with price – and how price has a relationship with volume.
• Study of Price Volume Indicators – “On Balance Volume” (OBV), Chaikins Money Flow, “Time Segmented Volume” (TSV), MoneyStream.
• Market Sentiment – understanding the madness of crowds

What are the Positives Of Technical Analysis Courses

If taught correctly they can help your understand one side of the stock market equation.  This is the “effect” part of the cause and effect equation.  Technical Analysis Studies:

• the What – What has just happened
• the Effect – Not the cause
• the Market Action – what is happening “real time” at the moment
• the Price
• the trends

What do you need in addition to Technical Analysis.

Most stock market training courses focus exclusively on Technical Analysis, this can be misleading.  I support technical analysis and am myself a Certified Technical Analyst, however having only an understanding of technical analysis can cause problems for the trader or investor.

To be successful you need to understand the following topics in addition to technical analysis:

• Economic Health & the Business Climate
• Company Fundamental Analysis
• Risk Management
• Portfolio Management
• Tracking Trades
• Creating a system
• Psychology

Summary

Combining the best of technical analysis and fundamental analysis with good risk management, portfolio management and money management is the best mix for a winning trader.