Can Technical Analysis be used for long term investment? The answer to the question is, yes.
Technical Analysis and chart reading techniques can be used for medium term as well as long term investment.
In fact, Technical Analysis works better for long term investment than short term or intraday trading.
There are two ways to analyse a stock; fundamental analysis and technical analysis.
Fundamental Analysis is about studying the financials and other details of a company. The balance sheet, profit and loss statement, quality of management and its future vision, reading annual reports, understanding the sector and the competitors of the company that you intend to invest in.
Technical Analysis is all about charts, price action and psychology. What does the price say? If a stock is hitting 52 week high, why is the stock performing so well? If the volume has suddenly gone up and price has fallen, why are people suddenly selling the share in big numbers?
Candlesticks, chart patterns, trend lines, support and resistance levels can also be used to buy or sell shares at correct levels. Long term trends on weekly and monthly charts can be excellent indicators to buy stocks for long term investment.
Some of the words used above, might sound complicated. But trust me, it isn’t.
In the next one year or so, this website will guide you step-by-step in both fundamental as well as technical analysis.
You will learn to use moving averages, support – resistance levels and other indicators on the charts – to become a skilled trader or investor.
Whether you intend to invest for long term or short term, this website will give you the required knowledge and skill to confidently take your own decisions.