Technical trading is a broad style of stock market trading. Fundamentally, a trader uses archival patterns of trading data for predicting the future and nature of stocks. Technical analysis of stocks is a trading discipline implemented for evaluating investments and identifying trading opportunities by analysing statistical trends accumulated from trading activity, such as volume and price movements. In this article, we will explore the basics of technical trading and provide you with curated lists of webinars and technical analysis course that will give an edge to your technical trading.
Exploring Technical Trading
In technical trading, traders chiefly focus on stock chart analysis and graphs. Traders watch lines on the index or stock graphs for signs of divergence or convergence that indicates buy or sell signals. Technical trading employs technical analysis. Technical analysis tools are employed to scrutinize the ways demand and supply for security will affect changes in volume, price, and implied volatility. By pairing price changes of a security and past trading activity with appropriate investing or trading rules, it assumes past prices and trading activity is a valuable indicator of future price movements.
The challenges of stock market technical analysis, in part, stem from the fact that there are hundreds of indicators available, and there is no specific single indicator that is universally considered better than any other, as each individual indicator or group of indicators may be relevant only under specific circumstances. Some technical indicators may be ideal for certain industries, and other indicators only for stocks of a certain classification (example, stocks and securities within a specific range of market capitalization or liquidity).
Below, we have discussed the most useful common groupings of technical indicators that technical traders use for predicting the future of individual stocks.
- Relative Strength Index (RSI): This indicator measures the recent performance of a stock in relation to its historical strength by contrasting the magnitude and number of historical and recent up and down closes. If an RSI increases above 80, then this is an indicator of overbought condition, and if the RSI is below 20, then this signals oversold stock, which is an indicator of buying.
- Range Trading: A series of low, high, and closing prices are plotted or marked on a graph for a specific period of time, and resistance and support lines are drawn across the top and bottom of the range. When the price undergoes a movement, a breakout occurs, above or below the range, even for a single period or two.
- Pattern Analysis: The price charts discussed earlier are analysed for distinct patterns that have appeared earlier in the same stock or for habitual patterns that have been observed in many stocks over time. The commonly observed patterns are cup-and-handle formation, head-and-shoulders pattern, rounded bottoms or rounded tops, triangle-down or triangle-up patterns, and so on.
- Gap Analysis: A gap comes about when a stock’s opening price is significantly lower or higher than its closing price the former day, possibly because of company news released overnight or some other significant factors. A gap trader looks at the performance of the stock below or above its open, which might indicate further movement in one direction or the other.
- Trend Analysis: This is a complex mathematical technical trading indicator. It looks at short-term as well as long-term trends and tries identifying crossovers, where stock price crosses over its long-term average. The long-term average is generally referred to as moving averages, where a series of data points are averaged over a time period, and the smoothed line is plotted against the actual price line for a stock.
Prime Technical Analysis Courses and Webinars for holistic learning
Technical analysis can be applied to any type of security provided with historical data. This includes stocks, commodities, futures, currencies, fixed-income, and other types of securities. In reality, the prevalence of technical analysis is far more in forex markets and commodities, where traders chiefly focus on short-term price movements. Hence, it will be perfectly right to say that technical analysis has a wide usage and is popularly used in capital markets.
Being a technical trader can bring you high incomes and maximised profits. This can happen when you have the right knowledge base and know the intricacies of the trading type. When you apply your knowledge to practice and gain profits, that is the ultimate goal. Just gaining knowledge should not be your goal rather, knowing how to aptly apply your knowledge in real-life trading is the trick.
Elearnmarkets, a financial e-learning platform, brings forth a multitude of stock market trading courses, and webinars that will provide the learners with a comprehensive and holistic understanding of technical analysis in stock market. We have curated top 5 courses and webinars for you that is going to leave a noteworthy mark on your technical trading style.
- Top 5 Courses on Technical Trading and Analysis
- Technical Analysis for Everyone
This is a full-scale technical analysis course. It profoundly covers different facets and technicalities of technical analysis in a lucid and structured manner. On completion of this course, you will be able to make wiser and more profitable trading decisions. This course covers topics such as Candlestick Analysis, Classical Price Patterns, Indicators and oscillators, Gap Theory, Heiken Ashi Candlestick & Trading Strategy, Fibonacci Analysis, and so on.
This is a jointly certified NSE Academy and Elearnmarkets course. This course provides you with a comprehensive understanding and master the skills of intraday trading. This is the best intraday trading course as it enlightens its learners with the contemporary volatile nature of the stock market and teaches them various techniques to successfully deal with the volatility and invest successfully. This course has been designed after a conscientious review of the stock market behaviours and volatility.
It covers a wide range of topics such as Philosophy of Technical Analysis, Basic concepts of Trendlines Support and Resistances, Head and Shoulder and Inverse Head and Shoulder Patterns, Double Top and Double Bottom Patterns, Bullish and Bearish Rectangular Patterns, various Candlestick patterns, ADX, RSI, Bollinger Bands, Trading Psychology, Money Management, and Fibonacci and Markets.
- Candlesticks Made Easy
This course is completely devoted to candlesticks patterns. Candlesticks play a pivotal role in technical analysis for determining plausible price movements based on past patterns. Additionally, traders can determine whether the market is bullish or bearish, can also spot trends and market reversals. The topics covered in this course are Identifying Pattern, Hammer, Inverted Hammer, Bullish and Bearish Harami Pattern, Bullish and Bearish Engulfing Pattern, Tweezer Top and Bottom, Dark Cloud Cover, Marubozu, Doji, and other crucial candlestick patterns.
- Technical Trading Made Easy
An individualized trading course designed for learning a robust trading methodology. It focusses on trading techniques and strategies in the stock market, with efficient risk and money management. The primary objective of this course is to develop an understanding of trading tactics, trading psychology, trading patterns, and money-making strategies. This course is an optimal blend of theoretical knowledge and practical expertise in trading.
- RSI Made Easy
As already mentioned, RSI is an essential and crucial technical indicator widely used in technical trading. This excellently-designed course helps participants gain a comprehensive understanding of the basics of RSI indicator and then teaches them Six Model Trading strategies (both intra-day and swing trading) using RSI indicator as a combined indicator with a number of other indicators. The topics covered in this course are Basic Concepts and Calculation of RSI Indicator, Divergence and Reversal trades using RSI Indicator, Buy Side and Sell Side Technical Strategies using RSI Indicator, and Trading the RSI 45-55 Band.
- “CPR Saves Trades”- A Multi-timeframe Approach
Central Pivot Range or CPR is a leading indicator of price action trading. When a trader uses CPR indicators, price action becomes easier, and one can be successfully if he has a thorough understanding of price movements in all the timeframes. Price accompanied by CPR indicator gives the best probable direction. This webinar will help to understand the major role of CPR indicators in multi-timeframes for understanding the market trend, and pro traders’ basic approach towards the selection of trade.
- Using RS More Efficiently: A Step Ahead Mastering Tendulkar Way
RS is used in momentum investing by investors and traders for the identification of value stocks. This strategy focuses on stocks that have performed well relative to themselves in the stock market over time or have achieved a benchmark over time. The main aim of this strategy is buying high and selling stocks even higher. In this webinar, participants will learn how to use CRS and RS effectively. Moreover, participants will also learn to decode VIX, optimize demand and supply understanding, and understand sector analysis.
- Moving Average Strategy for Intraday Trading
Moving averages in used in technical analysis for capturing the average change over a time period in a data series. The most popular and common application of MA is identifying trend direction and determining support and resistance levels. In this webinar, participants will learn how to use technical indicators and charts for sorting out anticipated high momentum movers, stop loss and target management, and how to execute a trade.
- Path-Breaking Golden Swing Strategy
A swing trading strategy with a high success rate is essential for traders who cannot be involved in stock trading for the entire day. One may only have the opportunity to trade a particular stock 2-4 times per year when Golden Swing is set up. The analysis is done end-of-day basis and should be applied in daily, and hourly timeframes. This course will allow participants to learn definitive stop loss and target with a 1:2 risk-reward ratio, and system-based approach.
- Trading Pullbacks with ADX and RSI
Trading pullbacks are risky and tricky affairs as not pullbacks work. Traders have to be very cautious about it. With Price Action combined with ADX and RSI, participants will be able to increase the Probability of Success when trading Pullbacks by using rule-based trading. Participants will also learn the zones to trade pullbacks, and risk management and entry exit principles.
Conclusion
As the financial year is going to end soon, one must think of the various way to employ their funds in significant areas. With the beginning of new financial year, a trader must be ready to maximize his earning and use his money efficiently. Therefore, Elearnmarkets is offering a 35% discount on all self-recorded stock trading courses and webinars till 31st March, 2022. So, why wait anymore? Pull up your socks and take a dive into the sea of financial knowledge.
