Technical analysis of stock in a nutshell .
We all know that technical analysis is a proven method for over a century to analyze the stock market and stocks or any securities traded in financial markets or exchanges. Stock market attracts the majority of people because it’s a game where money can be made.
Because of many people’s very interest in making money, as explained in the preceding paragraph, it does not mean that anyone playing this game will make money or lose money. Still, one, most of the people trying their luck in the stock market will eventually fail. If you analyze, there are two sides to a coin. One may view it as a risky proposition as 95% of people venturing into the stock market fail. In comparison, the remaining 5% (winners) view it as an ample opportunity to rob the bank account of 95% of people who are here in the stock market to fail.
Buyers and sellers as market participants .
Let’s understand the #basics first before terming the stock market as risky or a place of #opportunity in #abundance. We all know that stock exchanges create a market where ‘buyers’ & ‘sellers’ come to quote the price of various listed scrips on these exchanges and complete their transaction according to their quoted price. Is this so simple? Buying and selling are as simple as this. They hardly consume time for transactions these days because of online trading platforms. Let’s understand what buying and selling means in the following para.
It is essential first to understand that the stock market is a ‘Zero-Sum’ game. What does it mean? Let me explain this for better understanding, even for even #beginners. Once one decides to buy a share/stock, it’s quite apparent that he/she is #bullish (A buyer expects the price to go up). At the same time, he/she is buying a particular scrip/share because someone is there to sell at that price which means, the seller is anticipating a fall in the price. This is all about the expectation of traders (buyers & sellers).
Finally, one of the two buyers or sellers will prove to be wrong in times to come because the price will either go up in favor of the buyer or fall to see a smile on a seller’s face. This explains that the stock market winner gets equivalent money that loser has lost, and hence it is a Zero-Sum business.
I am not here considering the brokerage or other minor costs like GST. Still, the emphasis is that winners get rewarded against the failure of losers in the stock market. In other words, the stock market is an authorized mechanism to rob the bank account of losers by winners. I am sure…you got it now…..In the following paragraph, let me explain how the stock market is a place where opportunities exist in abundance if you are on the right /winning side.
Just imagine #billions of #dollars or #INR or #Euro worth stocks being transacted daily on stock exchanges, and 95% of losers’ money gets shifted to winners and distributed among 5% winners or even less. Is this not a huge opportunity? Should an individual not think as to how I can be on the winning side? One thing is now sure that there is opportunities in abundance in stock/commodity or Forex markets, and the only #challenge (probably challenging challenge) is to be among 5%. Is it easy? No, I will not say for a moment that it is easy. Is it possible then? Here, I would enthusiastically say that it is 100% likely for those who #desire to be among 5% and ready to do whatever it takes to attain this challenging goal. Of course, burning desire is the first step to take on the right path to reach the desired destination among 5% winners in the stock market. So, are you ready? I mean, you are prepared to know more only when you wish to see the secret of winning in the stock market. Let me go ahead to explain further to trigger your mind.
One day, i was sitting and thinking about why people attempt to do #engineering or #medicine or #law or #management #courses? The simple and obvious answer that comes to mind is that people desire to learn to build #career and #earn money. Am I right in thinking so? Then I further put myself on the wheel of analysis that when I was doing engineering graduation during 1977-1982, I spent five years in the engineering institute to learn to engineer. Then I passed out in 1982 with #distinction and became an engineer. Did I become a practicing engineer? It was a big question mark. Soon after passing engineering, I got selected for Govt of India enterprise clearing all India selection process. Did I become now a practicing engineer? I thought I did because I got the designation of an Engineer in the most significant corporate house owned by Govt of India enterprise. However, my belief in becoming a practicing engineer got shattered when I was posted in the field post-induction program. I could experience translating theory (which I learnt in engineering institute) to practice was not that easy. It took at least three more years to be an engineer where my seniors played a significant role to #mentor me to become a practical engineer because they all had similar experiences in their initial career.
Why do I want to take you through my career in the initial days? The reason is straightforward. Learning theory & then translating theory into practice also takes time in the stock market because it is also a profession like any other. Let me #caution you here. #80/20 rule applies everywhere. All the institutions in the world, on average, produce 20% right practicing professionals in different fields. Does this mean that educational institutions are failing to perform? No, i never told you that. I said 80/20 rules apply everywhere. Thus, 20% of professionals produced by various educational institutions contribute 80% to building a #nation in their chosen fields. In other words, competition is far less than we think. Is it not so?
In the preceding paragraph, I shared that trading or investing in the stock market as a profession is no different. If we do not learn, we are almost sure to be among 95%. Still, if we know the subject, there is a probability of being among 20% successful professionals (80/20 Rule) of the stock market and finding our place among 5% winners. Is that sound, right? Of course, it sounds very sound because there is ultimately no substitute for learning. It is like #learning to drive the car. If we start driving a car without learning, one thing is sure that we will meet an #accident. Does this mean we do not have an accident when we go after learning? I never told this way, but I am sure that an accident’s probability almost becomes negligible.
Why do most people not take it up learning all about the stock market as a career option? The answers are two;
1. Our brain has been trained to learn & earn while emphasis has never been given to understand how money makes money for you, which means you don’t work, but money works for you. This has been well explained by the book titled ‘Cash Flow Quadrant’ by Robert T #Kiyosaki (Founder of Rich Global LLC & the Rich Dad company)
2. There is a shortage of structured learning programs for the stock market.
Now, I have given enough thoughts to trigger your brain, and if you have the desire to learn to be armed with #knowledge & #skill with a clear goal in mind to be among 5% to rob the bank account of 95% through official means called #stock market, following are simple steps that you can adopt. Your burning desire will back you to attain the desired goal to be successful.
1. Let us understand the subject logically first. Prices of stocks move up or down. The question only arises about finding when the price will go up and when it will fall? Let me take you to school days to learn that #demand & #supply decide price actions. If demand is more than collection, the price will go up, and when supply exceeds demand, the price will fall. It is that simple. Does this narrow our focus on how I can find demand and supply aspects of a particular stock? The good news is that enough research has been done the world over in these aspects where one can find demand and supply zones through #price actions & price #patterns on price #charts of a specific stock. Such study is called ‘Technical Analysis,’ based on initial reviews/observations made by Charles M #Dow in 1900, who was the founder-editor of the Wall Street Journal ( #WSJ ). In those days, such studies were very complicated. With the advent of computers and software/#ChartingTools, data on price charts are available in real-time seamlessly from exchanges, which has made the task very simple. The only thing that now remains is learning the art of technical analysis on price charts besides methodology to apply risk & money management to minimize the accident causing loss while trading in the stock market to be #consistent winner. So, learning technical analysis becomes the second step towards our goal (the first step, of course, is burning desire within the learner).
2. Now, you have a burning desire to learn and know the topics (#TechnicalAnalysis) to be learnt. Now, it bothers me where I can understand when there is a shortage of structured programs. Also, suppose you are in major cities. In that case, there might be various programs available on technical analysis, but you must pay a hefty fee. Suppose you are from small towns or even tier two cities. In that case, you have to spend more because the additional cost (in addition to the course fee) will impact you in travelling & lodging to significant cities where such programs are conducted. Do you think I am discouraging you? Not at all…I am making you #aware of all possible options that you might have. The good news is that I developed myself about eight years ago by reading several #books on the subject by prominent authors from all across #world. Another good news now is that the last decade’s situation has changed in favor of learners because resources are available online, which saves the cost of learning and provides an opportunity to learn from the comfort of your home.
I want to share with you that when I saw that there is an absence of a structured program /course on technical analysis, I, as YouTuber, could find an opportunity to #launch a well-structured program on my @YouTube channel titled ‘Zero To Hero’ which will take a learner from basics to advance level of theoretical aspects first and then several practical on price charts so that learner will be able to translate theory into practice in actual market conditions.
To make it easier, I have created a separate playlist on my YouTube channel titled ‘Zero To Hero’ where all such video presentations would be available. The Zero To Hero series will have a new video every Saturday at 8 PM, enabling a learner to make the best use of weekends. Zero To Hero has been initially launched in Hindi, but it will shortly be found in English.
So, there is no secret to finding a place among 5% winners in the stock market. The learner must have only the patience to watch each video of 1 hour or so under Zero To Hero Series at least 3 times (#practice to healthy learning demands second or third revision) to have conceptual clarity so that there is no trace of doubts in the mind of a learner. Once all 50 videos have been watched successfully (at the time of this writing, there are only 4 videos, and every Saturday at 8 PM, a new video will be uploaded). It is suggested to start first trading with virtual money before one starts trading with actual money. It is said that keeping doubts in mind is detrimental. So, I would advise the learner to keep asking questions in the video presentation’s comment section, which will be promptly answered. I would like to emphasize that I am not aware that such a structured program like ‘Zero To Hero’ exists on YouTube. At least I have not come across as most YouTube channels on the subjects focus on promoting their training programs rather than imparting education.
Suppose you have read the entire article without skipping a word. In that case, this is the first test you have passed to be a successful trader or investor in the stock market because patience is the best friend of learning.
I am sure that people like you with great patience & desire to learn will watch all videos under the ‘Zero To Hero” series without fast-forwarding to not miss out on an essential piece of learning.
I am now sharing a video link of Zero To Hero # 01 (Hindi), which gives an overview of the program, which might add some value among those willing to find a place among 5% winners…
Happy reading & watching…