Are You A Technical Trader?

Are You A Technical Trader?

The technical analysts look at the price chart and the trends to trade on various assets. They use the technical charts to have an outlook on the position and to take a trade. The technical analysts do not bother about what the underlying asset is. All that they look at is the technical chart to understand the supply and demand in the market to judge where to buy and where to sell an asset. It does not really matter to the technical analyst which stock or which commodity they are trading in.

The technical analysis approach looks at the price levels where the buyers had been in force historically and cause a push to the prices. Similarly, they look for the price levels where the sellers were dominant in the past causing the prices to push lower. Thetechnicalanalysisapproach is preferred because it lets one know the exact entry and exit for a trade. The technical analysts also make use of many indicators and other studies to determine if the stock futures are at a good valuation to buy or whether it is overbought.

Many traders prefer the technical analysis approach because it lets them trade on any asset class using the same strategy. This is not true about fundamental analysis because every asset has different factors that could affect its prices when trading fundamentally.

Which approach is better?

Whenchoosingbetweenwhether to trade using fundamental or technical analysis it is important to understand what your strengths are. If you understand the economic data numbers and follow the news to draw an inference about the stock prices then the fundamental analysis is the approach that you should choose. Those who however is more keen to look at the price charts and are able to draw a visual notion about the stock prices should choose to follow technical analysis. Most of the traders in the market choose one of the approaches to place trades.

The fundamental and technical analysis are not mutually exclusive. It may get impossible to take a trade that meets the criteria of both the approaches. Many however use the fundamental approach to judge whether the asset should be bought and then use the technical analysis approach to time the entry and exit of the asset. It is important that you pay close attention to what your trading goals are and then chooses the approach that best fits your style. Use the trading approach when you trade on the Bitcoin Loophole.