What is Technical Analysis?

There are 3 types of analysis that we rely on:

  • Fundamental Analysis (anything news-related such as financial statements, interest rates, employment data, etc.)
  • Technical Analysis (raw price action)
  • Mental Analysis (understand what other traders are seeing or hearing from their fundamental and technical analysis)


The strategy that you're going to learn is a combination of technical analysis and mental analysis. You will be able to look at the charts, see different price patterns and understand what that means and where the price is going to go (technical analysis). You will also be able to understand what other traders are seeing and where the price is going to go (mental analysis).


Personal Trading Philosophy

  • My approach to technical analysis is simple
  • Favorite flavor of technical analysis is vanilla
  • I endorse and utilize the technical analysis core principles
  • I do not endorse nor utilize excessive chart indicators, hot tips, gimmicks or signal services


Adopt your own trading philosophy and ensure that it is one that grows as you grow, and most importantly, is replicable.


As quoted by Warren Buffet:

"Be fearful when others are greedy, and greedy when others are fearful." - Warren Buffet


I use technical analysis for one purpose only - to identify where the collective market is likely to have order clusters. In identifying these areas, we may act on the side of probability, which is always on the opposing side of the collective market mind.

Your goal as a technical speculator is to buy from unjustified pessimism and negativity, then sell to unsustainable optimism and positivity.

In other words:

  • Buy low when the market is fearful
  • Sell high when the market is greedy

Discussion

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