What is Technical Analysis of stock market?

There are many definitions of technical analysis of stock market. But what we believe is “technical analysis is simply the price reflection in chart of fundamental price action of a particular underlying.” It means if you know how to read a chart actually you are reading the fundamental price action of that underlying. Remember fundamental analysis and fundamental price action are quite different. Where fundamental analysis is the cause and price action is a result.

Some people believe technical analysis gives opposite opinion of fundamental analysis but we believe both gives same opinion at a particular meeting  points. Both encourage buying together and selling too. But these signals are limited. Those, who trade beyond the meeting points they loose money.

So I must say technical analysis is totally depends on price and volume. No oscillator indicators can help to analyze a chart. It is only price and volume which able to define the actual status of an underlying. One more thing to be remember technical analysis is not science. It only a process of analysis the probability which we use scientifically. So technical analysis has limitations. Under those limitation you have to trade and make money. That is the main reason after learning technical analysis you can not trade every day. Technical analysis helps you to read the market behavior and sentiments, it does not help you to take a decision.

Then what is the use of technical analysis? It helps to understand the market direction. As a trader it is important to know the probable market direction in advance. So that with every turn you can adjust your trading style.

Some people use technical analysis for daily trade and most often make mistake of doing over trade. When you are learning technical analysis you must understand that you are looking for quality trade only. Yes, proper knowledge of technical analysis helps only to get quality trade.