Fundamental Concepts in Technical Analysis

A reporter once asked what is the fastest way to get a million dollars, and my reply to that question was: Ask Ralph Seger. Word on the Street is that millennials need $2 million before they can even consider retirement, and to quote Ralph, “One way to end up with $1 million is to start with $2 million and use technical analysis.”

There is a strong belief from the counter-camp that Technical Analysis is about as useful as voodoo for helping you figure out the best way to invest your money. However, before you start lighting your torches and picking up your pitchforks, let us first take a quick look at some of the differences between fundamental and technical analysis of investments.

Fundamental analysis is the more logical, pragmatic way of investing where you consider the various pros and cons of a company you want to invest in, for example, or the “bigger picture”. Technical analysis, on the other hand, is looking at the market in general, the psychological aspects of what people think of the company, by analyzing past market movements to gain insights into its future. You can buy into a position in a fundamentally strong company, but if its shares are already at its peak, you could find yourself in a losing position during a pullback or correction, something you could have potentially avoided with technical analysis.

In this book, you will learn the advantages of technical analysis, and with catchy names like “the Hanging Man”, “Three White Soldiers” and “Three Black Crows”, I am sure you will find technical analysis both a fun and rewarding way in your investment journey.