TECHNICAL ANALYST; WHO IS A TECHNICAL ANALYST?

A Technical analyst is an expert who gives professional advice. A gold dealer predicting the price movement of gold with the aid of charts, trends, prices and other indicators is a technical analyst. Also, a stockbroker who offers advice on shares to either buy or sell is a technical analyst.


Even a forex trader making use of candle sticks to predict price movement is a technical analyst. In fact, a technical analyst is anyone who has had a fairly success in predicting the prices of commodities.

There are some technical analysis functions that will require you to acquire some formal education while some does not need any formal education before you can become a technical analyst. Financial analysts for instance need some kind of professional qualifications before he or she is allowed to parade him or her self as a financial (technical) analyst.

Note that predictions of technical analysts are not perfect as they are not prophets or sorcerers. All they do is make predictions based on empirical evidence. This is to say that information coming from technical analysts still needs to be censored before one uses it. Other non technical factors need to be properly evaluated so as to make high quality economic decisions.

BENEFITS OF BECOMING A TECHNICAL ANALYST

Trade successfully: armed with the ability to analyse raw data and make prediction from it, you don’t go hungry anymore as you can even borrow money and trade profitably. Buying commodity with another person’s money is known as short selling. You can even undertake to trade for third parties.

Consultancy services: information is the most valuable and most sought after commodity in the market today. People are ready to get information at any cost provided it will give them value for their money. As a technical analyst, you can sell signals to aspiring commodity traders like gold traders or currency traders. I have made a lot of money giving people signals of gold and shares (common stocks).

Respect: the respect that people will accord you just by knowing that you are a technical analyst. I brag whenever I am being called upon as a technical analyst to give talk in seminars. You too can be highly respected and connected. You may get opportunity to be in economic or other technical summit board of your region.

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INTRODUCTION TO TECHNICAL ANALYSIS

Technical analysis is the use of scientific tools to forecast price movement of a commodity. It is based on reading prices through charts. Technical analysis can be defined as a well articulated process of identifying trends at an early stage, getting into the trend and stay with it until you see heavy evidence against it.


I really don’t like the fact that the phrase ‘technical analysis’ is used to describe this process. This sounds a little mis-normal as what is actually done in technical analysis is to determine price based on the attitudes of those already in the market and that of those intending to get into the market.

If there is one thing to take home from technical analysis, it is the fact that you must not go against a trend until it reverses. A trend reverses when there is a weight of evidences pointing to it. This includes; trendlines, moving averages, momentums, candle sticks, etc.

In all that you do, always remember that technical analysis doesn’t have to be perfect. In fact, it is far from being perfect even when you correctly interpret a situation. That is to say that you don’t put all your trust in technical analysis but, will have to complement it with fundamental analysis wrapped in common sense analysis. Hey! I don’t attack me with this as there is nothing like common sense.














If you really want to succeed in trading commodities, you must firstly learn to keep things simple. Do not let anyone confuse you with some complex and sophisticated analysis. It doesn’t matter what kind of trader you are; short-term trader, long term trader, day trader or simply a scalper, technical analysis still remains the same. Again, it does not matter what commodity you are dealing on; gold, silver, shares, currencies (forex), etc.

This happens to be the first post of this blog, I encourage you to stick to this blog, devour all the contents that will be coming on a fairly regular basis.

Technical analysis is not a rocket science. Again, all it takes it keeping things really simple.

To your success as a trader!