Technical Analysis - Who, What and How?

Our Equities Trader, Roberto Russo, discusses the concept of  Technical Analysis.

 

 

One of the most overlooked and largely misunderstood aspects of trading is focusing on the chart rather than the company itself. The standard method of investing that the majority of people use and understand is looking into the fundamentals behind the company.

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The new age is upon us where the majority of new investors are using the strategy of technical analysis.

In my monthly segment, I will be discussing all things technical analysis to give you the new age opinion on the capital markets and macro outlooks.


 

So, what is Technical Analysis?

 

Technical analysis is a trading strategy used to examine and predict price movements by using the price charts and technical indicators of the instrument you are trading.

The concept behind the strategy is that historic chart patterns can be used to predict future movements in the price of the instrument and that human psychology tends to force the issue by using patterns and indicators to make sense of the situation.

 
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The concept behind the strategy is that historic chart patterns can be used to predict future movements in the price of the instrument and that human psychology tends to force the issue by using patterns and indicators to make sense of the situation.

Roberto Russo, Equities Trader

 


 

How can Technical Analysis help me? 

 

A great use for technical analysis or ‘TA’ for short is predictions on where to buy and where to sell and to measure your moves and construct a portfolio based on the outlooks at the time. A logical way to put this is if the outlook for the sector or the share price has been in a downtrend for some time, what reason would you buy?

Maybe the company has become cheap so you would consider  a ‘value investing’ strategy based on fundamentals, but on a technical basis, you would steer clear until the outlook provides confidence or positive reinforcement of an entry point into the stock.

Using this strategy whilst building a portfolio, can minimize potential downside risk and keeps your money working for you.

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How do I make better investment decisions?

 

One thing I stand by is the use of confluence- using both fundamentals and technicals hand in hand to make investment decisions. This is an ideal strategy to maintain a balanced portfolio that assists in ensuring that you as an investor are well prepared and well-positioned for success. 

Now that we know a little bit about TA, stay tuned next month for a macro look at the markets from this perspective. 

 

Where to from here?

Trading equities is all about having access to the right investment opportunities and making decisions based on accurate, unbiased information. Often, this means hours of research on a daily basis, keeping up with several ASX announcements, understanding economy-impacting events and regularly consuming broader news updates. If you're not an equities trader by profession, then it can quickly become rather overwhelming, especially once you have built a considerable-sized investment portfolio.

Our Equities Trading team, backed by our independent research department is the ideal solution for said situation. Our clients receive access to exclusive investment opportunities, daily ASX research reports, our expert weekly outlook on the Australian markets and direct access to our equity traders.

Trading with Barclay Pearce Capital is about building long-term returns, trust, confidence and a mutually beneficial relationship.

 

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Ben Weber

Chief Investment Officer

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Trent Primmer

Director of Trading

Joseph Raad

Joseph Raad

Equities Trader

Roberto-Russo

Roberto Russo

Equities Trader

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Malcolm Kazal

Equities Trader

CJ Frangieh

CJ Frangieh

Equities Trader