Technical Analysis Basics

What is the purpose of Technical Analysis?

• To develop a point of view on markets

• To identify long-term investment opportunities

• To analyze fundamental factors of a stock

• To predict short-term market trends

What does Technical Analysis visualize?

• The actions of market participants in stock charts

• The fundamental factors affecting a stock

• The long-term investment opportunities in the market

• The expected risk and reward of a trade

What do patterns in stock charts help identify?

• Trading opportunities

• Long-term investment opportunities

• Expected holding period

• Expected entry and exit points

What is the main assumption of Technical Analysis?

• Market participants' actions can be analyzed through patterns

• Fundamental analysis is the best approach to the market

• Technical analysis is a quick and easy way to profit

• The crowd's preference is always right

Which research technique is best for identifying short-term trades?

• Technical Analysis

• Fundamental Analysis

• Both techniques are equally effective

• Neither technique is effective for short-term trades

What is the recommended holding period for trades based on Technical Analysis?

• A few minutes to a few weeks

• Several months to a year

• Several years to a decade

• Indefinite, there is no specific holding period

What should traders do if a TA-based trade starts losing money?

• Cut the losses and move on to identify the next opportunity

• Hold on to the trade with the hope of recovering the loss

• Increase the investment to average down the losses

• Seek advice from a fundamental analyst

What is the main advantage of using Technical Analysis?

• Helps in defining entry and exit points

• Provides a detailed analysis of fundamental factors

• Guarantees huge returns within a short duration

• Eliminates the need for research and analysis

What is the main disadvantage of using Technical Analysis?

• Limited scalability in analyzing multiple stocks

• Inability to identify short-term trading opportunities

• Requires extensive knowledge of fundamental analysis

• Relies solely on the crowd's preference

What is the recommended approach for identifying long-term investment opportunities?

• Fundamental Analysis

• Technical Analysis

• Both techniques are equally effective

• Neither technique is effective for long-term investments