Before starting, one must know what actually is technical analysis.
Technical analysis is a method of evaluating securities by analyzing statistical trends about price movements and trading volume. It’s based on the assumption that past price movements and patterns can predict future price movements. Unlike fundamental analysis, which focuses on a company’s financial health, technical analysis solely relies on chart patterns, indicators, and historical data
Yes you can use technical analysis to earn money in stocks, commodities and crypto coins and if you have good grasp of it you can also make it your primary income. Many people have become full time traders after learning and applying their skills.
Know the Basics:
Chart Patterns: Learn to recognize common patterns like head and shoulders, double tops/bottoms, triangles, etc. These patterns can indicate potential reversals or continuations of trends.
Technical Indicators: Familiarize yourself with indicators like moving averages, Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), Bollinger Bands, etc. These tools help identify overbought or oversold conditions, trend strength, and potential reversal points.
Time Frames: Understand the difference between short-term, medium-term, and long-term charts. Different time frames can provide different insights into market behavior.
Develop a Trading Strategy:
Identify Entry and Exit Points: Use technical indicators and chart patterns to determine when to buy or sell a stock.
Risk Management: Set stop-loss and take-profit levels to protect your investment and lock in profits.
Money Management: Determine how much capital to allocate to each trade and stick to your plan.
Practice and Backtesting:
Demo Account: Practice using technical analysis on a demo account to gain experience without risking real money. You can download and create account on Investify application and check if you are making profit with your trades,
Backtesting: Analyze historical data to see how your strategy would have performed in the past.
Continuous Learning: The financial markets are constantly evolving, so stay updated on new techniques and indicators.
SPOILER ALERT
Technical analysis is a skill that takes time and practice to master. Start with a solid foundation, be patient, and continuously learn and adapt. Start with a small capital and then gradually increase as you gain confidence in your new skill.