Basic analysis is when investors analyze the value of investment objects (company stocks, commodity futures contracts, etc.) and their related factors, evaluate and predict them, and then decide on their investment behavior. Technical analysis refers to the sum of methods that take market behavior as the research object, judge market trends and follow the cyclical changes in trends to make trading decisions on stocks and all financial derivatives. Technical analysis believes that market behavior is inclusive and digests everything. The meaning of this sentence is: all basic events - economic events, social events, wars, natural disasters and other factors that affect the market will be reflected in price changes. Therefore, technical analysis believes that as long as you pay attention to changes in price trends and changes in trading volume, you can find clues to profits. The purpose of technical analysis is not to follow the banker. The purpose of technical analysis is to find buy, sell, and stop loss signals, and to achieve long-term stable profits in risky markets through fund management. The analysis corresponding to technical analysis is called fundamental analysis. Fundamental analysis is also called fundamental analysis, but note that fundamental analysis is not the same as fundamentals. Fundamentals refer to all events that affect supply and demand. Fundamental analysis refers to summarizing these basic events and ultimately determining the intrinsic value of the subject matter. When the price of the underlying object is higher than the value of the underlying object, it is called overvalued, and it is necessary to reduce the holding during the transaction. On the contrary, if the price is lower than the value, it is called undervalued, and it is necessary to buy during the transaction. From the perspective of trading practice, technical analysis methods should be ahead of basic analysis methods. Technical analysis is more practical in operation. Finally, I would like to add: Neither technical analysis nor basic analysis methods are tools for following the banker. Following the banker is just a reflection of some people who are used to cheating in trading. The banker is insignificant to a serious technical analyst, and they do not need to follow it, because the banker is nothing compared to the market.

Technical analysis method

Technical analysis method analyzes the trend and predicts the future from several aspects: the trading volume and price of the stock, the time it takes to reach these prices and trading volumes, and the space for price fluctuations. . Currently commonly used ones include K-line theory, wave theory, pattern theory, trend line theory and technical indicator analysis, etc., which will be analyzed in detail later.

Advantages and Disadvantages of Technical Analysis

The advantage of technical analysis is that it is close to the market and it is more straightforward to consider problems. Compared with basic analysis, technical analysis has quick results in securities trading and the cycle of obtaining benefits is short. In addition, technical analysis responds more directly to the market, and the results of the analysis are closer to the local phenomena of the actual market. The disadvantage of technical analysis is that the range of issues considered is relatively narrow and it cannot make useful judgments on the long-term market trend. Basic analysis is mainly suitable for security price predictions with relatively long cycles, relatively mature securities markets, and areas where prediction accuracy is not high. Technical analysis is suitable for short-term market forecasts. To conduct longer-term analysis, you must rely on other factors. This is the most important issue that should be paid attention to when applying technical analysis. The conclusions reached by technical analysis are only of a suggestive nature and should be presented in the form of probabilities.