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RL087 – What is technical analysis?

Today on the Retirement Lifestyle Show, Roshan Loungani, Erik Olson, and Adrian Nicholson talk about technical analysis. They dissect the benefits of using technical analysis in your investment strategies, trend indicators, and the price momentum of a stock based on volume. Listen now to learn what is a technical analysis?

[03:28] The History of Technical Analysis

[08:10] Who is a Technical Analyst?

[16:40] The Benefits of Combining Technical Analysis with Other Investment Strategies

[18:40] The Moving Average Convergence and Divergence

[20:04] Death Cross and Golden Cross

[22:39] Finding Your Favorite Trend Indicator 

[25:08] Exit Signals in Technical Analysis

[26:25] Is Technical Analysis an Art or a Science?

[29:30] The Average Directional Indicator by Welles Wilder

To read the Full Show Notes scroll down or click here.

  • Roshan Loungani can be reached at roshan.loungani@aretewealth.com or at 202-536-4468.
  • Erik Olson can be reached at erik.olson@aretewealth.com or 815-940-4652.
  • Adrian Nicholson can be reached at adrian.nicholson@aretewealth.com or at 703-915-8905

 

Listen now to learn what is a technical analysis?

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Full Show Notes:

What is Technical Analysis?

Technical analysis is a unique trading discipline, originally from Japan, used in evaluating investments and identifying trading opportunities by analyzing statistical trends gathered from trading activities. The two most analyzed market activities are price movement and volume. The reasoning behind technical analysis is that buying and selling actions accurately reflect all relevant market information and continually assign a fair market value to the security. Simply put, technical analysts use tools to scrutinize how supply and demand for a security will affect changes in price, volume, and implied volatility. 

 

Understanding Technical Analysis 

To better understand technical analysis, you simply need to comprehend two things: trends and support/resistance. We all know that markets can only move up, down, or sideways. And so market prices typically move in a zigzag manner, but still maintain that up, down, sideways movement. This further means that price action can only have two states: range – when prices zigzag sideways or trends – when prices either zigzag higher or lower. When you analyze these trends and ranges, you get a better understanding of when and where to enter a market, and more importantly, when and where to get out.

 

Technical Indicators 

As earlier mentioned, technical analysts focus on patterns of price movements, trading signals, and various other analytical charting tools. And we already know that market charts always have a story to tell. However, from time to time, those charts speak a language we don’t understand. And so what the experts do is they have several technical indicators that interpret how the markets might behave. Investors then use this information to determine when to enter or exit the market. Common examples of these indicators are Money Flow Index (MFI), moving average convergence divergence (MACD), Relative Strength Index (RSI), and stochastics. Technical analysis can be used on stocks, futures, commodities, fixed-income, or currencies as long as the security has quantifiable historical trading data. 

Listen now to learn what is a technical analysis?

Disclaimer Welcome, you are now listening to the retirement lifestyle show with Roshan Loungani Erik Olson and Adrian Nicholson. This show is an exploration of ideas to help you work towards your ideal retirement. Roshan Loungani and Erik Olson serve clients across the US. They offer financial planning and investment advice through Arete Wealth Advisors, LLC, an SEC registered investment advisor and securities through Arete Wealth Management LLC, member FINRA, SIPC, and NFA. Get ready for the financial independence of your dreams. All opinions expressed by podcast hosts and guests are solely their own are based on information they believe is reliable. Neither Arete Wealth nor its affiliates, warrants its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only and should not be regarded as specific advice or recommendations for any individual. Before making any decisions consult a professional. Finally, our music is the chance by Jason Shaw and Audionautix. It’s part of the YouTube Audio Library and it’s licensed under a Creative Commons license.

Thank you for listening.

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