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With the growing popularity of forex robots, one question on everyone’s mind is how do they work? Of course all of these robots use different mathematical algorithms to trade, but the principal on which they function remains the same and has been used for a long time to trade stocks, bonds and currency. They all use technical analysis to determine when to purchase and sell currency. Technical analysis in its most basic form is simply looking solely at the price movement of an investment to determine what the price will be in the future. There are three main areas that most people look at when examining an investment, chart patterns, candlestick patterns and economic factors or government intervention.

Looking at chart patterns is one of the most standard methods of determining the direction of an investment. There are a couple particular patterns that market watchers look for. Some of the most used patterns are: the double bottom and double top, the head and shoulders, the rising and falling wedge, the triangle, and the flag and pennant patterns. All of these patterns are titled based on how they appear visually on the chart and there is a slightly different way to trade apiece of these patterns. One of the benefits of using these charts patterns is that apiece of them wage a very distinct entry point and a precise stop/loss price. This is not necessarily the case with examining candlestick patterns.

Using candlestick patterns in your technical analysis is primarily for a shorter time frame analysis. A candlestick is a formation on the chart that contains all the trades for a predefined time period, for example – one minute, one hour, a day, or any designated period of time. It gets its study because the formation looks like a candlestick with a wick at the top and sometimes a wick at the bottom as well. Some of the candlestick patterns traders look for are the called the spinning top, doji, bullish and bearish engulfing patterns, the hammer, the hanging man, and the morning and evening star patterns. While examining chart patterns can help determine a trend, looking at these candlestick patterns can signify whether a trend is going to continue, whether it is reversing itself or if you prefabricated a mistake and there was no trend at all.

The third analysis is far more nonfigurative and might be considered by some traders to be more fundamental analysis than technical. Support and resistance levels can be set by outside stimulus. With the forex market many central banks tie their currency to the dollar. For instance, Nihon strives to keep the exchange rate at 100 yen per dollar. Of course this means when the Yen goes over 100, the central bank might sell yen and purchase dollars. The forex market behaves like any business so creating a larger supply of yen, while the demand remains the same should lower the price of the currency. Knowing these levels can be very beneficial in determining how long a trend might continue or whether it might stop prematurely.

This third analytical tool can be used on common shares of stock in addition to currency trades. The above mentioned support and resistance levels can be created by stock purchase back programs, options expiration and exercises and warrants or convertible shares being exchange for stock at a specific price. Most traders argue that chart and candlestick patterns do not work for examining individual stocks as they do with currency pairs. One of the reasons is because the forex market is so massive it takes important macro economic events to move it, where as individual stocks can be crushed instantly with news so trivial as a C.E.O. retiring. That is why most traders limit their technical analysis to market indexes and the foreign exchange market.

Technical analysis of stocks: The technical analysis of the stock can be defined as the researching the market and the previous peroformance of the share.The 52 week high and low,base preice and roi  etc
What Does Technical Analysis Meaning

A method of evaluating securities by examining statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to refer patterns that can recommend future activity.
Technical analysts believe that the historical performance of stocks and markets are indications of future performance.

In a shopping mall, a fundamental analyst would go to apiece store, study the product that was being sold, and then decide whether to purchase it or not. By contrast, a technical analyst would sit on a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, the technical analyst’s decision would be based on the patterns or activity of people going into apiece store.

Buying or selling stocks is not an simple task if you want to make money doing it. Millions of investors have lost money in the past trying to guess stock price movements.

You should never be weak in the basics what you do.
It might not be a  cake-walk to acquire with share market.But it definitely not an Blackhole to understand.As a research analyst i write what i feel.Because i am only a geek who tries to comprehend it.

source: technical analysis and research technical analysis of stock