Top 3 Vital Assumptions of Technical Analysis in Trading

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Top 3 Vital Assumptions of Technical Analysis in
Trading
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Technical analysis is applicable both in
commodities and stocks, where the value is
dominated by some force like supply and demand.
Here are some chief assumptions of technical
analysis that should be known by all tradesmen
Technical analysis works as a security, where
the value or the price is only dependable on the
supply as well as the need. Being secured by the
best technical analysis software, keeping the
following assumptions in your mind is also
important to earn more profit in trading.
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High Liquidity

• Liquidity is a very important factor in
  trading. The highly-treaded, popular and useful
  items of trading allow the investor to trade
  successfully and quickly without any hassle.
  Rarely traded stocks are more difficult to trade
  with and to make money through it. As it involves
  limited investors, the price can be changed
  according to their intention and this thing can
  prevent you from getting your profit.

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No Extreme News

• As mentioned earlier, technical analysis is
  all about informing the investors about possible
  ups and downs in the stock market, it does not
  have the ability to offer any unexpected as well
  as extreme news about the company or the owner of
  the company. When forces like any kind of extreme
  news start to control the value of the stock,
  then the technicians have to wait to reform the
  chart and declare the possible result.

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No Artificial Price Changing

• Splits, dividends and distributions are
  the chief dominant in artificial price changes.
  Though the value of the investment is same, the
  act of artificial price changing has a tremendous
  effect on the price chart and this thing makes
  difficult to do the job of technical analysis
  successfully.
• Apart from all these things, which should
  be remarked wisely. Searching for the best
  technical analysis software is the best suitable
  option to start your journey in trading.

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• In the present day, trading has reached a
  great dimension, technology has improved the
  trading procedure chiefly. Befitting with that
  fact, there are various top-class analysis
  software to solve your tension regarding trading.
  If you search on Google, you will get a plenty of
  options to choose from, however, choosing the
  best one is not a childs play.

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