Financial Opportunities available on the London Financial Markets: The technical analysis - A short overview
Financial Opportunities available on the London Financial Markets
Possibilities and Threats
London is the location of one of the oldest and biggest stock exchanges in the world: The LSE (London Stock Exchange), with its foundation in 1698. Especially today, there are numerous possibilities to get involved: Money can be invested in funds, bonds, commodities, shares, government bonds and many further. But investing money always means huge risks: Depression on the one hand and euphoria on the other can be closer, than you might realize.
The high risk of shares
Apart from the “real” value, the value of a share depends on many factors, more than we can keep the overview of: Expectations, feelings, published facts, the general opinion and much more. So there are lots of things that have an impact on the decision of a market maker. We can say that people are actually not acting rational which leads to unexpected amplitudes. To reduce the risk of losing money, caused by those phenomena, some smart people invented tools, like the fundamental analysis or the technical analysis.
The technical analysis
A basic principle is that the market price reflects all the relevant information, so any further external information is not needed. Therefore the technical analysis studies the past market data. By doing that it tries to forecast a development by investigating for recurring patterns in the past. But why should the past be relevant? People behave in similar situations in a similar manner. We are programmed to act so because of our evolution: in situations of fear or joy we tend to act in a specific way. And here closes the circle. The technical analysis uses this knowledge to try to give a forecast. It has to be mentioned, that it is no prophecy, but rather a statistic prognosis and it is assembled of several methods.
Trends
A first thing you can do is to find a general trend. Connecting specific peaks & troughs will give you an overview about the actual trend,
Possibilities and Threats
London is the location of one of the oldest and biggest stock exchanges in the world: The LSE (London Stock Exchange), with its foundation in 1698. Especially today, there are numerous possibilities to get involved: Money can be invested in funds, bonds, commodities, shares, government bonds and many further. But investing money always means huge risks: Depression on the one hand and euphoria on the other can be closer, than you might realize.
The high risk of shares
Apart from the “real” value, the value of a share depends on many factors, more than we can keep the overview of: Expectations, feelings, published facts, the general opinion and much more. So there are lots of things that have an impact on the decision of a market maker. We can say that people are actually not acting rational which leads to unexpected amplitudes. To reduce the risk of losing money, caused by those phenomena, some smart people invented tools, like the fundamental analysis or the technical analysis.
The technical analysis
A basic principle is that the market price reflects all the relevant information, so any further external information is not needed. Therefore the technical analysis studies the past market data. By doing that it tries to forecast a development by investigating for recurring patterns in the past. But why should the past be relevant? People behave in similar situations in a similar manner. We are programmed to act so because of our evolution: in situations of fear or joy we tend to act in a specific way. And here closes the circle. The technical analysis uses this knowledge to try to give a forecast. It has to be mentioned, that it is no prophecy, but rather a statistic prognosis and it is assembled of several methods.
Trends
A first thing you can do is to find a general trend. Connecting specific peaks & troughs will give you an overview about the actual trend,