Analyse few technical indicators for consistent profits

Every trader aims to earn maximum profits. In his endeavour to do this he makes an in-depth study of technical analysis and several indicators.

When you open any chart in trading platform one can observe that it is over crowded with too many indicators and the main factorto be considered which is price is rarely observed.

All technical indicators are mere derivatives of the price factor. Ignoring price and indulging into many technical indicators leaves one even more perplexed.

To avoid this confusion, it is better for the trader to restrict himself to few technical indicators and try to master those indicators.

Whenever a new theory or concept is introduced in the market the trader tries to gain knowledge about it and sometimes excessive knowledge doesnot really work.

The concept of less is more applies to stock market. Very often a trader applies indicator for a month and realises that it doesnot work for him and he moves on to use another indicator in the successive month. By doing this the trader gets confused and doesnot master any indicator.

A trader needs to understand the trend, momentum, market volatility, volume and whether the stock is overbought or oversold. Use indicators which reveal information about the above factors.

Anything beyond this is an excess baggage to carry and doesnot help you to move upward. To proceed further it is important to shed the excess load and discard unnecessary information rather than being overloaded.

Stock market is complex at times and its volatility is high, so it is always better to make complex things simpler by restricting yourself to only very few indicators.

After gaining knowledge about what a particular indicator is, try to learn its application. Application of the indicator is more important than theoretical knowledge about the indicator.

By applying a particular indicator over and over you can master it perfectly.

Observation of technical charts consistently for a long period of time helps you to understand the charts in a better manner.

Over a period, you begin to realise that the moment you see a chart you can predict or analyse the price movement.

Price action or price behaviour is the most important factor to be studied in stock market. Trying to analyse the price behaviour helps you to minimise losses and maximise profits consistently.

Study of previous charts combined with the application of certain indicators will help you realisewhether the study of indicators was relevant in the chart.

Previous charts which seem to be history will help you understand the relevance of indicators in price movements.

Try to stick on and restrict yourself to very few indicators and master application, then you are bound to earn profits.

Remember, to make money in stock market you need more wisdom rather than knowledge.

(The author is a homemaker who dabbles in stock market investments in free time)