New York, New York (PressExposure) March 05, 2012 -- Danny Esposito, co-editor for Penny Stock Detectives, believes that technical chart patterns hold the key to maximizing profits when investing in a stock, index, or market. In a recent Penny Stock Detectives article, Esposito explains that learning how to interpret a technical chart, and so understanding the past price action, can improve one's chances greatly at knowing future price action.
"Like many things in nature, technical analysis discovered patterns in the technical charts. When things tend to repeat themselves continually, as in nature, there is an understanding of a pattern. While not perfect, and while patterns can deviate substantially from what they are meant to do, the fact that patterns repeat themselves often enough presents an opportunity for investors to profit from technical analysis," argues Esposito.
Esposito points out that technical analysis is not a new technique. In fact, technical analysis has been with us for hundreds of years. It wasn't until the 1920s that books began to be written about this area. Today, technical analysis is a specialized discipline within the financial industry.
Many argue that technical analysis just consists of pictures that are interpreted differently by different technicians. Esposito completely disagrees with this assessment and points out how fundamental analysis breaks down the numbers of a company, and how different analysts will interpret these numbers differently. In light of this, the argument against technical analysis doesn't hold water.
In his article, Esposito describes how trendlines are used in technical analysis.
However, Esposito warns that "technical analysis is certainly not the only tool an investor should use to invest in a stock or a market. However, it should be considered an important tool, along with other fundamental analysis techniques. Technical analysis does a great job at capturing the past price and volume patterns of a stock, index or market. As such, understanding these patterns can result in big profits for investors in the future."
Published every business day, Penny Stock Detectives researches and analyzes low-priced opportunities in the stock market and individual stock market sectors. Penny Stock Detectives reports on penny stocks, small-cap stocks, micro-cap stocks, high-profit potential plays mostly under $10, and the stock market in general.
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The editors of Penny Stock Detectives believe low-priced stocks, when researched properly, present investors with great opportunities to accumulate wealth and to increase the value of their investment portfolios. You can learn more about Penny Stock Detectives at www.pennystockdetectives.com.