Now this is where things get interesting. One of the most crucial aspects of stock trading is Technical Analysis. It refers to the forecasting of potential fluctuations in the prices based on the previous charts.

Advantages:

When trading stocks on technical data:-

• All the fundamental factors affecting a stock's value are supposedly already figured into the charts so an investor can quickly discern trends of a stock's value without having to research all the different types of fundamental data affecting that stock.

Technical programmable mathematical algorithmic formulas:-

• These can be created and utilized and give an investor the needed edge over other investors who do not use such formulas. This works fairly well for trading firms, banks, broker-dealers and in aggressive professional day trading and swing trading strategies. Such programs are specially helpful for trading medium to larger cap stocks.

Identifying technical historical trading patterns:-

•  The charts that includes trading volume and buy vs. sell trader activity allows the trader to predict a new trend, a trend reversal, and the strength of such trends. In this way timely entry and exit points can potentially be predicted for the greatest potential profit.

When basic technical data reveals potential trends that coincide with fundamentals,

• A significant double confirmation of a future trend or trend reversal for buying or selling is established. Such technical confirmations of fundamental data is highly valued by extraordinary investors for trading penny stocks for explosive profits and more.