How Financial Traders use Technical Analysis to Identify Market Trends

LONDON, October 18, 2011 /PRNewswire/ --

Technical analysis is a method used by traders to identify trends, reversal points and potential price targets - all extremely advantageous pieces of information when speculating on market movements. The technique can also be used to inform stop loss and limit order placement in spread betting. So how does technical analysis work?

City Index (http://www.cityindex.co.uk/) offers a free seminar entitled 'Technical Analysis for Beginners'. This session, available to members and non-members alike, is led by the company's Chief Technical Analyst Sandy Jadeja. Over the course of the 90 minute interactive workshop, Mr Jadeja maps out the best ways to technically analyse a financial market, in the process demonstrating how to chart performance, use historical patterns and pinpoint trends.

Identifying a trend, whether rising or falling, can be one of the most attractive spread betting strategies for beginners. Sandy Jadeja states: "Especially for those just starting out, you want to be able to just scroll through the securities on your charting package and pick out nice, smooth charts of movements in one direction or the other."

Every spread bettor who employs technical analysis has their own preferred methods and techniques. One thing that most agree on, however, is that technical analysis is best kept simple. Clear analysis is aided by clear presentation, as spread betting expert Mr Jadeja asserts. "I prefer open-hi-lo-close bars to Japanese candlesticks. Candlesticks can be a powerful tool, but far too many people get bogged down in looking for specific patterns and they end up forcing them on the chart when they aren't really there."

Though technical analysis is generally far less time-consuming than fundamental analysis, it is important to remember that it is based entirely on developments in the past, not in the future or even the present. As always, whether you ultimately decide to base your spread betting on technical analysis, fundamental analysis or a combination of the two, ensure that you fully understand the risks involved.

Learn more about technical analysis with a free City Index seminar at:

http://www.cityindex.co.uk/learn-to-trade/seminars.aspx

Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFD trading and, in the UK, spread betting.

We constantly look to improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. Visit http://www.cityindex.co.uk/spread-betting/start-spread-betting.aspx to open your spread betting account.

SOURCE City Index

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