Cracking the Stock Market Code: How Technical Analysis Can Help You Ride the Trends

The stock market is a highly volatile investment instrument, but seasoned market analysts assert that predicting stock prices is still possible through technical analysis.

BDO Securities Chief Operating Officer, Bernhard Tsai, explained during a TradeTalks Tutorial Series that market prices form patterns that create trends, and people tend to react similarly when they see these patterns that have previously formed. Tsai emphasized that identifying the type of trends formed and riding on them until such trends reverse is a more practical approach.

The presence of volume confirms trends, indicating that there is a demand for the stock. Tsai noted that human psychology plays a critical role in the stock market, and positive or negative news is already discounted in the share price as long as it is public information.

For novice investors, Tsai suggested buying at the breakout point, which occurs when a stock price moves above a resistance area, indicating the potential for an upward trend. Tsai also cautioned investors to have a sound exit strategy and to identify patterns for buying and exiting stocks. First-time investors may benefit from opening an account with BDO Securities and taking advantage of technical analysis-based resources such as Technically Speaking commentaries and tutorial videos.