Here is the **Beginner's Guide to Trading Analysis**, covering basic concepts, tools, and strategies, suitable for beginners to quickly grasp the core logic:
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### **I. Two Pillars of Trading Analysis**
1. **Technical Analysis**
- **Core Concept**: Price reflects all information, historical trends can predict the future.
- **Common Tools**:
- **Candlestick Chart**: Identify patterns (Head and Shoulders, Double Bottom, Flags, etc.).
- **Indicators**: Moving Averages (MA), RSI (Overbought/Oversold), MACD (Trend Momentum).
- **Volume**: Verify the effectiveness of price breaks.
- **Applicable Scenarios**: Short-term Trading, Swing Trading.
2. **Fundamental Analysis**
- **Core Concept**: Asset value is determined by economic, industry, and company data.
- **Key Data**:
- **Macroeconomic Data**: GDP, Interest Rates, Inflation, Employment Data.
- **Company Financial Reports**: Revenue, Profit, Liabilities, Cash Flow.
- **Industry Trends**: Policy Changes, Technological Innovations, Supply and Demand Relationships.
- **Applicable Scenarios**: Long-term Investment, Value Discovery.
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### **II. Practical Analysis Process**
1. **Define Trading Goals**
- Short-term (Intraday/Weekly) VS Long-term (Monthly/Yearly).
- Risk Preference: Conservative (Low Leverage) VS Aggressive (High Return).
2. **Multi-Timeframe Verification**
- **Example**: Look at the trend direction on the daily chart, find entry points on the 1-hour chart, set stop loss on the 15-minute chart.
3. **Signal Confirmation and Filtering**
- **Technical Aspect**: Price breaking support/resistance + RSI Divergence.
- **Fundamentals**: Earnings reports exceed expectations + favorable industry policies.
4. **Risk Management**
- **Single Trade Risk**: No more than 2% of the principal (e.g., $10,000 account, maximum loss per trade $200).
- **Stop Loss Setting**: Technical Levels (such as previous lows) or Volatility (ATR Indicator).
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### **III. Common Misconceptions and Solutions**
- **Misconception 1**: Over-reliance on a single indicator
→ **Solution**: Combine price patterns + 2-3 complementary indicators (such as MACD + Bollinger Bands).
- **Misconception 2**: Ignoring Market Sentiment
→ **Solution**: Pay attention to news events (such as Federal Reserve meetings), VIX Fear Index.
- **Misconception 3**: Frequent Trading
→ **Solution**: Develop a trading plan, with a maximum of 3 trades per day.
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### **IV. Recommended Tools and Resources**
1. **Free Platforms**: TradingView (Chart Analysis), Investing.com (Economic Calendar).
2. **Backtesting Tools**: Backtrader (Python Quantitative), MetaTrader Strategy Tester.
3. **Books**: (Japanese Candlestick Charting Techniques) (Classic in Technical Analysis), (The Intelligent Investor) (Cornerstone of Value Investing).
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### **V. Psychological Discipline**
- **Iron Rule**: Do not increase positions when losing, do not be greedy when winning.
- **Emotional Control**: Keep a trading log, review the decision logic of each trade.
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**Summary**: Trading analysis is a combination of science + art. It is recommended to use a demo account to validate strategies initially, and gradually accumulate experience before investing real money. Keep learning and avoid the mindset of 'one trick pony'; the market is always evolving.