Technical analysis is basically all about the analysis of prices and their behaviour. These price actions depict patterns on charts and because human behavior is notoriously repetitive in nature, these price patterns can also be seen as very repetitive as well. By being aware of this important element definitely puts the odds in our favour right from the start.

You can choose from a variety of chart types that are readily available. The Japanese candlestick charts I have found by far are the easiest to utilise and could quite possibly be the one chart that you will use the most.

There are entire books devoted to the study of these candlestick patterns - if you are really serious about studying candlestick charts, Just take a look at the free books available on www asxnewbie.com.

Support and Resistance:

This is one of the most important concepts in technical analysis. Support and Resistance forms the very basic foundation for nearly every trading decision you will make. To give it full coverage would require many pages but I will limit myself to some very basic definitions and just a couple examples:

Support level:

This is a price level that a declining market or stock has failed to penetrate and has rebounded off at this level.
Example: the low of the previous day forms an line of support and this price level is often frequently used as a stop loss.

Resistance level:

This is a price level that a rising market or stock has failed to break through and has rebounded off it and headed back downwards.
Example: a previous high in an uptrend forms an area of resistance and this can be used as a minimum future objective to take some profits once that level is eventually reached.

Here is a simple 5 Step process to help get you started out on the right track..

1. Finding a stock.

This is the most obvious and most difficult step in stock trading. With well over 10,000 stocks to trade in a good guideline is to consider first in which sector you wish to trade in first.Of course you would be looking at a sector that is receiving good media coverage and in which the stocks concerned are going in in value.It stands to reason that you would not be looking too hard at a sector that was experiencing a severe downturn.Once you have decided in which sector you want to invest in, you can then commence to start researching for a stock.It is always best to have a system of rules already in place that will be used before buy each stock.

2. Fundamental Analysis.

A lot of short term traders might argue with the need to do any Fundamental Analysis at all, however knowing the stocks past history and the latest up to date news regarding the stock can be very crucial.A good example would be the earnings season. If you are planning on buying a stock that has missed its earnings target the last 3 quarters, I dare say caution might be very wise.

3. Technical Analysis.

This is the part where the indicators play a part. Stochastics, the MACD, volume, moving averages, RSI, CCI, support levels, resistance levels and all the rest. Whichever batch of indicators you choose, whether they are lagging or leading, may entirely hinge on where you get your information from.Keep it very simple when you first start out, for using too many indicators in the first place is a guarantee to achieve big losses. Get comfortable using one or two indicators first. Learn their intricacies thouroughly, and you'll be on the road to making more profitable trades.

4. Follow your choices.

Once you have committed to a couple of trades you should then start to manage them properly. For instance if the stock is meant to be a short term trade you would then obviously be watching it more closely for your exit signals. If it's a longer term trade you then of course need to set up different time frames such as weekly or monthly checkups on the stock.This effectively frees you up and gives you more time to do other things.You can use this time wisely for keeping up to date with the news, determining your price targets, set stop losses, and keeping an eye on other stocks that you may want to purchase in the future.

5. Keeping an eye on the bigger picture.

This is best achieved by following the particular sector in which you bought your shares .For instance, if you are expecting a share price to go up on an oil stock you purchased and nearly all of the other stocks in oil sector are also rising, then this is cofirmation that you may have made the right decision.