Most of the stock market beginners have no ideas as to how to pick a stock and they generally try to use their gut feel to find a good stock or they generally ask for a friends recommendation. Read on to find out how technical analysis can help you and that in turn will mean that you will be able to pick stocks using the stock price.

Technical analysis in simple words is the way in which you can very easily use the statistical data and statistical tools to predict the future price movements of the stock using the past stock price movements.

This is very different from the fundamental analysis of the stock in the sense that it does rely on the value, growth or the income or even the expertise of the management of company to predict the future stock price of the company.

That said there are three main things on which the technical analysis generally works. The first one is the assumption that the market price of a stock is always discounted. The other assumption is that in the stock price movement you can always discover a trend. The third main assumption is that the market movement can mirror what happened in the history, essentially meaning that the history repeats itself and it is assumed to be very true in the case of stock price movements.

There are various types of charts that are plotted in the technical analysis of the stock price. These stock charts are the OHLC charts or also called the open high low close charts. Then there are the candlestick charts which are used by most professional technical analysts. Then there are the line charts which are very commonly used.

The trending of the price will form various trends and these trends are named as head and shoulders, cup and handle, double tops and bottoms, triangles, rounding bottoms and triple tops. All these types indicate certain behaviors and technical analysts keep looking out for these formations to either buy or sell a particular stock.

There are a lot of software programs available in the market which can be used to plot the technical analysis charts. These programs can help you easily research a large number of stocks in a matter of minutes.

As a beginner you should always use the market news coupled with the technical analysis to make an intelligent stock related decision.