Analysis enables you to understand the market better. The are two types of analysis. a) Fundamental analysis and b) technical analysis. For Fundamental analysis we requires details about the company which may be available to company shareholders but not to all the traders. Hence making it difficult to analyse the the company completely, because of which we can get incorrect result. Technical analysis is based on the traded price and traded volume. These are available to all the traders instantly. This is transparent and hence more widely used in the market. It is based on market demand and supply.