What is Technical Analysis?

Technical analysis is a trading discipline that evaluates investments and identifies trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. It operates on the assumption that historical price action and patterns can indicate future market behavior.

Key Components

Chart Analysis

• Price patterns
• Support and resistance
• Trend lines
• Chart formations
• Candlestick patterns

Technical Indicators

• Moving averages
• Momentum indicators
• Volume studies
• Oscillators
• Volatility indicators

Core Principles

Main Assumptions

• Market action discounts everything
• Prices move in trends
• History tends to repeat
• Volume confirms trends

Application Areas

• Entry/exit timing
• Trend identification
• Price target setting
• Risk management
• Market strength analysis

Related Terms

• Chart Patterns
• Market Analysis
• Volume Analysis
• Price Action