Charting and Technical Analysis

What is Technical Analysis?

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. Technical analysts believe that market trends, as shown by charts and other technical indicators, tend to repeat themselves because human psychology and emotions generally move in predictable patterns.

Technical analysis is based on the idea that market trends, as shown by charts and other technical indicators, tend to repeat themselves. Technical analysts use charts and other tools to identify patterns that can suggest future activity. They may also use various technical indicators, such as moving averages and oscillators, to help them identify trends. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

There are many different approaches to technical analysis, and different technical analysts may use different tools and techniques. Some common techniques include trend analysis, support and resistance levels, and chart patterns. Technical analysis can be used in conjunction with fundamental analysis, which is the analysis of a security's intrinsic value, or it can be used as a standalone method for evaluating securities.