Definitions

Technical Analysis

Posted By: TradersLog

An approach to forecasting prices that examines patterns of price change, rates of change, and changes in volume of trading and open interest, without regard to underlying fundamental market factors.

Technical analysis is based on the following premises:

- Market action takes everything into account – anything that can influence price is reflected in the market price.

- Prices move in trends.

- History continues to repeat itself.

Technical analysis can work consistently only if the theory that price movements are a Random Walk is incorrect.

See also: Technical Analysis Articles , Fundamental Analysis

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