What Is Technical Analysis?

Technical analysis is the technique of analyzing an asset based on the statistics of its trading pattern and history. This includes things such as:

  • Candlestick Charts
  • Support & Resistance Lines
  • MACD

The idea behind technical analysis is that the historical movements, trends and patterns of an asset can give you some idea of the future behavior of the asset price. This is a flaw as although assets USUALLY repeat their historical behavior, past activities are no guarantee of future behavior. Traders who use technical analysis tend to rely heavily on charts and trading data.

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