What Is Technical Analysis?
Technical analysis is the study of historical market data, including price and volume. Using insights from market psychology, behavioral economics, and quantitative analysis, technical analysts aim to use past performance to predict future market behavior. The two most common forms of technical analysis are chart patterns and technical (statistical) indicators.
How to Use Technical Analysis
The core principle underlying technical analysis is that the market price reflects all available information that could impact a market. As a result, there's no need to look at economic, fundamental, or new developments since they're already priced into a given security. Technical analysts generally believe that prices move in trends and history tends to repeat itself when it comes to the market's overall psychology. The two major types of technical analysis are chart patterns and technical (statistical) indicators.
Chart patterns are a subjective form of technical analysis where technicians attempt to identify areas of support and resistance on a chart by looking at specific patterns. These patterns, underpinned by psychological factors, are designed to predict where prices are headed, following a breakout or breakdown from a specific price point and time. For example, an ascending triangle chart pattern is a bullish chart pattern that shows a key area of resistance. A breakout from this resistance could lead to a significant, high-volume move higher.
How to Use Technical Analysis
The core principle underlying technical analysis is that the market price reflects all available information that could impact a market. As a result, there's no need to look at economic, fundamental, or new developments since they're already priced into a given security. Technical analysts generally believe that prices move in trends and history tends to repeat itself when it comes to the market's overall psychology. The two major types of technical analysis are chart patterns and technical (statistical) indicators.
Chart patterns are a subjective form of technical analysis where technicians attempt to identify areas of support and resistance on a chart by looking at specific patterns. These patterns, underpinned by psychological factors, are designed to predict where prices are headed, following a breakout or breakdown from a specific price point and time. For example, an ascending triangle chart pattern is a bullish chart pattern that shows a key area of resistance. A breakout from this resistance could lead to a significant, high-volume move higher.
Technical indicators are a statistical form of technical analysis where technicians apply various mathematical formulas to prices and volumes. The most common technical indicators are moving averages, which smooth price data to help make it easier to spot trends. More complex technical indicators include the moving average convergence divergence (MACD), which looks at the interplay between several moving averages. Many trading systems are based on technical indicators since they can be quantitatively calculated.
Leave a question for discussion: what are the limitations of technical analysis?
（wts：+eight five two nine seven six two two three one zero）
$Dow Jones Industrial Average(.DJI.US$ $Apple(AAPL.US$ $Alibaba(BABA.US$ $NIO Inc(NIO.US$ $Hang Seng Index(800000.HK$ $HKEX(00388.HK$ $SGX(S68.SG$ $TENCENT(00700.HK$ $BIDU-SW(09888.HK$ $BABA-SW(09988.HK$ $JD-SW(09618.HK$ $XIAOMI-W(01810.HK$ $GANFENGLITHIUM(01772.HK$
（wts：+eight five two nine seven six two two three one zero）
$Dow Jones Industrial Average(.DJI.US$ $Apple(AAPL.US$ $Alibaba(BABA.US$ $NIO Inc(NIO.US$ $Hang Seng Index(800000.HK$ $HKEX(00388.HK$ $SGX(S68.SG$ $TENCENT(00700.HK$ $BIDU-SW(09888.HK$ $BABA-SW(09988.HK$ $JD-SW(09618.HK$ $XIAOMI-W(01810.HK$ $GANFENGLITHIUM(01772.HK$
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
blur_guy : buying stock really need some guidance. if you meet someone who is willing to ghide your buy and sell, it is like making a new trustworthy friend. TA works if there is pattern.
agreed on company like BYD Should hold long term. they actually do ODM for Toyota.
they are the powerhouse.
Ally-LinOP blur_guy: Yes, many beginners feel they can do it without any instruction. This is a mistake and a waste of time
Evelynne : Technical analysis is too professional for me at this stage