What Is Technical Analysis? | 360 Stock Charts

What Is Technical Analysis?

Typical Stock Chart

Technical Analysis is the study on how security prices behave and how to use that information to trade and avoid losses. Technical analysis illustrates the classic economic theory of supply and demand in a visual manner, that also has a predicative value in its ability to forecast future price movements, or trends, often based on probabilities and sentiment in the markets. So instead of reading a company’s financial statements or analyzing the industry conditions, technical analysis focuses on the emotions and behaviors of the company’s investors.

It is like visual investing or a visual representation of how a stock behaves over time.

Technical analysis, or stock charting, utilizes a wide variety of indicators to help predict the future movement of a stock, for example, the relative strength index or RSI, moving average convergence-divergence, or MACD, and regressions.

via 360stockcharts.com