Technical Analysis

An effort to forecast prices by analyzing market data, i.e. historical price trends and averages, volumes, open interest.

The market data or price will be plotted on a chart. The analysis can be done on all time frames such as from minute to minute, or days or even months.

One part of the technical analysis is the study of trends. Lines may be drawn to indicate trend lines.

Support and resistance can be identified by drawing horizontal lines at previous highs and lows.

The market data can be analysed by technical indicators. There are many such indicators, but some of the most common are: Moving averages, Bollinger bands, Relative strength index (RSI) and Moving average convergence/divergence (MACD).

Technical analysis can be done in many markets such as the stock markets, futures market and Forex.

It does not take into account fundamental economic data such as earnings and debt.

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