What is Technical Analysis?

Technical analysis is a method of evaluating securities, such as stocks, currencies, or commodities, by analyzing statistics generated by market activity, such as past prices and volume. The goal of technical analysis is to identify patterns and trends in the market that can help traders make informed decisions about buying or selling securities.

Technical analysis is based on the idea that historical price movements and other market data can be used to predict future price movements. This analysis is typically done using charts and other tools that display market data visually, such as moving averages, trend lines, and oscillators.

Some traders use technical analysis exclusively, while others use it in conjunction with fundamental analysis, which involves examining a company`s financial and economic fundamentals, such as earnings, revenue, and industry trends. Technical analysis is a popular tool among short-term traders, who are looking for quick profits based on market fluctuations, but it can also be used by long-term investors as part of a broader investment strategy.