What are the principles of Technical analysis?

Market action discounts everything: Technical analysts believe that all available information, including economic data, political events, and investor sentiment, is reflected in the price of a security. Therefore, they focus on analyzing market data, such as price and volume, to make investment decisions.

Prices move in trends: Technical analysts believe that prices tend to move in trends, either up or down. These trends can be short-term or long-term and can be identified through the use of technical indicators and chart patterns.

History repeats itself: Technical analysts believe that market patterns and trends tend to repeat themselves over time. Therefore, they use historical market data to identify patterns that can help predict future market movements.

Volume confirms price: Technical analysts believe that trading volume is an important indicator of market sentiment and can help confirm the validity of price trends. For example, if a stock price is increasing on high trading volume, it may indicate that there is strong investor interest in the stock.

Support and resistance levels: Technical analysts believe that price levels where the market has previously found support or resistance can act as important indicators of future price movements. Support levels are price levels where buying is expected to be strong, while resistance levels are price levels where selling is expected to be strong.

Overall, the principles of technical analysis are focused on analyzing market data, identifying trends and patterns, and using this information to make informed investment decisions.