Introduction to Technical Analysis

Definition and Purpose of Technical Analysis:

Technical analysis involves analyzing historical price data and trading volume to forecast future price movements. It is used to identify trends, patterns, and potential trading opportunities.

Key Concepts and Principles:

• Price Trends: The general direction in which an asset’s price is moving.
• Support and Resistance: Price levels where an asset tends to find buying or selling pressure.
• Chart Patterns: Visual patterns formed by price movements, used to predict future trends.

Differences Between Technical and Fundamental Analysis:

While fundamental analysis evaluates an asset’s intrinsic value, technical analysis focuses on price patterns and market behavior. Both approaches can complement each other in making investment decisions.