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Technical Analysis
What does it mean?
A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts to identify patterns that can suggest future activity.
In Other Words...
Technical analysts believe that the historical performance of stocks and markets are indications of future performance.
In a shopping mall, a fundamental analyst would go to each store, study the product that was being sold, and then decide whether to buy it or not. By contrast, a technical analyst would sit on a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, his or her decision would be based on the patterns or activity of people going into each store.
Related Links
Introduction to Technical Analysis - Here is an easy-to-understand tutorial on the various tools used in technical analysis, including moving averages, RSI, Bollinger bands, stock chart patterns, and much more.
Related Terms
Bollinger Bands | Chartist | Cup and Handle | Fundamental analysis | Head and Shoulders | Indicator | Moving Average | Technically Strong Market | Technically Weak Market
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