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BEGINNERTechnical Analysis 25 min · 3 chapters
Introduction to Technical Analysis
The core assumptions behind technical analysis, what it can and cannot tell you, and how it fits into a broader research process.
Chapter 1 of 3
BEGINNERWhat technical analysis actually is
Technical analysis is the study of historical price and volume data to identify patterns that may recur. It rests on three assumptions: that price reflects all currently available information, that prices tend to move in trends rather than pure randomness, and that historical patterns have some tendency to repeat because they reflect recurring aspects of crowd psychology.
None of these assumptions are proven laws -- they are working hypotheses. Treating technical analysis as a probabilistic tool, not a predictive one, is the difference between using it responsibly and being misled by it.