Technical Analysis

Technical analysis is a form of security analysis that uses price and volume data in decision making.

The underlying logic of technical analysis:

1 Supply and demand determine prices.

2 Changes in supply and demand cause changes in prices.

3 Prices can be projected with charts and other technical tools.

Not require detailed knowledge of that instrument. Can be applied over any time frame.

Principles and Assumptions:

Market trends and patterns reflect irrational human behavior, they tend to repeat themselves and are predictable.

The market reflects the collective knowledge and sentiment of many varied participants and the amount of buying and selling activity in a particular security.

Assume market not efficient.