Technical analysis

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In finance, technical analysis is an analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.wikipedia
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Analysis

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In finance, technical analysis is an analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.

Dow theory

Dow theory is based on the collected writings of Dow Jones co-founder and editor Charles Dow, and inspired the use and development of modern technical analysis at the end of the 19th century. Adherents of different techniques (for example: Candlestick analysis, the oldest form of technical analysis developed by a Japanese grain trader; Harmonics; Dow theory; and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one technique.
The Dow theory on stock price movement is a form of technical analysis that includes some aspects of sector rotation.

Fundamental analysis

fundamentalfundamentalseconomic fundamentals
The efficacy of both technical and fundamental analysis is disputed by the efficient-market hypothesis, which states that stock market prices are essentially unpredictable.
These terms are used to distinguish such analysis from other types of investment analysis, such as quantitative and technical.

William Delbert Gann

W. D. GannGann
Other pioneers of analysis techniques include Ralph Nelson Elliott, William Delbert Gann and Richard Wyckoff who developed their respective techniques in the early 20th century.
William Delbert Gann (June 6, 1878 – June 18, 1955) or WD Gann, was a finance trader who developed the technical analysis methods like the Gann angles and the Master Charts, where the latter is a collective name for his various tools like the Square of Nine, the Hexagon Chart, and the Circle of 360.

Market trend

bear marketbull marketmarket trends
Using charts, technical analysts seek to identify price patterns and market trends in financial markets and attempt to exploit those patterns.
Traders attempt to identify market trends using technical analysis, a framework which characterizes market trends as predictable price tendencies within the market when price reaches support and resistance levels, varying over time.

Charles Dow

Charles Henry DowCharles H. Dow
In the 1920s and 1930s, Richard W. Schabacker published several books which continued the work of Charles Dow and William Peter Hamilton in their books Stock Market Theory and Practice and Technical Market Analysis.
He developed a series of principles for understanding and analyzing market behavior which later became known as Dow theory, the groundwork for technical analysis.

Point and figure chart

Point and figure chartspoint-and-figure
Charles Dow reportedly originated a form of point and figure chart analysis.
Point and figure (P&F) is a charting technique used in technical analysis.

Technical indicator

indicatorindicatorstrading indicator
Technicians using charts search for archetypal price chart patterns, such as the well-known head and shoulders or double top/bottom reversal patterns, study technical indicators, moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns.
In technical analysis, a technical indicator is a mathematical calculation based on historic price, volume, or (in the case of futures contracts) open interest information that aims to forecast financial market direction.

Moving average

exponential moving averagesimple moving averageWeighted moving average
Technicians using charts search for archetypal price chart patterns, such as the well-known head and shoulders or double top/bottom reversal patterns, study technical indicators, moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns. Examples include the moving average, relative strength index, and MACD. Technical analysis employs models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price correlations, business cycles, stock market cycles or, classically, through recognition of chart patterns.
For example, it is often used in technical analysis of financial data, like stock prices, returns or trading volumes.

MACD

Moving Average Convergence/Divergence (MACD)Moving average convergence/divergence indicator
Examples include the moving average, relative strength index, and MACD.
MACD, short for moving average convergence/divergence, is a trading indicator used in technical analysis of stock prices, created by Gerald Appel in the late 1970s.

Double top and double bottom

Double topdouble top / double bottomdouble top/bottom
Technicians using charts search for archetypal price chart patterns, such as the well-known head and shoulders or double top/bottom reversal patterns, study technical indicators, moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns.
Double top and double bottom are reversal chart patterns observed in the technical analysis of financial trading markets of stocks, commodities, currencies, and other assets.

Cup and handle

Technicians using charts search for archetypal price chart patterns, such as the well-known head and shoulders or double top/bottom reversal patterns, study technical indicators, moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns.
In the domain of technical analysis of market prices, a cup and handle or cup with handle formation is a chart pattern consisting of a drop in the price and a rise back up to the original value, followed a smaller drop and a rise past the previous peak.

Candlestick chart

candlestick techniquesJapanese candlestickscandlestick
In Asia, technical analysis is said to be a method developed by Homma Munehisa during the early 18th century which evolved into the use of candlestick techniques, and is today a technical analysis charting tool.
Candlestick charts are most often used in technical analysis of equity and currency price patterns.

Ralph Nelson Elliott

Ralph Elliott
Other pioneers of analysis techniques include Ralph Nelson Elliott, William Delbert Gann and Richard Wyckoff who developed their respective techniques in the early 20th century.
Ralph Nelson Elliott (28 July 1871 – 15 January 1948) was an American accountant and author, whose study of stock market data led him to develop the Wave Principle, a form of technical analysis that identifies trends in the financial markets.

Stock market cycles

history repeats itselfmarket rhythms
Technical analysis employs models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price correlations, business cycles, stock market cycles or, classically, through recognition of chart patterns.
They are key to technical analysis where the approach to investing is based on cycles or repeating price patterns.

Market sentiment

bullishbearishsentiment
These surveys gauge the attitude of market participants, specifically whether they are bearish or bullish.
This attitude is the accumulation of a variety of fundamental and technical factors, including price history, economic reports, seasonal factors, and national and world events.

John Bollinger

Bollinger, John
One advocate for this approach is John Bollinger, who coined the term rational analysis in the middle 1980s for the intersection of technical analysis and fundamental analysis.
John A. Bollinger (born 1950) is an American author, financial analyst, contributor to the field of technical analysis and the developer of Bollinger Bands.

Head and shoulders (chart pattern)

head and shouldershead and shoulders formationsHead and shoulders top and bottom
Technicians using charts search for archetypal price chart patterns, such as the well-known head and shoulders or double top/bottom reversal patterns, study technical indicators, moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns.
On the technical analysis chart, the Head and shoulders formation occurs when a market trend is in the process of reversal either from a bullish or bearish trend; a characteristic pattern takes shape and is recognized as reversal formation.

Financial market

financial marketsmarketmarkets
The principles of technical analysis are derived from hundreds of years of financial market data.
This is the basis of the so-called technical analysis method of attempting to predict future changes.

Drummond geometry

Some techniques such as Drummond Geometry attempt to overcome the past data bias by projecting support and resistance levels from differing time frames into the near-term future and combining that with reversion to the mean techniques.
Drummond geometry is a trading method consisting of a series of technical analysis tools invented by the Canadian trader Charles Drummond starting in the 1970s and continuing to the present (2010).

Jesse Lauriston Livermore

Jesse Livermore
Jesse Livermore, one of the most successful stock market operators of all time, was primarily concerned with ticker tape reading since a young age.
In a time when accurate financial statements were rarely published, getting current stock quotes required a large operation, and market manipulation was rampant, Livermore used what is now known as technical analysis as the basis for his trades.

Quantitative analysis (finance)

quantitative analysisquantitativequantitative analyst
Behavioral economics and quantitative analysis use many of the same tools of technical analysis, which, being an aspect of active management, stands in contradiction to much of modern portfolio theory.

Elliott wave principle

Elliott waveElliott Wave TheoryElliot Wave Theory
Adherents of different techniques (for example: Candlestick analysis, the oldest form of technical analysis developed by a Japanese grain trader; Harmonics; Dow theory; and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one technique.
The Elliott wave principle is a form of technical analysis that finance traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors.

Average true range

true range
Average true range (ATR) is a technical analysis volatility indicator originally developed by J. Welles Wilder, Jr. for commodities.

Support and resistance

supportresistanceSupport (technical analysis)
A Federal Reserve working paper regarding support and resistance levels in short-term foreign exchange rates "offers strong evidence that the levels help to predict intraday trend interruptions", although the "predictive power" of those levels was "found to vary across the exchange rates and firms examined".
In stock market technical analysis, support and resistance are certain predetermined levels of the price of a security at which it is thought that the price will tend to stop and reverse.