what is technical analysis

Technical analysis is a trading discipline that seeks to identify trading opportunities by analyzing statistical data gathered from trading activity. It is a method of analyzing and forecasting the direction of prices through the study of past market data, primarily price and volume. Technical analysis is used to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. Unlike fundamental analysis, which attempts to evaluate a securitys value based on business results such as sales and earnings, technical analysis focuses on the study of price and volume. Technical analysis can be applied to any security with historical trading data, including stocks, futures, commodities, fixed-income, currencies, and other securities. The principles of technical analysis are derived from hundreds of years of financial market data. Technical analysis has achieved broad acceptance among regulators and the academic community, particularly with regard to its behavioral finance aspects. Technical analysis is not only used by technical traders, but also by many fundamental traders who use fundamental analysis to determine whether to buy into a market, and then use technical analysis to pinpoint good, low-risk buy entry price levels.