Technical analysis in trading

What is technical analysis in trading?

Technical analysis is a method of analysing financial markets based on historical price and volume data. The basic idea is that past prices can help predict future price movements.

The main tools of technical analysis are price charts, indicators and chart patterns. Price charts allow traders to visually track price changes in the market. Indicators, such as moving averages and stochastics, help identify trends and periods of overbought or oversold markets. Chart patterns such as head and shoulders or triangles are used to predict future price movements based on past patterns.

Technical analysis is widely used by traders in the forex market, stock market and commodities market. It helps traders make decisions about entering and exiting positions, determine stop-loss and take-profit levels, and manage risk.