What is technical analysis

What is technical analysis

Technical analysis is a method for analyzing tradable assets in order to predict future price movements. Technical analysis attempts to interpret market psychology by analysing the balance between supply and demand, i.e. the balance between buyers and sellers. Technical analysis is only interested in supply and demand, and only uses historical price and volume movements.

Technical analysis therefore only uses various price charts and indicators in order to analyse supply and demand. Technical analysis uses the same principles and analysis tools for all financial markets.

Price is a continuous struggle between buyers and sellers. When there is a surplus of buyers, i.e. rising demand, the price rises. When there is a surplus of sellers, i.e. rising supply, the price falls.

Technical analysis is about being on the right side of the market. If demand will rise, you want to buy early. If supply will rise, you want to sell early.

Why does technical analysis work?

The foundation of technical analysis is the fact that price movements are not entirely random. Had they been, it would not have been possible to predict any price movements.

Price movements make patterns, i.e. trends and formations, that can be identified. And these patterns repeat themselves. Technical analysis attempts to identify trends and price formations in order to use the patterns for e.g. stock trading.
Identifying a rising trend allows you to find good buying opportunities when rising prices are expected in the future. And similarly to find good sales opportunities when falling prices are expected in the future.

Price movement patterns repeat themselves because investors’ psychological mechanisms do not change. Therefore a price formation, for example, indicates a specific price movement.

Fear of losses and greed for profit have always influenced people in various markets. Technical analysis attempts to determine which sentiment is currently valid for which market, ranging from fear to greed.

Why Investtech?

  • Investtech offers automatically generated technical analyses of stocks, indices, commodities and currencies.
  • Investtech’s analyses are objective and consistent because they are done by mathematical algorithms in computers.
  • The analyses are time-saving.
  • Investtech’s analyses have been proven to give good return over time.
 


Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer. The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.


Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer. The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.

Titlex

OK
+

Cookie consent

We use cookies to give you a better user experience. If you continue to use the website, you accept this. For further details click here.

Our use of cookies

When you use our website, we store a cookie on your device. The cookie is used to recognize your device so that your settings work when you use our websites. The information that is stored is completely anonymised. Cookies are automatically deleted after a certain time.

Necessary cookies

Investtech uses cookies to ensure basic functions such as page navigation and language selection. Without such cookies, the website does not function as it should. You cannot therefore make a reservation against these. If you still want to disable such cookies you can do so in your browser settings. In the Cookies section add this website to the list of sites which are not allowed to save cookies on your device.

Cookies from Google

We use services from Google Analytics and Google AdWords. These register cookies on your device when you visit our website. Google registers your IP address in order to keep statistics on user activity on the website. The IP address is anonymised, so that we have no opportunity to link the activities to a specific person. We use these statistics to be able to offer more interesting content on the website and to constantly improve ourselves. Google AdWords collects data so that our advertising on other websites gives better results. We cannot trace the data of individuals.

Allow cookies from Google