•Technical analysis involves examining a security's price movements and patterns to predict its future direction. Traders analyze historical price data using charts and various indicators to identify trends, support and resistance levels, and potential trading opportunities.
•Technical analysis is based on the idea that past price behavior can provide insights into future movements. Traders rely on charts to visualize price trends and patterns, such as head and shoulders, double tops, or flags. They also use indicators like moving averages, relative strength index (RSI), and Bollinger Bands to assess momentum, volatility, and potential entry or exit points. Unlike fundamental analysis, which evaluates a company's financials and economic factors, technical analysis focuses solely on price action and market psychology.