Technical analysis is the study of the price movement and patterns of a security. By scrutinizing a security's past price action, primarily through charts and indicators, traders can forecast future price direction.

Frequently Asked Questions

  • What is technical analysis?

    Technical analysis is an investing method that is used to evaluate investments and identify trading opportunities in price tre🎀nds and patterns by using charts. By tracking price and t🐓rading volume, investors can recognize patterns that help them guide their trading decisions.

  • What is a line graph?

    A line graph connects various data points to show specific patterns over a defined time horizon of interest for an invesᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚtor, and can also be known as a line plot or line chart. For investors, the data is used to create a visual representation of a company’s historical stock price moves.

  • What is an average return?

    An average return is a measure or indicator that helps investors and analysts gauge what the returns for a particular stock or security has൲ been over a set period of time. In sum,💖 it is the average return calculated over a time period of interest to the investor.

  • How do you build a trading indicator?

    Trading indicators are tools that an investor can use to help gauge future perform🌌ance of a stock or security. Two of the most common parts of an indicator are to build a unique indicator to uses patterns and common cha🎀rt patterns to recognize trends, and to use mathematical functions to predict future support and resistance levels of stock prices.

  • What is relative strength?

    Relative strength involves selecting investments that have been outpe🐟rforming the market and is used by technical analysts and value investors to inform their investing decisions. Relative s🐼trength investors generally believe that the trend of outperformance will continue, which is why they are sometimes referred to as momentum investors.

  • What is a hockey stick chart?

    In trading circles, a hockey stock chart is a price line chart that looks like a hockey s🎃tock, which depicts a sharp risꦗe in prices after a short period of stability. As one can guess, this is illustrated by a chart that looks like a hockey stick with a short, curved blade, attached to a long stick that rises at an angle.

Key Terms

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Exponential Moving Average (EMAV)
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Arithmetic Mean
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Average True Range
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Candlestick
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MACD
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