Technical analysis is one method for predicting future price movements and works by observing past price data. A few assumptions, not always accepted, underpin technical analysis: that all relevant market data is included in the price, that prices move in patterns called trends, and that psychological phenomena such as support and resistance have an impact on market activity. Traders can use technical analysis in various financial markets, such as stocks, bonds, forex, and more.
Traders use technical analysis to predict future price moves. The techniques involved can include oscillators, candlestick charting, support and resistance based on trend lines, and other tools. All these use publicly available price data to identify the beginning and end of trends, as well as momentum within the trend, to see if one is likely to reverse or continue. Practitioners claim that this data allows them to accurately predict future market movements.
Not everyone agrees with the claims of technical analysis, with other traders preferring to use fundamental economic factors to influence their trading decisions. Disagreements between technical and fundamental traders are a normal occurrence, but many traders have devised strategies that combine both.
For example, a trader might use fundamental criteria to identify a list of currencies he expects to outperform, then use technical strategies to find entry points, take profit levels and set stop losses. This sort of combined strategy allows traders to benefit from both strategies simultaneously.
ADSS offers a range of global markets for traders, with opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.