Technical analysis is the name given to one of the techniques use to forecast how prices are likely to perform moving forward in the stock market. It works by analyzing data of past performance, using various criteria. Most often the criteria focused on are price, volume and time. Much of the study is completed through the study of charts, and analysts are often referred to as "chartists" for this reason. WallStreetWindow.com specializes in it.
For many, technical analysis lacks any real theory that underpins it, and is subsequently without credence. However, others argue that its results are justification enough, and point to its correlation to behavioral finance.
Another objection to the technique rests upon how, if it is so sound a function, that automatic trading strategies should be a matter of course in its development; that this is yet to be the case is held up as proof is doesn't work.
However, other arguments exist of course; most commonly how to prove that technical analysis was the reason for success. Chartists counter this by providing back testing evidence, tough this is often dismissed as nothing more than conjuncture.
The basic argument for those supporting the technique, is that it just makes sense to study past performance, pricing trends, and any areas where upon a variant and a constant can be linked. Trends in the markets do occur regularly; this is just an accepted fact; understanding where these trends are going to recur is merely applying a technique.
Advocates of the system, and objectors to it, do seem to come together in some sort of agreement however. Whilst both have very differing views, both state that technical analysis should be used not as standalone technique, but more just one of several weapons to understand fluctuations in the market and apply strategy effectively. - 29971
For many, technical analysis lacks any real theory that underpins it, and is subsequently without credence. However, others argue that its results are justification enough, and point to its correlation to behavioral finance.
Another objection to the technique rests upon how, if it is so sound a function, that automatic trading strategies should be a matter of course in its development; that this is yet to be the case is held up as proof is doesn't work.
However, other arguments exist of course; most commonly how to prove that technical analysis was the reason for success. Chartists counter this by providing back testing evidence, tough this is often dismissed as nothing more than conjuncture.
The basic argument for those supporting the technique, is that it just makes sense to study past performance, pricing trends, and any areas where upon a variant and a constant can be linked. Trends in the markets do occur regularly; this is just an accepted fact; understanding where these trends are going to recur is merely applying a technique.
Advocates of the system, and objectors to it, do seem to come together in some sort of agreement however. Whilst both have very differing views, both state that technical analysis should be used not as standalone technique, but more just one of several weapons to understand fluctuations in the market and apply strategy effectively. - 29971
