Trader's Glossary

Technical Analysis

Technical analysis is a method of market analysis primarily focusing on the internal factors that affect the price of a security. This school of analysis observes three central principles.

1. That everything an investor needs to know about an asset has already been factored into its market price.

2. That price action moves according to directional trends (up, down, lateral and combinations of all three).

3. That history tends to repeat itself. In other words that collectively investors react similarly in similar situations.