Technical Analysis

Technical analysis is a method of forecasting (a prediction or estimate of future) price movements and future market trends by studying charts of past market action. Technical analysis is concerned with what has actually happened in the market, rather than what should happen and takes into account the price of instruments and the volume of trading, and creates charts from that data to use as the primary tool. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously.

Technical analysis is built on three essential principles:

1-Market action discounts everything! This means that the actual price is a reflection of everything that is known to the market that could affect it, for example, supply and demand, political factors and market sentiment. However, the pure technical analyst is only concerned with price movements, not with the reasons for any changes.

2-Prices move in trends. Technical analysis is used to identify patterns of market behavior that have long been recognized as significant. For many given patterns there is a high probability that they will produce the expected results. Also, there are recognized patterns that repeat themselves on a consistent basis.

3-History repeats itself. chart patterns have been recognized and categorized for over 100 years and the manner in which many patterns are repeated.

Technical Analysis is the study of stock performance based on any number of technical theories. These theories have been developed by many stock market analyst over the years. One of the most noted theories is moving average.
Simply put, moving averages are average price levels above and below the current price. If the stock price crosses these levels then the analyst’s interpretation suggest that you should either buy or sell the stock in question.

There is no one theory that is always correct. As a trader, you should learn to judge when a theory works for you. Some people pick one theory and use it exclusively. Others use a combination of theories.

As always, we must caution you to do your research carefully. We have often found that when the market is very volatile, technical analysis doesn’t work for us while other traders believe that technical analysis is the only way to judge a stock.

Be careful, buyer beware.
Below, you will find major subjects on Technical Analysis, Technical Theories

Price Fields
Support & Resistance
Trends
Moving Averages
Indicators
Market Indicators
Line Studies
Periodicity
The Time Element
Absolute Breadth Index
Accumulation/Distribution
Accumulation Swing Index
Advance/Decline Line
Advance/Decline Ratio
Advancing/Declining, Unchanged Volume
Andrew’s Pitchfork
ARMS Index
Average True Range
Bollinger Bands
Breadth Thrust
Bull/Bear Ratio
Candlesticks, Japanese
CANSLIM
Chaikin Oscillator
Commodity Channel Index
Commodity Selection Index
Coorelation Analysis
Cummulative Volume Index
Cycles
Demand Index
Detrended Price Oscillator
Directional Movement
Dow Theory
Ease of Movement
Efficient Market Theory
Elliot Wave Theory
Envelopes (trading bands)
Equivolume
Fibonacci Studies
Four Percent Model
Fourier Transform
Fundamental Analysis
Gann Angles
Herrick Payoff Index
Interest Rates
Kagi
Large Block Ratio
Linear Regression Lines
MACD
Mass Index
McClellan Oscillator
McClellan Summation Index
Median Price
Member Short Ratio
Momentum
Money Flow Index
Moving Averages
Negative Volume Index
New Highs/Lows Cumulative
New Highs – New Lows
New Highs/Lows Ratio
Odd Lot Balance Index
On Balance Volume
Open Interest
Open-10 Trin
Option Analysis
Overbought/Oversold
Parabolic SAR
Patterns
Percent Retracement
Performance
Point & Figure
Positive Volume Index
Price & Volume Trend
Price Oscillator
Price Rate-of-Change
Public Short Ratio
Puts/Calls Ratio
Quadrant Lines
Relative Strenght – Comparitive
Renko
Speed Resistance Lines
Spread
Standard Deviation
STIX
Stochastic Oscillator
Swing Index
Three Line Break
Time Series Forecast
Tirone Levels
Total Short Ratio
Trendlines
TRIX
Typical Price
Ultimate Oscillator
Upside/Downside Ratio
Upside-Downside Volume
Vertical Horizontal Filter
Volatility, Chaikin’s
Volume
Volume Oscillator
Volume Rate-of-Change
Weighted Close
Williams’ Accumulation/Distribution
Williams’ %R
Zig Zag