Technical Analysis

Abstract

Technical analysis is grounded in the notion that price data alone is all that is needed to forecast future price movements. While simple in theory, technical analysis is extremely complex in practice. There are dozens of basic technical trading strategies, incorporating hundreds of tools and thousands of different iterations. To master (let alone attempt to utilize) more than a handful of these tools would be unrealistic or even counterproductive. Accordingly, in the sections that follow, I have tried to pare down the vast spectrum of technical analysis strategies into a manageable number, with an emphasis on those that are easy to use, quantitative, and compatible with fundamental analysis.