Security analysis methodology used to forecast the prices direction based on the past market data study.
Security analysis methodology used to forecast the prices direction based on the past market data study, mainly the asset price and the relative volume.
It is mainly based on several techniques that allow to analyze charts by seeking to identify market trends in financial markets and to exploit those price patterns. Some of the most famous patterns are the head & shoulders pattern and the top/bottom patterns; another famous technique implies the use of market indicators, as, for instance, moving averages, support and resistance level, channels etc.
The forecast accuracy of both technical and fundamental analysis is disputed by the efficient market hypothesis, according to which the entirely unpredictable and cannot be forecasted.