Technical analysis is a form of investment valuation that analyses past prices to predict future price action. Technical analysts believe that the collective actions ...TechnicalAnalysis–ABeginner’sGuidePredictingtheprobablefuturepricemovementofasecuritybasedonmarketdataHome›Resources›Knowledge›Trading&Investing›TechnicalAnalysis–ABeginner’sGuideWhatisTechnicalAnalysis?Technicalanalysisisatool,ormethodValuationMethodsWhenvaluingacompanyasagoingconcerntherearethreemainvaluationmethodsused:DCFanalysis,comparablecompanies,andprecedenttransactions,usedtopredicttheprobablefuturepricemovementofasecurity–suchasastockStockWhatisastock?Anindividualwhoownsstockinacompanyiscalledashareholderandiseligibletoclaimpartofthecompany’sresidualassetsandearnings(shouldthecompanyeverbedissolved).Theterms"stock","shares",and"equity"areusedinterchangeably.orcurrencypair–basedonmarketdata.Thetheorybehindthevalidityoftechnicalanalysisisthenotionthatthecollectiveactions–buyingandselling–ofalltheparticipantsinthemarketaccuratelyreflectallrelevantinformationpertainingtoatradedsecurity,andtherefore,continuallyassignafairmarketvaluetothesecurityPublicSecuritiesPublicsecurities,ormarketablesecurities,areinvestmentsthatareopenlyoreasilytradedinamarket.Thesecuritiesareeitherequityordebt-based.. PastPriceasanIndicatorofFuturePerformanceTechnicaltradersbelievethatcurrentorpastpriceactioninthemarketisthemostreliableindicatoroffuturepriceaction.Technicalanalysisisnotonlyusedbytechnicaltraders.ManyfundamentaltradersusefundamentalanalysisAnalysisofFinancialStatementsHowtoperformAnalysisofFinancialStatements.Thisguidewillteachyoutoperformfinancialstatementanalysisoftheincomestatement,todeterminewhethertobuyintoamarket,buthavingmadethatdecision,thenusetechnicalanalysistopinpointgood,low-riskbuyentrypricelevels. ChartingonDifferentTimeFramesTechnicaltradersanalyzepricechartstoattempttopredictpricemovement.Thetwoprimaryvariablesfortechnicalanalysisarethetimeframesconsideredandtheparticulartechnicalindicators