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What is Technical Analysis?

Technical analysis is the study of past market data — primarily price and volume — to forecast future price movements. Unlike fundamental analysis, which looks at a company's financials, TA focuses purely on chart patterns and statistical indicators.

Key Principles

Price discounts everything — All known information is already reflected in the price.

Price moves in trends — Markets tend to move in identifiable directions.

History tends to repeat — Chart patterns recur because market psychology doesn't change.

Why It Matters

As a trader, technical analysis gives you a framework for:

Identifying entry and exit points

Setting stop-losses and take-profit levels

Understanding market sentiment

Managing risk objectively