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Technical Analysis Methods

Technical Analysis Methods

Technical analysis is a process used to quantify the price action on the chart of a security and identify trading and investing opportunities based on the patterns created by buyers and sellers. Technical analysts believe past and present trading activity in price changes can be used to create an edge for what will happen next based on what is happening now. Technical analysts try to establish a higher probability of one thing happening over another or to create a good risk/reward ratio through trade entry and management as it plays out.

Elliott Wave Theory

Elliott Wave Theory

The Elliott Wave theory is a method of technical analysis that tries to quantify repeating long-term price action patterns correlated to changes in market psychology and sentiment. This theory attempts to identify primary impulse waves showing the long-term chart trend and also corrective reversal waves that are inverse to that larger trend.