Technical Analysis (redirected from Rule Based Trading)

Technical analysis

Security analysis that seeks to detect and interpret patterns in past security prices.

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technical analysis

The study of relationships among security market variables, such as price levels, trading volume, and price movements, so as to gain insights into the supply and demand for securities. Rather than concentrating on earnings, the economic outlook, and other business-related factors that influence a security's value, technical analysis attempts to determine the market forces at work on a certain security or on the securities market as a whole. Compare fundamental analysis.

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Technical Analysis

The practice of using statistics to determine trends in security prices and make or recommend investment decisions based on those trends. Technical analysis does not attempt to determine the intrinsic value of securities, but instead focuses on matters such as trade volume, demand, and volatility. Technical analysts evaluate short-term trends almost exclusively, which is both a strength and a weakness in their analysis. They are sometimes called chartists because of the importance charts have in technical analysis. See also: Fundamental analysis.

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Technical analysis. Technical analysts track price movements and trading volumes in various securities to identify patterns in the price behavior of particular stocks, mutual funds, commodities, or options in specific market sectors or in the overall financial markets.

The goal is to predict probable, often short-term, price changes in the investments that they study, which allows them to choose an appropriate trading strategy.

The speed and accuracy with which the analysts create their tracking charts has been enhanced by the development of increasingly sophisticated software.

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Technical Analysis

What Does Technical Analysis Mean?

A method of evaluating securities by analyzing statistics and data such as historical prices and trading volumes. Technical analysts do not attempt to measure a security's intrinsic value but instead use charts, graphs, and other analytic tools to identify patterns that they believe will help predict future activity.

Investopedia explains Technical Analysis

Technical analysts believe that the historical performance of stocks and markets provides indications of future performance. In a shopping mall, a fundamental analyst would go to each store, study the product that was being sold, and then decide whether to buy the store. By contrast, a technical analyst would sit on a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, he or she would base the decision on the patterns or activity of people going into each store.

Related Terms:
• Behavioral Finance
• Fundamental Analysis
• Head and Shoulders Pattern
• Moving Average
• Quantitative Analysis