What is Technical Analysis in Finance?

• Technical Analysis is the art and science of forecasting future prices based on an examination of the past price movements. 
• Method of evaluating securities by analysing the statistics generated by market activity, such as past prices and volume.
• Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. 
• Search for identifiable and recurring stock price patterns. 
• Believes that share prices are determined by the demand and supply forces operating in the market. 
• Concentrate on the movement of share prices – examining past share price movements, future share prices can be accurately predicted. 
• Prices move in trends or waves which may be upward or downward. 
• A rational behind is that – share price behaviour repeat itself over time and analys attempt to drive methods to predict this repetition. 
• The time frame in which technical analysis is applied may range from – 1 min, 5 min, 10 min, 15 min, 30 min, 1 hour etc, daily, weekly etc. 

The basic and necessary assumptions regarding technical analysis 

1. The price discounts everything – each price represents a momentary consensus of value of all market participants – large commercial interests, speculators, fundamental researchers, technicians, gamblers at the moment of transaction. 
2. Price moves in trends
3. History tends to repeat itself. 
4. What is more important than why

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