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Wednesday, November 2, 2011

What is Technical Analysis?

Technical Analysis is the way of predicting price changes of a financial instrument by analyzing prior price movements and looking for patterns and relationship in price history. The basic premise of technical analysis is that the price discounts all information available in the market and that patterns in price movements tend to repeat themselves.

Another important foundation of technical analysis is that price movements are not random but tend to trend in some direction most of the time.

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