What is Technical Analysis?

Technical analysis is a method of forecasting the direction of financial market prices through the evaluation of historic price and, where available, volume data.

A basic premise of the technical approach is that market action discounts everything: all that is known, or can be known, is ‘in the price’. Technical analysis is therefore not concerned with the underlying value of a security, but with the effects on the price of that security produced by the activities of market participants.

A wide range of techniques may be applied to this assessment of price action, including the study of repetitive patterns on charts, mathematical calculations to determine the speed and momentum of a move, and statistical tools to identify extreme conditions.

Behavioral Finance and Technical Analysis

Behavioural finance studies the effect of social, cognitive, and emotional factors on people’s economic decisions. It helps us better understand investors’ behaviour and shines a light on why and how markets behave the way they do. By understanding human behaviour and the psychology of the market, you can start improving your own actions as a technical analyst, and improve the quality of your output.

The TASN runs a comprehensive education programme, gives monthly lectures (also available via video links), publishes its journal three times a year and offers its members access to an extensive library. All the educational courses and examinations are accredited by IFTA, the International Federation of Technical Analysts.