Chapter 1. Introduction to Technical Analysis
In its basic form, technical analysis is the study of prices in freely traded markets with the intent of making profitable trading or investment decisions. Consider the basic assumptions presented by Robert D. Edwards and John Magee in their classic book Technical Analysis of Stock Trends:
• Stock prices are determined solely by the interaction of demand and supply.
• Stock prices tend to move in trends.
• Shifts in demand and supply cause reversals in trends.
• Shifts in demand and supply can be detected in charts.
Many technical analysts have learned their trade from the mentors with whom they have worked. Numerous individuals who are interested in studying technical analysis today, however, do ...
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