This Element is an excerpt from Investing with Volume Analysis: Identify, Follow, and Profit from Trends (9780137085507) by Buff Dormeier. Available in print and digital formats.
The deep historical roots of technical analysis: how investors discovered the indispensable profit opportunities hidden in charts
Most investors assume fundamental analysis preceded technical analysis. That appears logical: It takes two opposite opinions to produce a price, and a series of prices creates the chart. But this logic presupposes that prices were exchanged based upon the item’s fundamental value alone. However, behavior may be as much a part of the price equation as value.