![]() ![]() People who use technical analysis generally believe that markets react logically to changes in fundamentals. Thus, they are likely to repeat themselves, giving technical analysts an opportunity to earn a profit by taking advantage of these patterns. These trends and patterns are created by people’s reaction to the market and changes in trade volumes and prices. Technical analysts believe it is more profitable to try to follow trends and patterns in the market. Technical analysts believe that fundamental analysts, who aim to invest based on information that investors haven’t considered when pricing shares, cannot outperform because all fundamental information is already reflected in the stock’s price. ![]() In the end, all publicly available information gets priced into a stock. Technical analysts believe that even if one could absorb and analyze all of the fundamental information related to a security, they could not accurately predict the precise movements of that security in the future. Technical analysis involves looking at things like trade volume, trends in stock prices, and other patterns that appear on stock charts. This contrasts with fundamental analysis, which tries to make investing decisions based on the underlying aspects of a business, such as its revenue, profit margins, and other factors. Technical analysis is a method of researching and selecting securities to buy and sell based on actions in financial markets. ![]()
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