Technical analysis is an art, not an exact science. Conducting a technical analysis involves looking at the price chart for the stock, mutual fund or ETF you are interested in buying and trying to determine where the price is going to go in the future.
Technical analysts look at the past price movement of a stock, mutual fund or ETF and try to identify patterns or signals that may indicate if the price is going to go up or if the price is going to go down. Naturally, what happened in the past is no guarantee of what is going to happen in the future, but it can help you make a more informed decision.
You may have heard the saying that is often attributed to Mark Twain, "History doesn't repeat itself, but it does rhyme." This sentiment sums up the belief of technical analysts perfectly. The price movement of a stock in the past may not repeat itself, but it will very often come close.
Video: Technical Analysis
Now that you've got the basics of how to use technical analysis to analyze your stocks, check out the video below and see what else you can learn about technical analysis at the whiteboard.
Taking Your Next Step
Once you're comfortable with technical analysis, it's time to move on and learn about Relative Strength.
