What is Technical Analysis?
Forecasting price using historical price and volume data.
Formal Definition
Technical analysis uses charts and indicators such as moving averages, RSI, MACD, and support and resistance levels to identify patterns and anticipate price moves. It assumes price reflects all available information and that recurring patterns in crowd behavior create tradable signals.
In Simple Terms
It means reading stock charts instead of company financials, looking for patterns in past prices and trading volume to guess where the price goes next. It focuses on the mood of buyers and sellers, not the business itself.
Example
A stock breaking above its 200-day moving average on rising volume is a classic technical buy signal.