Rotating Image Header

Definition: Technical Analysis

Technical analysis is the study the past price behavior of a financial instrument in an attempt to determine what the future behavior might be.

Technical analysis involves the use of (mathematical) indicators and interpretation of price patterns on charts. In day trading, technical analysis is of utmost importance.

Active traders usually do not care about fundamental factors that can affect the price of what they are trading. They simply react to price changes on their charts based on their technical analysis studies. The principles of technical analysis apply to long-term as well as short-term charts. A good trading platform should have technical analysis built in.

Back to definitions.