O'Reilly logo

Technical Analysis For Dummies®, 2nd Edition by Barbara Rockefeller

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 1

Opening the Technical Analysis Toolbox

In This Chapter

Defining technical analysis

Getting acquainted with the trend

Figuring out your definition of trendedness

Getting the many names for technical analysis straight

Beginning your technical analysis journey

Welcome to technical analysis, which may be a new way of looking at stocks and other securities for you. Simply put, technical analysis is a set of forecasting methods that can help you make better trading decisions.

In this chapter, I take you on a quick tour of key technical concepts and review why technical analysis works (and why sometimes it doesn’t). You may think that technical analysis is all about reading charts full of squiggles and lines, and although I give you plenty of material about squiggles and lines in this book, technical analysis is also about managing market risk.

Does that sound a bit too grand? Well, building a house isn’t chiefly about hammers and nails, although you need them. Squiggles and lines are just tools. Think of tackling technical analysis as a project to build better trading practices. Yes, you need the squiggles and lines, but your goal is to use those tools to make money.

Introducing Technical Analysis

remember.eps Technical analysis is the study of how securities prices behave and how to exploit that information to make money while avoiding losses. The technical style of trading is opportunistic. ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required