Investing: Technical Analysis
October 18, 2007 by Miranda Marquit
Filed under Finance
Yesterday, we took a look at fundamental analysis, and how it can fit into an investing plan. Today we will look at the other main style of analysis: technical analysis.
Technical analysis
Technical analysis focuses on the movements made on the charts. Those who favor this style of analysis when making investment decisions look at the movements seen on charts, and then try and find trends that help them make predictions.
Technical analysis is helpful for active traders, who watch chart movements closely and enter and exit positions when they see certain trends, or when trend lines hit a certain point on the chart.
This type of analysis can mean riskier decisions, as they are often based on what’s “hot” at the moment. Technical analysis is particularly popular among currency traders. However, a combination of technical and fundamental analysis can be a good way to choose investments for a mid-range length of time.
