Thursday, April 7, 2005
Technical analysis 1
What is technical analysis? The term "technical analysis" is a complicated-sounding name for a very basic approach to investing. Technical analysis is the study of prices, with charts being the primary tool, to make better investments. The price of a security represents a consensus. It is the price at which one person agrees to buy and another agrees to sell. If an investor expects the securities price to rise, he will buy it; if the investor expects the price to fall, he will sell it. The movement of the price is based on human expectations. If a stock has more buyers than sellers, the price will tick up; if the bidders are more eager for the stock than the sellers, the price will go up too.
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