Technical Analysis of Financial Markets

(Technical Analysis):

Is a science and art, which aims to study the behavior of the former and predict the impact of the future - a graph that contains all the information about the circulation (prices, sizes and trading date), in an attempt to early conclusion of the direction of prices in the future, through the information provided by the diagram; This method of analysis is followed by Technicians or Chartists.

The technical analyst focuses mainly on market movement (current price, price path or direction in the past), trying to discover a pattern or a law for this change that helps predict what the price will be in the future. Trying to predict future price direction is not only about making profits; it is about developing trading policies that reduce market risk.

The philosophy of technical analysis is based on the following principles:

The market value of the stock is determined on the basis of supply and demand forces. Supply and demand control are multiple factors, some are rational and others are irrational. The market gives weight to each variable that governs supply and demand. Stock prices tend to continue in a given direction for a long time. Equity is mainly due to a change in the relationship between demand and supply.

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