Module 2   Technical Analysis (Video Series)Chapter 5

Key assumption of technical analysis

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5.1 – Assumptions in Technical Analysis

Unlike fundamental analysts, technical analysts don’t care whether a stock is undervalued or overvalued. The only thing that matters is the stocks past trading data (price and volume) and what information this data can provide about the future movement in the security.

Technical Analysis is based on a few key assumptions. One needs to be aware of these assumptions to ensure the best results. Watch this video to learn more.

 

In the following video, we will understand the candlestick patterns.

We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.


Key takeaways from this chapter

TA is based on a few core assumptions.

  1. Markets discount everything.
  2. The how is more important than why.
  3. Price moves in trends.
  4. History tends to repeat itself.
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