What Data Is Needed To Perform Technical Analysis?
Almost all technical analysis is designed to be done with input price data and time. One important data entry for some technical analysis is trading volume. Technical analysis basically provides a means to assess supply and demand in the trading market to determine future price movements. While fundamental analysis is intended to determine the value of actual investment, or intrinsic, technical analysis using chart patterns and other technical indicators to indicate the market direction and the strength of price movements.
Technical analysts do not consider fundamental information to be valuable at all. Instead, they make the assumption that all relevant fundamental information, such as certain corporate information, economic data and even market psychology, have been taken into account in previous price movements and current market prices.
The theory behind technical analysis is that price movements plotted on charts over time indicate the true market value of stocks or other investments, and by analyzing price movements over time using various technical indicators such as moving averages, oscillators or candlestick patterns, traders can detect future price movements of the greatest profit opportunities.
Technical analysts believe that market prices are driven first and foremost by supply and demand. Therefore, one of the most important things to be achieved by technical analysis is to identify the level of support or resistance, or the price level at which the market historically sees strong demand or an abundant supply.
One important technical indicator that is monitored by many traders and analysts is the volume of trade. Historically, more significant price movements are accompanied by high trading volumes, while less significant price movements or small price changes usually occur in lower trading volumes.
Well, if you are a trader who always performs technical analysis, it helps you to consider also the fundamental aspect though not necessarily a priority in the analysis.