Three Premises of Technical Analysis

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There are three premises on which the technical approach is based: Market action discounts everything. Prices move in trends. History repeats itself. Market Action Discounts Everything: The statement “market action discounts everything” forms what is probably the cornerstone of technical analysis. Unless the full significance of this first premise is…

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History of Technical Analysis

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Early 1600’s – Lottery prices plotted in England Late 1700s – Rice market plotted in Japan 1885 – 1900 – Charles Henry Dow in Wall Street September 1929 – “The Changing Of The Tides” – the title of a key article written by William Hamilton, second editor-in-chief of the Wall…

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Technical Analysis

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Definition 1) Technical Analysis is the study of data generated by the action of markets and by the behavior and psychology of market participants and observers. Such study is usually applied to estimating the probabilities for the future course of prices for a market, investment or speculation by interpreting the…

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Moving Averages

1. Exponential Moving Average EMA returns the Exponential Moving Average of the specified period. EMA is similar to Simple Moving Average (SMA), in that it averages the data over a period of time. However, whereas SMA just calculates a straight average of the data, EMA applies more weight to the…

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