Technical analysis

It has been suggested that the information in this article's "Criticism" or "Controversy" section(s) be merged into other sections to achieve a more neutral presentation. (see talk)

Technical analysis is the study of past financial market data, primarily through the use of charts, to forecast price trends and make investment decisions. In its purest form, technical analysis considers only the actual price behavior of the market or instrument, based on the premise that price reflects all relevant factors before an investor becomes aware of them through other channels.

Technical analysis is widely used among traders and financial professionals, and some studies say its use is more widespread than is "fundamental" analysis in the foreign exchange market. Academics such as Eugene Fama say the evidence for technical analysis is sparse and is refuted by the efficient market hypothesis, yet some Federal Reserve and academic studies include evidence that supports technical analysis. MIT finance professor Andrew Lo argues that "several academic studies suggest that…technical analysis may well be an effective means for extracting useful information from market prices." But as Burton Malkiel argues, "Technical analysis is anathema to the academic world."