Technical Analysis Explained

Recent variations of Dow Theory are the Elliot Wave theory and the Kondratieff Wave theory. The idea of Elliot Wave theory is that security prices can be described by a set of wave patterns.

Technical analysis is the study of market action primarily through the use of charts for the purpose of forecasting future price trends. By “market action” the following three main sources of information are implied: price, market volume, and open interest, the latter referring only to options and futures. The terms “price action” and “market action” are very often used interchangeably.
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