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Bubbles and Technical Trading

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Bubbles and Contagion in Financial Markets, Volume 1

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Abstract

Technical analysis is a security analysis technique based on the assumption that stock prices move in trends which can be used to forecast the future direction of securities.1, 2 So, contrary to the main valuation techniques reviewed in Chapter 4, technical analysts do not attempt to measure a security’s intrinsic or fundamental value. Instead, they dig into the historical trading path of a financial asset to find patterns that might suggest future activity. This choice of method is substantiated by the technicians’ credo that prices in financial markets reflect all relevant economic factors affecting companies; hence, it is sufficient to study share prices and volume information alone.

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Authors and Affiliations

  1. Spain

    Eva R. Porras (Independent scholar)

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© 2016 Eva R. Porras

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Porras, E.R. (2016). Bubbles and Technical Trading. In: Bubbles and Contagion in Financial Markets, Volume 1. Palgrave Macmillan, London. https://doi.org/10.1057/9781137358769_5

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