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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.

Technical analysts (or technicians) identify non-random price patterns and trends in financial markets and attempt to exploit and understand those patterns. While technicians use various methods and tools, the study of price charts is primary. Technicians especially search for common patterns, such as the well-known head and shoulders reversal pattern, and also study such indicators as price, volume, and moving averages of the price. Many technical analysts also follow indicators of investor psychology (market sentiment). There are several schools of technical analysis. Adherents of different schools (for example, candlestick charting, Dow Theory, and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one school.

Technical analysts use judgment gained from experience to decide which pattern a particular instrument reflects at a given time, and what the interpretation of that pattern should be. Technical analysts may disagree among themselves over the interpretation of a given chart.

Technical Analysis