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Using Technical Analysis in Securities Trading: Evidence from Bulgaria. Technical Analysis. Ivaylo Penev, CFA Portfolio Manager, ELANA Fund Management. What is technical analysis?.
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Using Technical Analysis in Securities Trading: Evidence from Bulgaria Technical Analysis Ivaylo Penev, CFA Portfolio Manager, ELANA Fund Management
What is technical analysis? Method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Market action is defined by: • Price action • Volume • Open Interest
What is technical analysis? Price action – price dynamics during a period Volume – the amount of shares/contracts traded for a period Open Interest – the number of options/futures contracts that are not closed or delivered on a particular day
Premises of technical analysis • Price movements represent all the information available • Prices move in trends • History repeats itself
Technical analysis - charts • Line charts • Bar charts • Candlestick charts • Dot charts • Point and figure charts
Technical analysis – reversal patterns Engulfing
Technical analysis – reversal patterns Evening and morning stars