Technical Analysis
In addition to all the different fundamental analysis approaches to security selection discussed above, the exam may ask a few questions about using technical analysis to identify the best securities for investment. Technical analysis uses historical trading information about a security (stock market data such as price and trading volumes), expressed in the form of a chart, to identify patterns and trends. These charts are used to attempt to predict the direction and possible future prices of a security.
A few key terms to know from technical analysis include:
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