Is technical analysis used only to analyze stocks?

By Casey Murphy AAA
A:

The simple answer to this question is definitely not. This form of analysis can be applied in more situations than you may think. Any time a person uses past data to predict the outcome of a future event, he or she is using technical analysis.

For example, a meteorologist can use technical analysis by taking all the temperatures for Jan 10 over the last 25 years and using the average to predict what the temperature will be like this coming Jan 10. This probably isn't the best way to forecast the temperature, but it can help to confirm predictions made by other models. Technical indicators, trends and moving averages can be used to analyze the direction of bonds, mutual funds, indexes, interest rates, exchange rates, jobless claims, housing starts and the weather. They can even be used to forecast the prices of futures such as oil, propane, gold, corn, soybeans, etc. The use of technical analysis is not limited to what we have mentioned here, but this should give you a good idea of the many things to which it can be applied.

(For more on this topic, see our Technical Analysis tutorial.)

RELATED FAQS

  1. What is the difference between Exponential Moving Average (EMA) and Weighted Moving ...

    Read about the difference between exponential moving averages and weighted moving averages, two smoothing indicators that ...
  2. What are the main disadvantages of using the Exponential Moving Average (EMA)?

    Discover the primary differences between exponential and simple moving average indicators, and what disadvantages EMAs can ...
  3. What does a double bottom tell a trader about the overall trend?

    Learn how a double bottom pattern forms on a price chart and why many traders consider double bottoms to be a sign of reversal ...
  4. What are the main differences between a double top and a double bottom?

    Identify double tops and double bottoms, and learn what each could mean for the security's current price trend. Discover ...
RELATED TERMS
  1. Appraised Equity Capital

    The excess of the market value of an asset over its book value. ...
  2. Asset Valuation Review (AVR)

    A process that establishes an estimate of the value of a failed ...
  3. Derived Investment Value (DIV)

    A valuation methodology used to calculate the present value of ...
  4. Mass Index

    A form of technical analysis that looks at the range between ...
  5. Money Flow Index - MFI

    A momentum indicator that uses a stock’s price and volume to ...
  6. On-Balance Volume (OBV)

    A momentum indicator that uses volume flow to predict changes ...

You May Also Like

Related Articles
  1. With stocks surging, financial advisers and their wealthy clients are asking why they should continue to bother with poorly performing alternatives.
    Professionals

    Are Advisors Off Alternatives?

  2. Options & Futures

    Futures Quotes Explained The "Easy" ...

  3. Trading Strategies

    Not All Online Trading Brokers Are Created ...

  4. Trading Strategies

    Novice Trading Strategies

  5. Options & Futures

    Stock Futures vs Stock Options

Trading Center