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. For investors, what are the alternatives to owning physical gold?

    Learn some of the primary alternate ways that someone can invest in the gold market besides simply purchasing physical gold ...
  2. Why do investors with minority interest receive a minority interest discount and ...

    Discover why investors with minority interest usually receive a discount to the fair value of their ownership share, and ...
  3. What does the efficient market hypothesis assume about fair value?

    Found out what the efficient market hypothesis says about the fair value of securities, and learn why technical and fundamental ...
  4. How do I implement a forex strategy when spotting a Triple Bottom Pattern?

    Learn about the triple bottom pattern and how it is used to create effective trade strategy in the forex market, including ...
RELATED TERMS
  1. Indicator

    Indicators are statistics used to measure current conditions ...
  2. Intraday Momentum Index (IMI)

    A technical indicator that combines aspects of candlestick analysis ...
  3. Appraised Equity Capital

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

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

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

    A form of technical analysis that looks at the range between ...

You May Also Like

Related Articles
  1. Options & Futures

    Give Yourself More Options With Real ...

  2. Chart Advisor

    Commodity Traders Are Using Momentum ...

  3. Trading Strategies

    How To Make The Most of Fibonacci Grids

  4. Chart Advisor

    These 4 Swing Trades Could Place You ...

  5. Trading Strategies

    You'll Lose Profits Without This Trading ...

Trading Center