From the course: Economic Tips for Everyone

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Technical trading

Technical trading

From the course: Economic Tips for Everyone

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Technical trading

- Some people make their decisions to buy or sell stock, bonds, gold, or other financial securities based on fundamentals. These include looking at reports, doing analysis, trying to balance supply and demand, and looking at future earnings. But there's another way people trade called technical trading, and it involves looking at charts of past trading dynamics to make assessments about the future. This includes looking at past relationships of price, volume, relative strength, and changes in derivatives. Technical trading has become significantly more popular in the last 15 years. In fact, there's even a professional designation dedicated to it called the Chartered Market Technician, or CMT. The argument against technical trading is that it's a bit like driving forward by looking in your rear-view mirror. But many trading firms in the last 15 years have shifted from fundamental analysis to algorithmic trading, looking at…

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