• Stocks
  • Why Technical Analysis Matters

    by Michael Kahn

    Technical analysis is a bit of a misnomer since it is really not that technical. A better name for the use of charts to make investment decisions might be risk/reward analysis or even market psychology.

    Sure, there are some complex mathematical concepts involved with some of its more esoteric indicators. But at its core, technical analysis is simply a method of determining if a stock or the market as a whole is worth buying or selling. Once we identify this we are way ahead of the game with regard to assembling a winning portfolio.

    What Is Technical Analysis?

    Simply stated, technical analysis is the study of data generated from the market and from the actions of people in the market.

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    Michael Kahn CMT, writes the twice-weekly Getting Technical column for Barron’s Online (www.barrons.com) and the daily Quick Takes Pro newsletter (www.quicktakespro.com). Kahn will be speaking at the AAII Investor Conference this fall; go to www.aaii.com/conference for more details.


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