Technical analysis includes researching stock price charts and various indicators derived from (basic) prices in order to predict the development of the market.
This graphic extrapolation method is applicable to all types of markets: indices, stocks, interest rates, commodities…, so it is not limited to the stock market (stock market); once the supply and demand meeting determines the price, the same tools and methods can be applied to any Type of underlying asset.
The main tool of the technical analyst is graphics, which can visualize and analyze the underlying assets.
The accepted purpose and reason for existence of technical analysis is to predict trends and signs of trend reversal. This is a question of determining market conditions (significant numbers and/or signals given by mathematical tools) that statistically produce the same results.
Technical analysis does not pretend to be an accurate science. It is closer to human science, because its research object is directly focused on the understanding of market psychology.
Technical analysis was first used by the Japanese around the 17th century for the rice market. They introduced a specific way to draw the price: the Japanese candlesticks. It helped them aggregate the price for a given period.
Technical charting theories are built on a few main assumptions. It partly explains why it is also a very controversial topic.