Define "technical analysis."

Technical analysis is a method used primarily in the fields of finance and trading that involves analyzing past market data, particularly price and volume, to forecast future price movements. By studying historical price charts and patterns, technical analysts look for trends and signals that can indicate potential future price movements. This approach operates on the premise that all known information is already reflected in the price, and that price movements tend to repeat themselves due to market psychology, which can be observed through various patterns and indicators.

The focus of technical analysis is not on the intrinsic value of an asset, as would be the case in fundamental analysis, but rather on the price movements themselves. This allows traders and investors to make informed decisions about buying and selling based on expected future price behaviors rather than relying on financial statements or management performance.

Alternative methods, such as assessing management performance or evaluating financial statements and ratios, belong to the realm of fundamental analysis and do not align with the principles of technical analysis. Risk assessment techniques for portfolios typically involve a different set of metrics and methodologies aimed at understanding and mitigating risk rather than predicting price movements based on past patterns.