What are the three basic assumptions of technical analysis

State Street tells you about the three basic assumptions of technical analysis: that market behavior is all-encompassing, that prices evolve in a trending manner, and that history repeats itself. 1. "Market behavior includes everything" forms the basis of technical analysis. There are a lot of factors that affect market price changes. Take the stock market as an example: the macroeconomic situation, the government's financial policy, the market size, the capital situation, the operation of listed companies, the psychological factors of the shareholders and the level of knowledge. These will have an impact on the stock price. The above fundamental factors are sometimes consistent, but more often contradictory, the actual change in stock prices is the result of the combined effect of all fundamental factors. So technical analysis is not the study of various fundamental factors, but directly study the result of their synthesis - price. By studying price charts and supporting technical indicators, the market reveals its most likely trend. 2. The concept of "trend" is at the heart of technical analysis. Market movements can be categorized as either trending or non-trending. The whole point of studying the price chart is the initial stage of a trend development, so as to timely and accurately reveal it, to achieve the purpose of trading in line with the trend. Once the market forms an upward (or downward) trend, the next step is often to continue to evolve in the direction of the existing trend, and the possibility of turning around and reversing is much smaller. So in practice, to firmly follow an established trend until the opposite signs. 3. Technical analysis is actually a statistical analysis of past market price changes. Price patterns are represented by a number of specific price charts. These charts have expressed optimism or pessimism about the market in the past, and will be equally valid in the future, because human psychology is never "easy to change" and history tends to repeat itself.