Traditional technical analysis consists of the techniques first developed in the field of technical analysis. Traditional technical analysis were designed based on identified relationships in historical stock quotes between trends, formations, resistance levels, support levels and the subsequent share price performance.
Traditional technical analysis is about drawing trend lines in stock price charts and identify formations or patterns in equity prices. Traditional technical analysis means that one should take positions in line with the current trend, the resistance level and
the support level are represented by a horizontal trend line along the share price highs respective share price bottoms. Resistance levels and support levels are hard to break through and certain formations can create a shift in the trend or a period of consolidation with a sideway trend in the share price.
Traditional technical analysis assumes that historical stock price changes affect the share price performance in the future and it also assumes that the stock market not is completely efficient.
