Strengths and Limitations of Technical Analysis
The first task of technical analysis is to identify trends in market price movements. The second task is to identify turning points. Technical Analysis focuses on trend detection because whatever has been happening in the past tends to continue happening. As Tony Sagami puts it, "…trends in motion tend to keep moving until they’ve run their course." In the markets, trends continue until there is a shift in the expectations of the market participants. That is when identifying turning points becomes important.