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5. Technical Analysis > A Short History of Technical Analysis

A Short History of Technical Analysis

In its formative stages, technical analysis was particularly well suited for money managers and investors who did not want to rely on brokers, or become victims of trading pools and back room price manipulations. In those early days, the requisite company financial measures for a fundamental analysis approach were hard to obtain: the financial trade press was in its infancy; daily newspaper coverage was mainly price and, in some cases, volume; the SEC didn’t exist; company financial statements weren’t readily available; no minute-by-minute Wall Street coverage on television; no calculators; no computers; and definitely no Internet with its flood of free or cheap financial information.

Technical analysis was particularly suitable for these early market environments, because the only information available was exactly what technical analysis wanted. After regulators tamed Wall Street and financial statements were regularly required of publicly traded companies by the then-fledgling SEC, financial information became easier to acquire and technical analysis stepped back into the wings to await calculators, computers, and the Internet. However, technical analysis is the weapon of choice for investors who trade market and sector indices, commodities, and derivatives, where fundamental measurements are unavailable or inapplicable.


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