Which of the following best describes technical analysis?

Technical analysis is best described as a method that uses price movement and volume statistics. This approach focuses on analyzing historical price data and trading volume to forecast future price movements. Technical analysts believe that all information, including market sentiment and economic indicators, is already reflected in the stock’s price. By studying price charts, patterns, and various technical indicators, these analysts attempt to identify trends and make informed trading decisions.

This method sets itself apart from other strategies, such as those that rely on fundamental analysis (like assessing a company's management quality or economic indicators) or market condition examinations, by emphasizing the numerical data derived from trading behaviors rather than qualitative assessments or broader economic factors. This focus allows traders to make predictions based on the behaviors of the market itself.