Technical analysis by currencynerd about Symbol PAXG on 8/21/2025

The History and Origin of Technical Analysis Every chart we study today. Every candlestick, moving average, or RSI indicator is built on centuries of market wisdom. While many believe technical analysis began with Charles Dow in the 1800s, its origins reach much further back, to Amsterdam’s bustling spice markets in the 1600s and Japan’s rice exchanges in the 1700s. Let’s take a journey through time and see how technical analysis evolved into the powerful tool traders and investors use today. 17th Century: The First Signs of Charting 1. Dutch East India Company Traders (1602) The Dutch East India Company, established in Amsterdam in 1602, became the first publicly traded company. Its shares were bought and sold on the world’s first stock exchange, the Amsterdam Stock Exchange. Early traders began tracking price fluctuations in simple graphical forms — the very first steps toward technical analysis. 2. Joseph de la Vega (1650–1692) A Spanish diamond merchant and philosopher, Joseph de la Vega, authored Confusión de Confusiones (1688), the earliest known book on stock markets. He described investor behavior, speculative patterns, and even outlined concepts resembling modern puts, calls, and pools. His insights captured both the psychology of markets and the primitive beginnings of technical analysis. 18th Century: Japan’s Candlestick Revolution Homma Munehisa (1724–1803) In Osaka’s Dōjima Rice Exchange, Japanese rice merchant Homma Munehisa created what remains one of the most widely used charting methods in history: the Japanese Candlestick (then called Sakata Charts). His book The Fountain of Gold – The Three Monkey Record of Money detailed not only price charts but also market psychology, emotions, and crowd behavior. Today, candlestick patterns remain a cornerstone of technical analysis worldwide. Late 19th & Early 20th Century: The Modern Foundations Charles Dow (1851–1902) Often called the father of modern technical analysis, Charles Dow co-founded Dow Jones & Company and The Wall Street Journal in 1889. His market observations led to: The Dow Jones Industrial Average and Transportation Average The Dow Theory, which identified three types of trends: primary, secondary, and minor. Dow believed markets reflect the overall health of the economy, and his work inspired generations of analysts, including William Hamilton, Robert Rhea, George Schaefer, and Richard Russell. Ralph Nelson Elliott (1871–1948) Building on Dow’s ideas, Elliott studied 75 years of stock market data and developed the Elliott Wave Theory, arguing that markets move in recurring wave patterns driven by crowd psychology. In March 1935, he famously predicted a market bottom and the Dow Jones indeed hit its lowest point the following day, cementing his theory’s credibility. 20th Century: The Rise of Indicators The computer era supercharged technical analysis. Mathematically driven technical indicators were developed to analyze price, volume, and momentum on a scale that manual charting could never achieve. Example: RSI (Relative Strength Index) Developed by J. Welles Wilder Jr. in 1978, RSI measures the speed and magnitude of price changes on a scale of 0–100. Above 70 = Overbought (potential sell signal) Below 30 = Oversold (potential buy signal) Other popular indicators soon followed, such as Moving Averages, MACD, and Bollinger Bands, giving traders an expanding toolbox to forecast market movements. 21st Century: From Charts to Algorithms and AI Today, technical analysis has evolved far beyond hand-drawn charts: Algorithmic Trading: Automated systems use indicators and strategies to execute trades at lightning speed. AI Trading Bots: Artificial intelligence combines both technical and fundamental analysis, processing massive datasets to generate signals and even execute trades. Platforms like TradingView: Empower traders worldwide to build custom indicators, test strategies and share insights, democratizing access to advanced market tools. nerdy thoughts From Amsterdam’s first stock traders to Osaka’s candlestick pioneers, from Charles Dow’s theories to AI-powered trading bots, technical analysis has always been about one thing: decoding price to understand human behavior in markets. It’s a discipline born from centuries of observation, innovation, and adaptation, one that continues to evolve every day. “Life is a moving, breathing thing. We have to be willing to constantly evolve. Perfection is constant transformation.” put together by: Pako Phutietsile ( currencynerd ) courtesy of : TradingView this is inspired by a publication i once posted this is the revamped edition...