Does the past show the future?

The idea that „the past can show the future” is a central tenet of technical analysis. Technical analysts believe that by analyzing past price and volume data, they can gain insights into a security's future price movements. They use charts and other tools to identify patterns and trends in the market, and believe that recognizing these patterns can provide valuable information about a security's future price direction.

However, it is important to note that while the past can provide some indication of future price movements, it is not a guarantee of future performance. There are many factors that can influence a security's price, and even if a particular pattern has occurred in the past, there is no guarantee that it will repeat itself in the future. Technical analysis should therefore be used in conjunction with other forms of analysis, such as fundamental analysis, to make informed investment decisions.