Which term describes the act of executing transactions based on anticipated price movements?

Which term describes the act of executing transactions based on anticipated price movements?

• A. Market analysis
• B. Trade execution
• C. Technical analysis
• D. Strategic positioning

Answer: (C)

The act of executing transactions based on anticipated price movements is best described by the term that relates closely to the evaluation of market trends, patterns, and price data. This approach involves analyzing previous price movements to predict future behavior, leveraging charts, indicators, and various quantitative methods to inform trading decisions.

Technical analysis stands out as the discipline that focuses on this predictive aspect. It relies heavily on historical data and price-chart patterns to make short-term trading decisions based on expected market movements.

In contrast, market analysis encompasses various methods, including both technical and fundamental analysis, to assess overall market conditions rather than focusing solely on specific price predictions. Trade execution refers to the actual process of carrying out buy or sell orders on the market. Strategic positioning generally involves setting up trades based on broader market strategies or objectives, but it may not specifically focus on anticipated price movements in the same immediate context as technical analysis does.