Question: Which of the following is NOT an assumption of technical analysis:
a. Security markets are efficient
b. the security under analysis is freely traded
c. Market trends and patterns tend to repeat themselves.

The answer is A. I don’t get it. Everyone said that the first assumption about technical analysis is “market discounts everything” which is similar to the efficient market hypothesis. The curriculum explained the answer like this: Technical analysis works because markets are not efficient and rational and because human beings tends to behave similarly in similar circumstances. While I agree that the market is not efficient due to the impact of behavioral finance, the underlying assumption for technical analysis is the market efficiency. Where am I wrong?

No, that is my point of view and it came from the statement that “market discounts everything” is the assumption of the technical analysis. That is why I don’t know where I am wrong at.

Nevertheless, the fact that technical analysis assumes that the market discounts everything does not mean that technical analysis assumes that markets are efficient. Trust me on this: if efficient markets were an assumption of technical analysis, the curriculum would say so, explicitly.

I mistakenly delete the previous post while trying to write a few more sentences and do not know how to restore it. Thank you for your reply as always.