Investing with Technical Analysis

For those seeking to forecast the future direction of prices, technical analysis can be a powerful tool. Technical analysis is predicated by the suggestion that prior market behavior exhibits patters than can be capitalized in current markets. In theory, this kind of analysis considers only the price and volume movements of a market to make decisions. In practice it is often coupled with other kinds of analysis to provide an additional dimension of analysis.

Even while simply using price and volume, this data can be processed in many ways to identify trading patterns. There are many popular indicators and chart patterns which technical analysts use to make decisions. Oftentimes this information can be conflicting and it is the skill of the analyst to decide which tools should be applied when.