Technical analysis is an incredibly popular method used by traders to make decisions on entry and exit points with positions. Many people believe that by studying historical prices it is possible to predict future price movements and profit when markets follow predicted outcomes.
One of the key weapons in the ‘technicians’ armoury is the chart. They will study charts that graphically show past price movements to uncover price patterns and trends and will base their trades upon them. They will incorporate a variety of techniques including candlestick charting, Elliot Wave Theory and a whole host of others to make decisions and many will combine a number of techniques simultaneously.
Technical analysis in an incredibly in depth subject and we will endeavour to cover off as much as we can in future guides.