Technical analysis is a method of forecasting price act by looking at only market-generated data. An investor who uses technical analysis (usually called a technician or chartist) is basically concerned with two things;

1) what is the current price?

2) What is the history of price movement?

Many would also keep a close watch on technical indicators, which supply feedback on both the price and market (e.g. moving average, volume, momentum, volatility, open interest, etc). Basically, technical analysis utilizes the information captured by the price to interpret what the market is saying with the purpose of forming a view on the future.
Almost every investor uses some form of technical analysis. Even the most reverent follower of market fundamentals is tend to glance at price charts before executing a trade. At their most basic level, these charts help investors determine ideal entry and exit points for a trade. They also give a visual representation of the historical price action of whatever is being studied. As such, traders could look at a chart and know if they are buying at a fair price (based on the price history of a particular market), selling at a patterned top, or perhaps throwing their capital into a choppy, sideways market. These are just a few market conditions that charts identify for a trader. Depending on their level of knowledge, charts could also help much more advanced translation of the markets.
On the surface, it might appear that technicians reject the fundamentals of the market while concentrating only on charts. However, a technical trader will tell you that all of the fundamentals are already represented in the price. They are not so much concerned that a natural disaster or an awful inflation number caused an earlier spike in prices as much as how that price action fits into a pattern or trend. And much more to the point, how that pattern could be used to forecast future prices.

The “WHAT” Is More Important Than the “WHY”

Ultimately, price is the end result of the battle between the forces of supply and demand. The objective of analysis is to forecast the direction of the future price. By focusing on price and only price, technical analysis represents a direct approach. Fundamentalists are concerned with why the price is what it is. For technicians, the why ration of the equation is too broad and many times the fundamental reasons given are highly suspect. Technicians believe it is best to focus on what and never mind why. Why did the price go up? It is simple, more buyers (demand) than sellers (supply). After all, the value of any asset is only what someone is willing to pay for it. Who needs to know why?
In our trading system, the way we analyze the market is by focusing our study on the past and current price action of a particular stock we want to trade. We do this by looking at candlestick “price pattern formations” and “price ranges” at different time-frames for that particular stock.

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