Technical analysis, the holy grail to some but denounced as worthless by others. Does technical analysis really work and do professional traders use them? As a former proprietary trader and now a futures trader in a private family fund, I would like to share my views on the topic.
What Is Technical Analysis?
Technical analysis is the study of past market data on a chart. Technical analysis can be classified into 4 main categories below:
General chart reading Technical indicators Candlesticks Chart patternsGeneral Chart Reading Gold on an uptrend
This is one of the most basic ways of using technical analysis to interpret information on a chart. General chart reading gives the trader an overall view of the current market. It tells us whether the market is trending or trading sideways. It also enables the trader to determine where the support and resistance level of the market is at.