Technical Analyst
Candlefocus EditorTechnical analysts contend that patterns exist in price action that suggest the strength of an underlying asset or market. Established formulas and formulas in technical analysis are used to compare price and volume action to indicators to create buy and sell signals.
Technical analysts may apply several different methods of analysis in their work. Commonly used analysis techniques include trend analysis, momentum analysis, mean reversion analysis, moving average analysis, and relative strength analysis. The analysis techniques vary in time frames and complexity. Simple technical analysis techniques may use only one or two indicators in a single time frame where a more complex set of analysis may span multiple time frames and employ a variety of technical indicators.
Technical analysts may also utilize a wide array of market trading strategies such as trending market strategies, range trading, trend reversal strategies, and volatility strategies. Technical analysts may hedge using derivatives or futures contracts to close out their positions. Technical traders will often employ risk management tools such as stop-loss orders to limit their losses, as well as diversifying their positions across multiple markets to limit their exposure to a single market.
The goal of a technical analyst is to study the available data, interpret the findings and make recommendations accordingly. When executing trades, they will often use technical analysis tools to identify entry and exit points, develop risk management strategies, and analyze various scenarios. Lastly, CMT professionals are the most knowledgeable technical analysts who have the highest level of training and experience.