As with all forms of investing, no analysis can 100% correctly identify future price shifts but by using a combination of technical indicators a shrewd investor can improve his or her chances of ending a trade in profit. 

The Benefits 

Technical analysis differs from fundamental analysis in some key respects and as such offers some advantages over the more traditional approach: 

• Technical analysis is not concerned with why the price of a security is moving but rather where it is moving and so signals to buy, hold and sell are often far more absolute. This means that if used correctly, technical analysis can better achieve profit maximisation on a trade-by-trade basis. 
• Furthermore technical analysis, unlike fundamental analysis, allows one to enter trades on a much shorter time scale. It facilitates the use of day trading, swing trading and many other shorter term investment techniques.
• Technical analysis uses actual market data on which to base decisions whereas fundamental analysis use indirectly linked data and news where the impact on market prices is unclear.
• The market data is clear in terms of accuracy, while fundamental analysis often requires forecasted figures which add an unknown and changeable element into the equation. 

 
Technical Analysis in Use 

When an investor first tries to learn the basics of technical analysis he or she may find it hard to comprehend the large number of indicators but will soon settle on a few that they find easiest to use and most effective. 

The best way to utilise such technical indicators is to combine them in order to create a chart that is both simple to view and effective in picking entry and exit points. The benefit of doing this is to avoid overly relying on one signal but to make decisions based on multiple signals which should help confirm if a prevailing price trend truly exists. 

Where Next?

Since the art of technical analysis is in the studying of numbers and trends there have been many attempts to automate the monitoring of securities and the entering of trades. This allows a trader to find a greater number of profitable trades and eliminates human error and judgement. 

To opt for such a program will of course mean relying on software to realistically gamble with your funds. This trader suggests that if you choose to utilise such software you do so only to identify trades and not to enter into them. This gives you a chance to review the recommendations and decide whether you want to make the deal.