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Why Technical Analysis is important for a Trader?

Technical analysis is not an exact science, it is more of an art and takes a considerable amount of experience. Not all studies work the same for every instrument traded. One study may give excellent buy and sell signals while another may not work for you at all. It's up to each individual trader to find those that will fit his or her specific needs.

The professional investor that looks at the same stocks and only buys when there is a SALE going on doesn't have to care about analysts or market hype. So when everyone has given up and sold, he is buying. After a month or two the stock generally rebounds and Wall Street loves the stock again, then analysts hop on board and upgrade the stock to a strong buy, raising estimates and new fools come in and buy the stock at the all time high. The professional investor then dumps his stock and looks to find the next stock that is still at a bargain price.

Every technical analyst knows the importance of charts and indicators. But if these were all it took to make profitable trading decisions, everyone would be a winner. With most indicators it is possible to detect buy and sell levels, but the sport is to detect them before everybody else.

"The trend is your friend" is the motto of technical analysis