What Is Technical Analysis And Why Use It?

Technical analysis involves understanding price movements of a stock using technical charts. These charts denote the current trend and the strength (by means of traded volume). Technical trader can use identify the current market trend and place their trades accordingly.
Fundamental analysis requires detailed study of qualitative aspects of the company which may not be feasible for a retail trader due to lack of information availability. Technical analysis helps identify how big players are trading the stock.
Stock price primarily moves because of demand and supply. The market always discounts all the news and any stock is correctly priced for publicly available information.
Technical analyst can use line chart, bar chart or candlestick charts. Line charts are useful to understand long-term movement of a stock, particularly to analyse it’s behavior on Dow theory. However it lacks intraday information such as open, high, low and close which is provided by bar charts. Candlestick charts are same as bar charts but visually more appealing and hence most popular with technical analysts.