Did you know that the stock market has been in business for over two hundred years? During that time, thousands of companies have gone public, made enormous amounts of money, closed, and opened again. All this has resulted in massive price movements that have manifested themselves as tiny increases and decreases in value that take place one day at a time. Many new investors find the stock market fluctuations unnerving, but experienced traders know that without them, there would be no opportunity for profit. Stock technical analysis is one of the most important ways that traders track and interpret these prices changes, and use them as a way to make better decisions about the future.

If you're unfamiliar with the practice of stock technical analysis, you should now that it is a method for monitoring stock price movements over time, in order to identify patterns that hold clues about which way the price of the stock is likely to move in the future. Technical analysis is quite a bit different from fundamental analysis, the other popular method for investigating the value of certain stocks. Instead of concerning themselves with economic influences and public perception of publicly traded companies, technical analysts believe that these outside factors are all accounted for in the market naturally.

In order to properly execute your stock technical analysis strategy, it's important to realize that you're going to have to spend some time getting to know and love the stock charts. These are typically electronic charting and tracking systems that can be programmed to follow the stocks that you're interested in, or an entire stock index, like the Dow Jones Industrial Average. As you start to observe each day's data, you'll start to see that stock prices are constantly moving up and down, and that over time, these fluctuations form trends and patterns that can be identified and analyzed.

Because stock technical analysis is based on the assumptions that the stock market is inclined to move in trends, and that a stock's history is destined to repeat itself, these patterns become one of the most important tools in a technical analyst's toolbox. With the help of established patterns, analysts can make educated predictions about which direction a stock is likely to move in the future, simply because they have seem the pattern play out many times in the past. This can prevent traders from making costly mistakes or holding on to a stock for too long.