If you're looking in from the outside, it's easy to see how you might come to the conclusion that it is a place of constant chaos, where you can never depend on the price movements of one day to be repeated in the next. Although it's true that the stock market is constantly in a state of flux, from high prices down to low prices and back around again, it's important that new investors learn that this cyclical movement is essential to finding opportunities to actually make a profit in the market. If you're interested in picking stocks that have the potential to be very profitable for you in the future, it's essential that you learn technical analysis.

The mere mention of technical charting and monitoring strategies can make some new investors shrink back from the market in fear of the unknown, but it's important to point out that even with all its fancy software tracking programs and terminology, it's actually quite possible for any type of trader to learn technical analysis. Instead of focusing on all the qualitative factors that fundamental analysts spend so much time and effort researching, technical analysis concerns itself only with the numbers.

If you're going to learn technical analysis, a good place to start is with the basic assumptions that govern its practice. Technical analysts hold three particular facts to be true when it comes to the market, and they are: market prices already reflect relevant information like natural disasters, political pressure, or public psychology about a company; prices have and will always move in trends; and third, it is the firm belief of the technical analyst that history repeats itself. Armed with these three simply beliefs, technical analysts are able to use the information provided in the charting of price movements to make educated predictions about what a stock is likely to do in the future.

On your quest to learn technical analysis, it's important to point out that it's not the only way that you can go about evaluating the market for potential growth in your securities. Many traders also maintain that fundamental analysis is a perfectly good method for discovering which companies have the most potential for creating a profit for their shareholders. The only problem with the fundamental method is that it requires you to spend a lot of your time researching the history and market demand for the company that you're interested in.