Technical traders

Users of technical analysis are most often called technicians or market technicians. Some prefer the term technical market analyst or simply market analyst. An older term, chartist, is sometimes used, Traders who rely solely on technical analysis are usually called Technical Traders. Technical traders employ models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price correlations, cycles or, classically, through recognition of chart patterns.

Technical traders stand in contrast to the fundamental traders approach to security and stock analysis. Technical traders "ignore" the actual nature of the company, market, currency or commodity and is based solely on "the charts," that is to say price and volume information, whereas fundamental analysis does look at the actual facts of the company, market, currency or commodity.

Technical analysis is widely used among technical traders and financial professionals, and is very often used by active technical day traders, market makers, and pit traders. Technical traders believe that even if technical analysis cannot predict the future, it helps to identify trading opportunities.

In the foreign exchange markets, technical traders may be more widespread than fundamental analysis. While some isolated studies have indicated that technical traders rules gain more consistent returns in the period prior to 1987, most academic work has focused on the nature of the anomalous position of the foreign exchange market. It is speculated that this anomaly is due to central bank intervention. Recent research suggests that technical traders who combine various trading signals into a Combined Signal Approach may be able to increase profitability and reduce dependence on any single rule.