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There are a lot of chart patterns that you can learn out there. There are so many of them. Some which I think is well known are:

• Hanging man
• Shotting star
• Inverted hammer
• Bullish and Bearish Engulfing
• Bearish and Bearish Harami
• Pearsing Line
• Dark cloud
• Abondoned Baby
• Three White Soldiers and Three Black Crows

There are so much of them. How would you be able to master all of them? Trading should be simple right? They should be, so I created my own rule, which is quite conservative. Here are they:

Enter Buy position:

• Break resistance.
• Bullish Engulfing, when the white candlestick body is much bigger then the previous black candlestick body.

Close the Buy position:

• Price is near the next resistance. I better quit near the next resistance because you wouldn’t know what will happened. It’s a 50:50 change, so I better close my position.
• Candlestick closing price is lower than previous candlestick closing price.
• Long upper tail, because this is signs that traders are pushing price lower.

Enter Sell position:

• Break support.
• Bearing Engulfing, when the black candlestick body is much bigger then the previous white candlestick body.

Close the Buy position:

• Price is near the next support. I better quit near the next support because you wouldn’t know what will happened. It’s a 50:50 change, so I better close my position.
• Candlestick closing price is higher than previous candlestick closing price.
• Long lower tail, because this is signs that traders are pushing price higher.

Technical analysis is done by looking at previous price, and volume data. Technical analyst look at past chart of price and different indicator to make prediction about the future prices. The human emotion is an important aspect here. Their willingness to buy stock at a certain price will determine future price. This analysis assumes that price moves at trend, and history repeats itself. It is believed that this analysis is more art than science. Because of that, there has been plenty of critics to this analysis, due to lack of evidence of it’s performance. But it is still a popular method in the world, through its easiness. Critics also came from well known fundamental analyst, Warren Buffet. It is also inconsistant with market hypothesis, like Efficient Market Hypothesis (EMH) and Random Walk Hypothesis.
How?
The most popular method used in this analysis is support and resistance, bollinger band, moving average, momentum, stochastic oscillator and indicator such as MACD. Moving Average is the average closing price. They also look at pattern at chart like the popular head and shoulder. There at a lot of software out there which can help you with this kind of analysis.
How’s the performance?
Sometimes it works sometimes it don’t. But due to it’s activeness in trading, it has high cost transaction. So you must deduct your return with this transaction cost.
For who?
Technical is for short term player. They are usually very active in their trades. Whatever the price movement, they can go in by going long or short. This analysis is easy to do, especially by looking at charts, making is a very popular analysis.