In my experience,only a minority of technicians can determine future prices consistantly and accurately.However,even if you are unable to forecast prices accurately.technical analysis can be used to consistantly reduce your risks and improve your profits.
The best analogy I can find on how technical can improve your investing is a roulette wheel.I use this analogy with reservation as gamblers have very little control when comparing to investors(although considering the actions of many investors,gambling may be very appropriate analogy).
A casino makes money on roulette wheel,not by knowing what number will come up next,but by slightly improving their odds with the addition of a 0 and 00.
Similarly,when an investor purchases a security,he doesn't know that its price will rise.But if he buys a stock when it is in a rising trend,after a minor sell-off,and when intrest rates are falling,he will have improved his odds of making a profit.That's not gambling-- it's intelligaence.Yet many investors buy securities without attempting to control the odds.
Contrary to popular belief,you do not need to know what a security's price's will be in the future to make money.Your goal should simply be to improve the odds of making profitable trades. Even if your analysis is as simple as determining the long,intermediate, and short term trends of the security,you will have gained an edge that you would not have without technical analysis.
Consider any of the chart,where the trend is obviously down and there is no sign of a reversal, While the company may have great earnings prospects and fundamentals,it just doesn't make any sense to buy the security untill there is some technical evidence in the price that this trend is changing.
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