What is Technical Investing?

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Technical investors have been around for a long time. They used to be known as chartists, very simply, people who would be drawing charts or lines on graphs to try and establish patterns.

But with the advent of very powerful computers, this can now be done in a far more technical and robust way, where people look at the pattern formations around stocks, indices, commodities, to try and find support levels or patterns that might indicate breakouts towards the up or the downside.

Investors rely very heavily on this technique when they're trying to establish entry and exit positions for companies. In our experience, we found that these work better with more highly traded and a longer backlog or back data of instruments, because it gives you a better indication of previous patterns and previous formations.

Simply put, where somebody has bought before or sold before, may be an indicator of where the market is established to support or a top-level, and so investors look at this to try and establish places that they can start to buy or sell.