Technical Analyst or Chartist: Expert in Technical Market Analysis

Adam Hayes, Ph.D., CFA, brings over 15 years of Wall Street experience as a derivatives trader. With deep expertise in economics and behavioral finance, Adam holds a master's degree in economics from The New School for Social Research and a Ph.D. in sociology from the University of Wisconsin-Madison. As a CFA charterholder and holder of FINRA Series 7, 55 & 63 licenses, he currently researches and teaches economic sociology and financial social studies at Hebrew University in Jerusalem.

Who Is a Technical Analyst?

A technical analyst, often called a chartist or market technician, specializes in examining securities by analyzing past price data and technical indicators to make informed investment decisions.

Technical analysts focus on short-term price fluctuations driven by market supply and demand dynamics. They prioritize the current interaction between buyers and sellers over the fundamental value of the security. By interpreting historical trading patterns, they strive to predict future price movements accurately.

Key Insights

• Technical analysts use charting techniques and technical analysis to guide trading and research decisions.
• They identify price trends and patterns rooted in historical data to capture market sentiment and psychological factors.
• Many enhance their expertise by obtaining the Chartered Market Technician (CMT) certification, a recognized professional credential.

Understanding the Role of Technical Analysts

Technical analysis is a methodical approach to evaluating investments and spotting trading opportunities by studying statistical trends like price changes and trading volume.

Unlike fundamental analysts who assess a security’s intrinsic value, technical analysts concentrate on price movement patterns, trading signals, and charting tools to gauge a security’s strength or weakness. This approach reveals market psychology and sentiment through price history analysis.

Technical analysts rely on a diverse set of indicators and tools. Since no single indicator suffices for decision-making, they combine multiple signals to validate their hypotheses. There is no universal method for predicting price movements, so analysts develop personalized trading strategies based on experience and knowledge.

Quick Fact

Technical analysts work across buy-side and sell-side firms and had an average annual salary of $108,080 as of 2022.

These analysts depend on technical trading systems tailored mainly for individual traders, especially day traders. Brokerage firms typically provide advanced charting software featuring various chart patterns, while some analysts prefer third-party software to access a broader range of tools.

Certification and Licensing for Technical Analysts

Licensing requirements vary based on job functions, employer, and location, with many technical analysts needing FINRA licenses sponsored by their firms.

Professional certifications from organizations like the CFA Institute are common. Achieving the Chartered Financial Analyst designation requires relevant experience and passing rigorous exams. Other notable associations include the American Association of Professional Technical Analysts and the International Federation of Technical Analysts.

The Chartered Market Technician (CMT) designation represents the highest level of professional achievement in technical analysis. Issued by the CMT Association, it certifies mastery in investment risk, portfolio management, quantitative market research, and systematic trading strategies.

Technical analysis bridges the gap between intrinsic value and market price by applying disciplined, rule-based approaches to market behavior and supply-demand laws. Earning the CMT credential validates expertise in these critical areas.

Responsibilities of a Technical Analyst

Technical analysts study and interpret price movements of securities to forecast future trends. They apply statistical models to price data to estimate potential outcomes.

They communicate their analyses through internal presentations at investment firms and external seminars for clients.

Additionally, technical analysts often collaborate with fundamental analysts to produce comprehensive research reports covering stocks under brokerage coverage.

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