Technical traders use array of technical indicators such as simple moving average (MA), relative of strength index (RSI) or momentum to help them to see the current price trend and spot trading opportunities.
The technical traders are very mechanical and methodical and they use a range of technical indicators to highlight where current prices are heading and how to trade them. Technical traders or technical analysts seek to utilize historical price trends to determine future price actions. They believe that history repeats itself so they are ignoring much of the noise in the markets that can be created from breaking news, earnings reports or boardroom instability.
Main features of technical traders:
- ignores breaking news (like earnings reports and boardroom instability)
- have mechanical and methodical approach
- they utilize historical price trends
- they predict that history normally repeats itself