The first method, known as fundamental analysis, focuses on the material that a person would study in a college macroeconomics course. If a fundamental analyst can correctly identify these changes before the majority of participants in the market, the analyst has a good chance of making money. The other type of analysis, practiced by technicians, primarily makes judgements based upon price data displayed on charts. Until relatively recently, technicians have not been respected in the financial community. All publicly available information about a tradable commodity is already reflected in its price.
Prices move in trends or patterns.
History repeats itself. As a direct consequence of the first assumption, technicians believe there is little profit to be gained by researching economic fundamentals. This research in their opinion will lead to explanation of the current price rather than an accurate prediction of the future price . They have found commodity prices do not fluctuate randomly, like the chaotic scrawl of a small child, but follow distinct patterns, like the crest and peaks of waves. By trying to identify known patterns or discernible trends early stages their development, technicians predict rate movement based upon the historical continuations of those movements.