The instantaneous access to information that financial institutions have gives them an enormous advantage over the individual investor when it comes to short-term trading. Most people don't have the time necessary to be a trader, watching the market every second, able to react instantly to to changes in the market. Technical analysts use their computer to chart a stock's price and volume over a period of time, in an effort to find patterns that indicate when to buy and when to sell a stock. Sometimes, though, it seems that interpretation of these charts is more of an art than a science, and sometimes the patterns are more easily discernible in hindsight rather than in real time. Diligence is also required to know when the signals are right to sell a holding.
Some investors rely on tips from friends, family, brokers, or they buy and sell merely on hunches.
This is usually one of the fastest ways to lose a bundle in the market. The average investor just doesn't have time to devote hours a day to following the market. By spending just a few hours a month, investors can build a successful stock portfolio, one that will stand up over the long term and deliver excellent returns. The setbacks have been relatively minor and short-lived, compared to the tendency of the market to grow year after year. That's why most individual investors should focus on growth for the long-term, and concentrate on fundamental analysis in building a portfolio of stocks.