One of the most noted theories is Bollinger Bands . Simply put, Bollinger Bands are average price levels above and below the current price. If the stock price crosses these levels then the analyst's interpretation suggest that you should either buy or sell the stock in question. There is no one theory that is always correct. As a trader, you should learn to judge when a theory works for you.
Some people pick one theory and use it exclusively.
Others use a combination of theories. As always, we must caution you to do your research carefully. We have often found that when the market is very volatile, technical analysis doesn't work for us while other traders believe that technical analysis is the only way to judge a stock. Be careful, buyer beware. Below, you will find major portions of the book on Technical Analysis brought to you free by Equis International.