As we know by now, fundamental analysis evaluates securities by attempting to measure their intrinsic value. In contrast to fundamental research, technical analysis focuses on statistical patterns in the price and volume of stocks.

Technical analysis can be applied to any asset class as long as the asset type has historical time series data. In the context of technical analysis, time series data pertains to the price variables - open high, low, close, volume etc.

To get an overview of trading activity on a particular day, we need to understand 4 key terms: Open, Close, High and Low.

The use of charts is so prevalent, that technical analyst is often referred to as chartists. One of the most commonly used charts is Japanese Candlestick.

A time frame is a period of time where price movements take place. This could be anywhere from a few seconds or a minute, to weeks.

Candlestick patterns are used to predict the future direction of price movement.

As the name suggests, a single candlestick pattern is formed by just one candle. The trades based on a single candlestick pattern can be extremely profitable provided the pattern has been identified and executed correctly.

Some other candlestick patterns are mentioned herewith.