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Technical analysis is a way to predict future stock price trends using past market data. Many people have had positive results considering stock price and volume, however, academic mathematicians consider this method to be an overly simplified statistical analysis of market trends.

Over the past years, technical analysts have argued that a company's specific data affects the price and value of their stocks, therefore making fundamental analysis unnecessary. The method of fundamental analysis utilizes a comprehensive company profile to predict future trends.

Eliminating guesswork from the investment process is the goal of technical analysis. Using different data, fundamental analysis creates the same result with a different method. Technical analysis, however, gives a pure, quantitative gauge of future trends to help automate decision making.

Professional Technical Analysts will likely identify atypical patternsa such as the aHead and Shoulders Patterna. When looking at a graph, this pattern depicts three peaks with the center peak the highest, and the other two approximately the same. Patterns such as this, serve as graphic indicators by which an analyst will make trading decisions. Critics argue that these patterns are not mathematically valid, but rather are the result of humanas psychological predisposition to finding patterns in an otherwise random graphical environment.

Though technical analysts aim to objectively measure market trends, subjective bias may cause quantitative data to be overlooked. Attributing more or less weight to some statistical patterns or favoring certain charting methods are some factors that can limit quantitative prediction of the market.

Machine learning and artificial intelligence are the new frontier for both technical analysis and fundamental analysis. These computers can make the decision making process of investing automated, without consideration of how much data can be physically processed by an individual.

Unlike an analyst, a computer can pick up miniscule details that on the surface seem unrelated to the trend being evaluated. Additionally, is not predisposed to identify false patterns. Computers can identify trends of any size, though analysts tend to look for just the larger trends.

While it is plausible that many existing analytical paradigms will become obsolete as our tools improve, it is unknown whether machines will replace technical analysis or merely reveal the shortcomings of our prior techniques and help us to improve them.