Technical analysis (chart analysis)

Chart analysis (technical analysis) tries to derive future price movements from past price patterns. Analysts look for formations such as "head and shoulders", "double bottom" or trend lines.

Popular tools: moving averages, relative strength index (RSI), Bollinger bands, candlestick charts, resistance and support lines.

The problem: science is sceptical. Studies show that chart analysis does not reliably work better than chance in the long run. The efficient market hypothesis says that all available information is already priced in. Past price patterns say nothing about the future.

Recommendation: for private investors, an ETF savings plan (buy and hold) is much more promising than trying to time the market with chart analysis.