With the rapid advancements in computer and internet technology, technical trading systems are one of the more realistic means an individual trader has at obtaining long term market success. A technical trading system can be defined as a set of rules, based primarily on the movement in the price and volume of a financial instrument(s), which are followed to make decisions on when to enter a market position (long or short) and when to close or exit a position. A technical trading system does not necessarily have to be a set of rules that can be automated and executed by a computer, but can involve human judgment (i.e. drawing trendlines or detecting chart patterns). To be successful investing in a traditional manner (i.e. fundamental analysis) requires access to significant amounts of information about individual companies, sectors, and the overall economy, which is sometimes difficult for those who are working on their own to obtain in a timely manner. However, developing and trading a technical system only requires access to historical market data for the development of the system, live data for the trading of the system, and a computer program to develop and test the rules of the system, and these things are all easily accessible to the average trader.
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