In fact, technical analysis is all about past chart patterns only. For example, technical analysis believes that stock prices move in trends that are discernible and can also be modelled and extrapolated. In technical analysis prices of securities tend to move in observable trends with a tendency to stay in the trend. The trend is considered to be intact until the trend line is broken. What this means is that there are two established phases. For example, if the upward trend is created it is sustained till the time it is broker decisively. Similarly, once the trend is broker then the new trend stays till the time it changes direction once again. After a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. As a trader, you must have surely heard of that age old wisdom that “the trend is your friend”. This trend identification and extrapolation is the original of this adage and it basically means that you must not try to outsmart the market. Instead you must operate within the confines of the trend that the market throws up. After all, the market is all-knowing.