Let's take a peek into our history books to find out where it all began. The very first chartists in the United States appeared at the turn of the century. They included Charles Dow, the author of the famous stock market theory, and William Hamilton who succeeded Dow as the editor of the Wall Street Journal. After the famous stock market "crash" of 1929, Hamilton advocated the use of charting in an editorial entitled "The Turn of The Tide" and then proceeded to lay out the principles of Dow's stock market theory in a book titled The Stock Market Barometer.

The decade of the 1930s was the Golden Age of charting. Many innovative researchers published their work during that period including Richard D Wyckoff, a trader who started in 1888 as a 15-year-old stock runner and WD Gann, who began his career as a stockbroker in 1906. Their work moved in two distinct directions. Researchers such as Wyckoff saw charts as a graphic record of market supply and demand, while others including Gann and RN Elliott - famous for his Elliott Wave Theory - searched for a perfect order in the markets.

In 1948, Edwards and McGee published a book called Technical Analysis of Stock Trends. They popularised the use of chart formations such as triangles, rectangles, head and shoulders, as well as support, resistance and trend lines.

Things have changed a great deal since then. In the 40s, daily volume of an active stock on the NYSE was only several hundred shares. Today it's not uncommon to see an active stock trade tens of millions of shares each day. Bears were firmly in control of the stock market in the "good old days", but as years passed, the balance of power shifted and is now in favour of the bulls. Early technical analysts noted that stock market tops were sharp and fast, while bottoms took a long time to develop. That was true in the deflationary era of the 30s and 40s, but the opposite has been true since the 50s.

Now bottoms tend to form quickly while tops tend to take longer. Let's take a look at two subjects which help determine the success or failure of technical analysis in action: Science and Art. "It would be possible to describe everything scientifically, but it would make no sense; it would be without meaning, as if you described a Beethoven symphony as a variation of wave pressure."

Is it science or art? It may come as a surprise to find that Technical Analysis combines the dual categories of science and art. Although the subjects appear to be at opposite ends of the spectrum, joining them together creates a dual perspective that provides remarkable market insight. The resulting combination can be compared to night-vision goggles that give you just enough of an edge to stay ahead of the curve, shifting the odds of winning dramatically in your favour.

The scientific aspect of technical analysis (TA) presents itself in many forms. There are literally dozens of separate indicators and unlimited ways of applying them. A tremendous amount of research has been necessary over the years to develop each component and then even more research to determine effectiveness and reliability. Studies have shown that the wide array of technical indicators and methods exhibit different degrees of success depending on how, when and under what conditions they are applied. Sound difficult? It sure is. But it's our job to make it look easy, so leave the driving to us.

The artistic qualities of TA become obvious the instant you look at a visual display on a computer screen. Colourful charts graphically reveal elements of TA as different indicators are painted in patterns and lines. One look and you feel like it should be hanging in a metropolitan art museum. Less obvious than the graphic display, but just as important, is the impact of artistic interpretation. OK, so how should we interpret this painting? Realise that everything showing on the screen was put there by the chartist. Although the price bars are determined by actual stock prices, the placement of each line, the number of bars included in each moving average and the technical indicators used depends on the preference of the individual. And it looks so nice! But no matter how pretty the picture, it is far more important that the final choice of technical tools and patterns can be used to produce profits.

So it turns out that Technical Analysis is a hybrid of art and science that has evolved over the centuries. Due to the complex choices that have to be made, many newcomers will never recognise the tremendous value of TA and just as many will be shaken out of the game. For those who desire a long-term relationship with the markets, the time and energy spent on learning how to use this powerful technology will be well rewarded. However, using TA in conjunction with fundamental analysis is a safer route to follow than merely following the charts. Add in a healthy dose of common sense and you too could join the ranks of the great investors.

Written by Iona Minton and adapted from an article on www.themarketreport.com