There are many great traders that use technical analysis to successfully trade the markets.
The top traders listed openly discuss their technical trading style, either through books, interviews or on social media.
New traders can view these top traders as inspiration for their own trading or study the exact technical indicators and chart patterns these top traders use.
Studying what type of technical analysis these traders use will help a new trader learn what indicators and chart patterns are worth using to analyze the financial markets and which ones should be avoided.
It will also help new traders speed up the learning of technical analysis.
Knowing the approach of top traders means a new trader can narrow their focus to one section of technical analysis rather than trying out everything.
7 top traders that use technical analysis to trade the financial markets include:
- Peter Brandt
- Linda Bradford Raschke
- Jesse Stine
- Ed Seykota
- Scott Ramsey
- David Ryan
- Michael Marcus
These traders all adopt a technical analysis style of trading in various markets from equities, currencies, futures, bonds, commodities and options.
Peter Brandt is the author of the books Trading Commodity Futures With Classical Chart Patternsand Diary Of A Professional Commodities Trader. He is currently the CEO of Factor LLC. He is also a trader with over 40 years of trading experience (1).
As per the book Unknown Market Wizards by author Jack Schwager, Peter Brandt has produced an annual compounded return of 58% over 27 years (2).
Peter Brandt uses a technical analysis style approach to trading commodities, futures and currencies.
His main focus is on technical analysis chart patterns that form on the price charts of these financial markets. The most popular chart patterns Peter uses to trade include the head and shoulders pattern, bull flags, bear flags and channels.
Typically, Peter will trade these patterns when the price breaks out of the pattern, either by buying or shorting the breakout.
Linda Bradford Raschke
Linda Bradford Raschke is the author of the book Trading Sardines. and founder of LBR Asset Management. She is a retired Commodities Trade Advisor (CTA) and a full time trader, having started trading in 1981. Her hedge fund was ranked 17th out of 4500 for best 5 year performance by BarclaysHedge (3).
She was profiled in the book The New Market Wizards: Conversations with America’s Top Traders by Jack Schwager (4).
She mainly trades the indexes, commodities, stocks and futures by using a technical analysis approach to buying and shorting these capital markets.
Linda’s trading strategy involves using technical analysis indicators and chart patterns including horizontal support and resistance levels, volume, momentum and channels.
Jesse Stine is a full time small cap swing trader that uses both fundamental analysis and technical analysis to find stocks to trade.
He authored the book Insider Buy Super Stocks which details his approach to trading in detail.
He is known for turning an initial capital amount of $46,000 into $6.8 million in 28 months (5).
Jesse’s trading strategy involves using the SEC filings to find small cap stocks with a large amount of insider transactions and combining this with technical analysis indicators like moving averages and bollinger bands to find the lowest risk entry points with the highest rewards (6).
Ed Seykota is a top commodities trader that uses a technical analysis approach to trading. He is the author of Govopoly in the 39th Dayand The Trading Tribe.
He was featured in the book Market Wizards: Interviews with Top Traders (Updated)by Jack Schwager where he discusses his trading approach. He is known for turning $5,000 in initial capital into $15 million over a 16 year period (7).
His technical analysis approach to trading involves a trend following system that uses moving averages, volume and chart patterns to govern buying and shorting decisions.
Scott Ramsey is a futures trader who founded the hedge fund Denali Asset Management. He was profiled in the book Hedge Fund Market Wizards, How Winning TradersWin by Jack Schwager.
He has returned a 17.2% average net return per year over his years of public trading (8).
Scott’s strategy involves the use of both fundamental and technical analysis. He uses top technical indicators like the 200 day moving average to gauge the overall trend and RSI to spot divergences between the RSI and the price of the market.
David Ryan is a stock swing trader, 3 times US Investing Champion and he co-authored the book Momentum Masters: A Roundtable Interview with Super Traders.
He made a combined 1,379 percent compounded return over the 3 years he won the investing championship (9).
David uses a technical analysis blended with a fundamental analysis style trading strategy known as CANSLIM.
The technical analysis approach of his trading strategy involves finding stocks forming chart patterns like a cup and handle pattern or tight bases, as well as stocks trading above moving averages.
David buys when the stock is breaking out of these chart patterns.
Michael Marcus started his career as a commodity research analyst. He then went on to become a commodity futures trader.
He was featured in the book Market Wizards, Interviews With Top Tradersby Jack Schwager.
He is now a retired commodities futures trader who turned $30,000 into $80 million over a 20 year period (10).
He used a trend following technical analysis approach of riding the trends in the financial markets.
Technical analysis used by Michael Marcus mainly involves chart patterns as well as market sentiment indicators.
What Makes A Good Technical Analysis Style Trader?
Typically a good technical analysis style trader has certain traits or qualities that make them great. These include:
- The follow a technical analysis strategy with discipline
- They have a proven track record of solid performance
- They cut their losses quickly
- They let their winning trades run
- They understand the importance of risk versus reward
- They understand position sizing
- They can think independently
These traits are what separates a mediocre trader from a top trader that follows a technical trading strategy.
Can Technical Analysis Help Traders Become Great?
While some academics and researchers have argued that technical analysis is a fad and cannot be trusted, the evidence from the top traders listed above is proof that technical analysis when executed with discipline and solid rules can be profitable.