Technical Analyst: Description, Skills & Salary

<p>Technical analysts utilize the data in securities charts to make investment decisions based on patterns and trends. They might look at historical price levels for important movements, the purchase and sell volume of a stock on a given time-frame, or other indicators of supply and demand that could inform the future price movements of a security. The table below is an overview of the job description, skills, and salary potential for technical analysts. </p> <p /> <table border="1"><tr><td> <b>Responsibilities</b> </td><td> Inform investment decisions by analyzing price movements and other chart variables</td></tr> <tr><td> <b>Required Education</b> </td><td> Bachelor's degree preferred</td></tr> <tr><td> <b>Areas of Study</b> </td><td> Finance, business administration or related</td></tr> <tr><td> <b>Certifications</b> </td><td> Not required, but could be useful</td></tr> <tr><td> <b>Career Outlook (2020-2030)</b> </td><td> 6% growth (for all financial analysts)*</td></tr> <tr><td> <b>Median Annual Salary (2021)</b> </td><td> $65,909**</td></tr> </table><p><i>Sources: *U.S. Bureau of Labor Statistics (BLS); **PayScale.com</i> </p> <h3 id="section---WhatAreTheSkillsOfATechnicalAnalyst">What Are the Skills of a Technical Analyst?</h3> <p>Because technical analysis is a method of projecting the future price of a security based on available market information like price, volume and pattern recognition, the skills required are similar to those of financial analysts. Most skills relate to the proper analysis and understanding of both financial and mathematical data in securities price charts, such as price movements, volume, momentum, and weighted averages. Critical thinking is also required, as the combination of differing financial data points must be combined into investment recommendations with a proper analysis of how the decision was reached. </p> <h3 id="section---WhatAreTheEducationRequirements">What Are the Education Requirements?</h3> <p>A bachelor's degree is generally required for all financial analyst (including technical analyst) positions. Related areas of study include business administration and finance. Study and practice of technical analysis techniques is available as part of economic or finance courses at some universities. </p> <h3 id="section---AreCertificationsRequiredToPursueACareerInThisField">Are Certifications Required to Pursue a Career in This Field?</h3> <p>Though certifications are not required, several are available which certify a solid grasp of technical analysis techniques for potential employers. The Chartered Financial Analyst (CFA) certification, offered by the CFA Institute, is a well-known designation for all financial analysts held by more than 150,000 professionals worldwide. It includes technical analysis concepts as part of its program level I curriculum and final examination. Two certifications that specifically cover technical analysis skills include the International Federation of Technical Analysts' Certified Financial Technician (CFTe) and the CMT Association's Chartered Market Technician (CMT). </p> <h3 id="section---WhatAreTheRequirementsForCertification">What Are the Requirements for Certification?</h3> <p>Requirements vary depending on the certification. The CMT Association requires all CMT applicants to have a bachelor's degree from an accredited university, be in the last year before completion of a bachelor's degree, or have at least three years of professional experience in a role related to investment. The CFA Institute has similar requirements, though they require applicants without a bachelor's degree to have at least four years of professional experience instead of three. They also require all applicants to have a valid passport and be a resident of a participating country (be sure to check the most updated country list on their website). CFA applicants must also be fully fluent in English. The IFTA's CFTe designation has no education requirements, allowing all applicants to complete their certification test. </p> <h3 id="section---WhatIsTheSalaryPotentialAndCareerOutlook">What Is the Salary Potential and Career Outlook?</h3> <p>The U.S. Bureau of Labor Statistics includes data related to the technical analyst career field under the category for all financial analysts. In 2020, they estimated a median salary of $83,660 per year and a projected growth in job opportunities of 6% for this category. Salary estimates vary by industry, with the projection for analysts working in the securities, commodity contracts, and other financial investments industry (the most common for technical analysts) nearing a median annual pay of $98,850. PayScale.com tracks the median annual salary for technical analysts separately, estimating it at $65,909 per year in January 2022.</p>