Like other analyst roles, technical analyst positions are excellent options for those who enjoy reviewing data, looking for trends in data, and then applying those trends to assist in making real-world decisions. But the technical analysis also differs from other analysis roles. Here’s why and what you need to know if you’re considering a career in technical analysis.

Responsibilities of a Technical Analyst

The goal of technical analysis is to track the fluctuations of technical indicators in the stock market to inform various investment decisions. What makes this role different from other analyst roles is its emphasis on technical indicators of stocks and the stock market, as opposed to analyzing the fundamentals of a company. For example, a technical analyst may track data relating to sharing price, trading volume, interest rates, etc. A technical analyst would then use this data to help make decisions relating to an investment – such as at what price to sell a stock.

Necessary Skills for a Technical Analyst

Technical analysis requires reviewing massive amounts of data. The ability for computers to assist in this process has led to the evolution of this position into one that relies heavily on computer software. Therefore, an understanding of computers and computer software is now a key skill for a technical analyst. Other skills technical analysts need include working with numbers, critical-thinking, knowledge of financial markets, and experience working with financial data. Effective technical analysts must also have the communication skills necessary to share their findings and the impact they have on investment decisions.

Education Requirements for Technical Analysts

The education most beneficial for a career in technical analysis differs from that of many other finance careers. Typically, a degree in a finance-related field, such as economics is necessary, but as previously mentioned, the skills required for a career in technical analysis are based largely on computer programming. This means that the best degrees if you’re interested in a career in technical analysis are IT related, such as computer science or computer engineering. Some other relevant degree options include statistics, math, and finance. If your degree is not in an IT-related field, you could gain computer programming experience in other ways, such as taking a computer programming class that teaches Java or SQL.

Career Path

Technical analysts may work in a variety of different fields and the exact career path will depend upon the field, the type of employer, and often the size of the employer. In general, when you begin a career as a technical analyst you start as an entry-level analyst. At this level, you spend the majority of your time gaining experience through assisting in the maintenance and application of various software as well as helping the technical analysis team come up with solutions for technical problems. After gaining a few years of experience, you may then be promoted to a role where you take the lead on more projects, as opposed to only assisting. Finally, if you excel in technical analysis and show leadership potential, you may lead a team of technical analysts.

Landing a Job as a Technical Analyst

A bachelor’s degree and a background in computer programming are essential for anyone looking to pursue a career in technical analysis, but if you’re looking to stand out to employers, you may also want to consider earning a certificate or license. There are a few different certificates and license options, and the right one will depend largely on the type of position and career you’re pursuing. Some designations that may be worth considering include the Certified Computing Professional (CCP) designation, the Certified Financial Analyst (CFA) designation, and the Chartered Market Technician (CMT) designation.

Salary Expectations for Technical Analysts

Since a technical analyst career includes positions ranging from entry-level to leadership, the level of compensation varies. According to PayScale, the average entry-level technical analyst makes $58,277, while an experienced technical analyst with over ten years of experience makes $71,270. When compared to salaries in other areas of finance, the entry-level compensation is fairly high but the compensation for someone more experienced is not quite as lucrative.

Is a Career in Technical Analysis Right for You?

Technical analysts must have a unique set of skills, including experience with computer programming and excellent communication skills. Since technical analysis is a more specialized field, the experience it provides is less applicable to other areas of finance compared to many other analyst positions. That being said, if you enjoy working with computers and numbers and are looking for a role in finance, a career in technical analysis may be right for you.

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