I'm sure you have your own method to picking out what stocks you like to buy. You might be a value investor who buys based on fundamentals. Or you may be a growth investor who looks for companies that have big earnings growth. Whatever type of stock you buy you need a method to know when to buy and sell.

That is where technical analysis can come in. Technical analysis cannot tell you if a stock is cheap or expensive based on fundamentals, but it can tell you when you should buy and sell, which is just as important. Technical analysis is all about using price action to time your entry and exit points.

There are three key things you need to know when it comes to charts and technical analysis. First you must understand that the price of a stock is already factoring in the future. A stock is high because people think the future is good and low when they think it is bad. So if you want to make money based on that you are trying to outsmart the entire world.

The second principle is that prices move in trends. There are predictable trends that repeat over and over again that you can take advantage of. The trader's mantra is "the trend is your friend."

The third principle of technical analysis is that patterns happen over and over again. Traders and investors tend to move in herds and do the same thing over again, because people don't change. This enables the technician to profit from the behavior of the crowd in the market.

The key is to distinguish important trends from meaningless short-term fluctuations in the stock market, this is important especially when investing in emerging markets. That is why you want to combine some sort of fundamental analysis with technical analysis. You want to use price charts as a tool.

The whole secret to investing is to get your emotions out of it as much as possible. Most people by because they fear missing out on more gains and sell when they let losses pile up and can't take them anymore. You just need to make rules to let your winning positions run and cut your losing positions quickly so they won't eat up your account balance.

Money doesn't fall from the sky. Making money in the stock market requires guts, grits, and tough work. You need to educate yourself on technical analysis in order to use stock charts and make money off of price action in the stock market.

For more from Mike Swanson get his free stock trading course at WallStreetWindow stock trading basics course.