When it comes to trading stocks (and their options), it's crucial to be directionally agnostic. They can go up or down; we don't care. The only thing that matters is that we're playing them the "right" way (i.e., buying call options on the big gainers, and buying puts on the losers), wherever they're headed!

Now, I'm not saying that you shouldn't know/like a stock's story. On the contrary — the first step to "getting" how technical analysis works is knowing how a stock behaves…and using exploiting both its trading rhythm and the anomalies in that process to your advantage.

You Already Have the Tools You Need

Take a look at your current portfolio — you've likely noticed which ones pop up after the company's quarterly earnings announcements. You know which ones trade flat during the summer as traders "sell in May and go away." You may have also observed which ones are more active than others, as the company may release more new products during the year than other companies.

Traders make the same observations about the securities in their accounts. The only difference is, they might trade more stocks, and hold them for shorter time periods.

Technical analysis is borne of patterns — how a stock traded in certain conditions over a certain time frame can influence and predict how it will trade in the future. Whether the conditions are the same or completely changed, past performance is a significant indicator of what it will or won't do, going forward.

Information about how stocks have traded since they made their market debut is available on a variety of free Web sites and through your online brokerage. You can easily find similar stocks in the same sector to compare their behavior and pick the one that best suits the way you want to trade.

If you prefer to buy stocks and/or buy call options as a surrogate for stock ownership, there are a lot of possibilities. But if you're also willing to buy puts to take advantage of stocks' downside, you're opening yourself up to a whole other world of possible profit opportunities!

So, Where Do You Start?