31/07/2020
Many traders and analysts, and most casual traders have no idea how to really read a chart. For most people, chart reading involves some variation of looking for a handful of favorite patterns on charts. Others are simply overwhelmed by the mass of information and have no idea how to sort out what is really significant from the hundreds of small details and random noise. Large buyers and sellers, whose actions really determine the price of a stock, leave tell-tale patterns in the prices of stocks. Chart patterns can be powerful tools to understand the relative conviction of these two groups, and to get some advance warning of when their convictions wax and wane. Nothing works all the time, but this provides the trader with a tremendous potential edge in the market that, properly applied, can lead to consistent profits.
