Chartist

  

Categories: Charts, Trading

An investor (usually a short-term trader) who lives and dies based on the shapes of the charts formed by the day-to-day and moment-to-moment trading of securities, like stocks and bonds. Trading usually follows certain patterns. Chartists make their living noticing and exploiting these patterns...using them to make predictions and select stock picks.

It's important to remember that the chart patterns tend to repeat themselves...until they don't. And then you lose the ranch. Just watch the video. And dust off your crystal ball.

Chartists were also 19th century British crusaders for the rights of working people. But how far can you go knowing that? Will it help you make stock picks? We didn't think so...

Related or Semi-related Video

Finance: What is a Chartist?26 Views

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Finance allah shmoop What is a chartist Well here's a

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chart and here's a chart and here's a chart All

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right Well these are pages from the investing bible of

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a chartist A chartist is an investor really a traitor

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as they tend to own stocks for a much shorter

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period of time than a longer term Really invest or

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type person a chartist relies solely on the patterns The

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pattern's right there These are all patterns imputed by the

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charts that they you know sitting poor threw for hours

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and hours So check out this chart see how the

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plotted data closely follows the characteristic line there The characteristic

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line basically is plodded through all those dots Yes So

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they're going to stare at that try to figure out

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where that line is going in the future right Get

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the crystal ball or all right Well let's look at

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this one where the data forms what looks like Well

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the head and shoulders of someone who you know doesn't

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have a neck that's Just common pattern in trading And

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you know if you stopped looking at it and two

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thirds of the way through there it's heading down Well

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Maybe you'd be short the stock for a few days

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and then you see it bottoming and then you'd be

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long and try to make money that way Good luck

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All right len look at this chart Where is right

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here where the data appears to We'll break away from

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the established pattern which was all just kind of boring

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Lee along down here And then suddenly everything goes up

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Yeah start doing its own thing Well maybe the company

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reported a good quarter or ah you know the government

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cut taxes again Everything went up So these were the

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tools of the chartist The chart's a chartist is the

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opposite of a fundamental investor meaning that she doesn't know

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or care what the company does for a living Really

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she doesn't care about their p e ratio nor their

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profit margins nor their debt levels on their balance sheet

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nor much of anything fundamental about how their business runs

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Chartist just care about the pattern they glean from the

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charts and all the charts always work until they don't

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And what happens when the meteor hits that is that 00:02:06.0 --> [endTime] predictable on a chart Ah

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