Finance: What is a Chartist?

What is a Chartist? A chartist is a trader and/or analyst who relies on technical analysis and charts in order to make decisions for trading the markets. While fundamental analysis may also factor into the chartist’s equation, the preponderant reliance will be on technical analysis and charts that will be used to find past historic trends that are signalling a probable repeat, and thus a trading opportunity.

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Transcript

00:22

period of time than a longer term Really invest or

00:26

type person a chartist relies solely on the patterns The

00:31

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

00:34

charts that they you know sitting poor threw for hours

00:38

and hours So check out this chart see how the

00:40

plotted data closely follows the characteristic line there The characteristic

00:46

line basically is plodded through all those dots Yes So

00:48

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

00:50

where that line is going in the future right Get

00:52

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

00:54

this one where the data forms what looks like Well

00:57

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

01:00

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

01:03

you know if you stopped looking at it and two

01:06

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

01:08

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

01:10

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

01:13

long and try to make money that way Good luck

01:16

All right len look at this chart Where is right

01:17

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

01:21

the established pattern which was all just kind of boring

01:24

Lee along down here And then suddenly everything goes up

01:26

Yeah start doing its own thing Well maybe the company

01:29

reported a good quarter or ah you know the government

01:31

cut taxes again Everything went up So these were the

01:34

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

01:38

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

01:42

or care what the company does for a living Really

01:45

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

01:47

profit margins nor their debt levels on their balance sheet

01:51

nor much of anything fundamental about how their business runs

01:55

Chartist just care about the pattern they glean from the

01:59

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

02:03

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