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Can Charts Help You Trade Better?
By admin | December 31, 2007
Its a debate that has been raging for years. Can learning how to trade with chart patterns help you become a more effective trader? Do fundamentals matter? What about news? Can charts help you anticipate news before it happens?
I prefer to take a middle of the road approach. Instead of looking through tens of thousands of charts, why not limit your search to companies who know how to make money? A company that is strong fundamentally, will usually have a strong chart pattern. However, thats not all to it.
Fundamentals tell you how a company has done in the past, but does nothing to suggest where its going in the future. Its like driving with only your rear view mirrors. It can be done, its just very difficult.
This is where technical analysis can help you. By identifying chart signals, trend lines and chart patterns, you are in a better position to anticipate whether or not the strong returns the company has provided in the past, will continue into the future.
Topics: Business |