Oracleyoda writes:Oracleyoda / Len / others - I'd be interested...

Oracleyoda writes:

"I have followed Len for some time on several stocks. I credit him with causing me to change my mind about charts and read some books that hard core fundamental finance people (like me) would never open."
...
"In order to really understand charts, I think about how you feel about price movements as a holder and as a potential buyer when price targets are hit. These feelings are manifested in the behaviour of hundreds of traders giving life to technical theories. The patterns are an expression of what market participants are feeling and expressing in trading decisions. Some of the books actually associate certain candles with how the collective market was feeling when it was creating that pattern."

Oracleyoda / Len / others - I'd be interested in recommendations of such books on charting, ones that have changed opinions of fundamental investors.

While I recognise that there must be some value in charts, I find myself driven away from the idea by the way some chartists approach the chart as having intrinsic meaning in itself. That perhaps gives rise to the opinion of many fundamental investors that "the trader traded because the chart told them to".

Various of the charting techniques are clearly a representation/measurement of a complex system (though being a simplified representation have lost much detail on the actions and causes) -- an attempt to model a system where nobody can see all the hands. I am interested to read and think more in the area.

I am intrigued how well techniques take into account only one or two big fish acquiring or dumping & the tied actions of both small fish and big traders. That is - I'm perhaps more comfortable with explanation that paints a picture of sample scenarios and from that illustrates what the chart might look like. Perhaps just my scientific mind coming to the fore, I am always more interested in the underlying cause than the visible output -- and that comes down to individual humans making decisions -- game theory mixed with a good amount of emotion.