From the time that Nico Copernicus (no, not the Melbourne grocer, gosh!) discovered that the earth was circling the sun, we can see what happens with a little bit of knowledge and a closed mind. The poor fella waited until he was dying before publishing his discovery as he knew he was going to cause a bit of a stir. Those who agreed with him were called heretics.
So to it seems that those that use charts today will be looked at with a funny stare. Rather than look at how data is used with the chart, and at the application of this dark art, it is easier, and much less effort to just dismiss it. It is true that many black boxes were made and sold off to the naive in get rich quick schemes, and this has seemed to flow down onto all that came after.
Like everything in life, to excel you need education, and appreciation of how to use and find data. And this differs greatly for a day trader and those who want to hold longer term. A day trader may simply search and trade price/volume breakouts, and may do really well doing so. He/She will not care what long term company prospects look like. They only care about the next few pips, and they can do really well with this approach. The longer term holder will investigate the product, the BOD, the market cap vs peers, product pipeline etc etc and decide if a buy in is worth while. They will then use this knowledge with a chart to help decide a buy in price, and prices when a top up could be worthwhile. Perhaps as more knowledge of the company and companies' chart is built low risk trades can be made along the way. They will have an idea if and when the next announcement should be due, as they are confident to take some shares out of the market for profit along the way, and buy back in at a lower price. For others this trade would be a no no, as they might be out of the market for the next trading halt. We need all three of these types of investors, as we need liquidity, and yet need to have some shares off the market to ensure value growth.
I try and do some kind of course each year to learn more from an expert. So I take some of the profit made and invest in myself. I have been lucky enough to learn from someone who knows all about just one thing (soybean contracts) and uses charts, weather etc to buy sell soybean contracts at great profit. Another very smart fella showed how charts, stars, numbers and more can help give insight into the answer of those binary decisions that will occur in the future. He was, until retiring early, employed by a very large US broker firm. Others have taught me how a candle shows the emotion of the market, and how simple application of math can be used to determine patterns. By gaining more insight in how others use charts I attempt to use a hybrid of TA and FA.
Recreation flyers will use a chart to determine takeoff and landing performance. These charts use historical data provided by the aircraft manufacturer of certain test points on a new aircraft. These points are then extrapolated to produce a chart. Most civil light aircraft are now 40 to 60 years old, and yet the charts remain the same. The performance of the aircraft will have undoubtedly declined with age, yet the avid flyer will still trust his/her life with this performance chart. In fact, they will be tested on it by the government authority for licensing. More charts will be used to determine range, Altitude etc and still with a chart based on new aircraft, being used for an aeroplane that is old. And it seems to work, if applied correctly using knowledge and common sense. Pretty much the same as using a chart with your investment can be.
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