Every day I look at a ton of charts (as many of us do) in a attempt to find an edge. That time is split between analyzing the positioning of my current holdings, reviewing those I am stalking and the constant search for new opportunities. It is the clues in the charts that we are looking for. The more of these clues that show up the more complete a story the chart tells and the higher the confidence gets in the set up. A tireless effort to increase our probabilities to consistently extract money from the markets. Through my career one of the most important things I learned is to know my place in the process.
Every chart has a story to tell and as a Technician I am simply the narrator. It is important we learn this early. I intentionally did not say interpreter even though that is part of it; because I find often it becomes way too big a part of it. I believe It is our job to tell the chart’s story, not our story for the chart. The better we narrate, the less of our biases we interject. As humans we have a natural tendency to see what we want to see and hear what we want. If we go into our analysis with a bias, then we will likely come out confirming it. That is one of the reason I like to review many charts as it gives me a wider view and keeps me from honing in too much on one chart until it looks good enough to devote the time. Even with this process, I still get stuck on a stock from time to time finding myself telling my story for the chart, and not surprisingly those always seem to lose me money in the end. After I am out of the trade and reviewing, I quickly realize point when I forgot my role and started telling my story instead of the chart’s story. Trade what you see!
Good Luck, it is there for the making!