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It must be pointed out that as more people are participating in the market any work to chart and predict each action , the accumulative effect of those similar actions self-creates price fluctuations which might destroy much of the validity of all chart techniques .

As a chartist, you have lots of company . There are many others that are charting exactly the same movements as you are . When a big move is predicted, the trading pits will probably be hit with many orders just like yours . Particularly , stop loss orders being placed at the very same points by many chartists, can actually make various formations like false penetrations of trend lines occur . Charting is inevitably to some extent an inexact science , even for those who have a technical analysis course to help them out.

It is a matter of choice on the chart scale used and whether the closing price or the mid-price is what you use. To plot price movements , there can be a distortion to either. Usually the latter is used most often , but as it comes at the end of the day it is associated with a lot of profit-taking etc . Furthermore , dynamic and unforeseeable events may play havoc with charts .

Charting in some ways is an approach on the lazy side. The neat clinical look of a sheet of paper appeals to the many weaker brethren . Those who don't have time or liking to go further . Most feel it's more productive to look at all the variations . As technical analysis becomes more poplar and many begin taking a technical analysis course, this can defeat its purpose, especially in a market that is "thin" .

It's imperative to understand that is many traders are trading a commodity using usual chart interpretations , it can sway the commodity's price in the direction chartists expect prices to move . Chart followers can prove their own theories right . Although pure chartists don't want to know the fundamentals , combining futures trading taking from both strategies is what a wise trader will try. No chart formation is completely reliable . Confirmation must be sought from various other indicators by chartists, like business cycle variations, changes in year to year production , and deviations in sums that are quantifiable, such as commodity prices, reduced to a single summary figure to register all diverse activities .

There are many times a commodity ends up going contrary to considerations that are fundamental due to technical and other factors . To become successful a chartist has to be ready for hard work and a lot of study and to become experienced . This is an art form due to the finesse and experience and the skill of a technician . These are all definitely the essentials needed to trade profitably. A technician has to check, and check again .

Another problem from charting stems from the belief that while the speculator knows all the commodity situation facts these facts are also known by large trading houses and other professionals .

However, unexpected events can occur and all traders are affected . These occurrences may not have totally discounted prices , in which case the chartist may be caught off-guard and there is very little left that can be done to keep your position protected except to recognize quickly these sudden changes and to be quick to act . ( Think about a hurricane that takes all the oranges out to sea).

Technicians are well know for one week making huge profits and enormous losses the next . It's just a fact that prices don't change according to their performance in the past , although you do get some idea on a day to day basis with P&L charting .

Most systems and their advisability are indictable because a track record is lacking. Each approach has to be looked at as unsuccessful until proof shows otherwise. To be perfectly candid , there is very little objective explicit evidence available to support chart analysis and it's common rules . Quite a few chartists try to foresee trends. This doesn't work. You can't recognize or even assume a non-existent trend . When trying to use the following method to utilize a trend , you must wait until the trend has been demonstrated . Even then, the chartist needs to have a motto when it comes to trends which is that a trend continues until it stops . Yet again, he attempts to anticipate the direction of a trend reversal as it evolves . It is not possible. Only as it occurs can you become aware of a new trend that is evolving . Trend reversals or trends can't even be anticipated by most technical systems either .

When a move occurs that wasn't expected, many technicians have to start all over again . After dealing with losses again and again, many traders have abandoned their technical studies because they just don't work . Because this happens on a regular basis, it is further proof that short cuts don't exist to trading success and no substitutes for experience, knowledge and hard work .

All we know for sure is that prices will fluctuate , but we don't know how much they'll fluctuate .

You're only protected in congestion areas because this area helps to define the loss projections. In congestions, prices fluctuate . Any technical approach that attempts to analyze congestion areas , and evolves a trading method therein , will provide the trader (and his broker through lots of commissions) large profits, as commodity prices are in congestion , better than ¾ of the time .

The main problem that novices and professionals both deal with is when to get in and out of the market . On this basis , a technical analysis course should teach you that technical analysis must encompass to a considerable degree fluctuations of price that are short term ( Once again pointing to P&L charting).

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