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It needs to be pointed out that as more people are involved in the market any attempt to predicate every action on chart rules , the affect that accumulates can cause fluctuations to occur which might destroy much of the validity of all chart techniques .

As a chartist, you have lots of company . There are literally thousands of people charting exactly the same movements as you are . Thus when a major move is signaled , the trading pits will probably be hit with many orders just like yours . Specifically, having many chartists place their stop loss orders at points that are identical , can actually make various formations like false penetrations of trend lines occur . Charting is inevitably to some extent an inexact science , even for those chartists that have a stock technical analysis course under their belts .

You can make the choice on the chart scale used and whether the mid-price or closing price is used . To plot price movements , there can be a distortion to either. Usually the latter is used most often , but since it happens at the end of the day it is associated with a lot of profit-taking etc . In addition, chaos can occur to the charts because of events that are unforeseeable or changing.

Charting is to some extent a lazy approach . The sheet of paper with a neat looks appeals to many who are weaker. Who have no time or inclination to delve deeper . Most people like to think it is more productive to look at all the wiggle-waggles . As technical analysis becomes more poplar and more and more people take a stock technical analysis course, this can defeat its purpose, particularly in a " thin " market .

It's imperative to understand that if enough traders are trading a commodity using usual chart interpretations , the price of the commodity will be influenced in the direction chartists expect prices to move . Their own theories can be proven right by them . While a pure chartist does not wish to know a thing about 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, such as changes in production from year to year, variation in business cycles , and deviations in sums that are quantifiable, such as commodity prices, brought down to a single summary figure to show all the activities.

In many cases a commodity goes totally opposite of basic considerations due to technical and other factors . To thrive chartists must be ready to do a lot of work and study and develop experience . Charting is an art due to the finesse and experience and the skill of a technician . These are no doubt the essentials needed to trade profitably. A technician has to check, and check again .

Another difficulty 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, truthfully certain events can occur unexpectedly and all traders are affected . These occurrences may not have totally discounted prices , in which case the chartist may be caught off-guard and not much can be done to protect a position in such a situation except to be alert to recognize sudden change in the market trend and to be quick to act . ( Such as all the oranges being lost to a hurricane ).

Technicians are known to make a huge profit in one week and enormous losses the next . It is a fact of life that prices will not fluctuate according to what their past performance dictates , although P&L charting can give you a good idea on a daily basis .

The advisability of most systems is indictable because there is no track record . Each approach has to be looked at as unsuccessful until it has proved otherwise . To tell the truth , there is very little objective explicit evidence available to support all the rules that come with chart analysis. Trends are anticipated by various chartists . This is a falsehood . One cannot assume or recognize a trend that does not exist . In attempting to utilize a trend following method , you must wait until the trend has been demonstrated . Even then, the chartist's motto with regards to a trend  that until it stops, a trend continues. Again , he tries to figure out the trend reversal direction as it happens . It is not possible. One can only be aware of the new trend evolving as it occurs . Most of the technical systems aren't able to predict trend reversals or trends.

If a move occurs that is unexpected , most technicians have to begin again . After dealing with losses again and again, many traders have abandoned their technical studies since they don't actually work. As it is a fairly common phenomenon , it is further proof that trading success has no short cuts and nothing substitutes for hard work, knowledge, and good experience .

The fact that prices fluctuate is all we know for sure , 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. Even in congestions prices will fluctuate. Technical approaches that attempt to analyze these congestion areas, and when a trading method evolves , will provide the trader (and his broker through lots of commissions) huge profits , since commodity prices happen to be in congestion , more than 85% of the time in one form or another.

The universal problem known to the professional and novice alike is when to get in and out of the market . Due to this, a stock technical analysis course will help you learn that technical analysis must encompass to a considerable degree fluctuations of price that are short term ( Yes, another good plug for P&L charting ).

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