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It must be pointed out that as more people are participating in the market any attempt to predicate every action on chart rules , the accumulative effect of those similar actions self-creates price fluctuations which may take all chart techniques and make them virtually useless.

As a chartist, you have lots of company . Thousands of others are charting every move like you are doing. So, when there's the signal of a major move , you are liable to have a lot of the same orders as yours hitting the trading pits . In particular , having many chartists place their stop loss orders at points that are identical , can create false formations to occur. Charting is inevitably to some extent an inexact science , even for those chartists that have a stock technical analysis course under their belts .

It is a matter of choice on the chart scale used and whether to use closing or mid-price on it . 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 a lot of profit taking and more is associated with it . In addition, events that are dynamic or unforeseeable can cause mayhem with the charts .

Charting in some ways is an approach on the lazy side. The sheet of paper with a neat looks appeals to many who are weaker. Who have no penchant or time to try to dig deeper. Most feel it's more productive to look at all the variations . As technical analysis becomes more poplar and many begin taking a stock technical analysis course, it will commence to defeat its own purpose , particularly in a " thin " market .

It's imperative to understand if a lot of traders are using the usual chart interpretations to trade a given commodity , it can sway the commodity's price in the direction chartists expect prices to move . Chart followers can prove their own theories right . Pure chartists never want to know all about the fundamentals, a trader that is wise will try to use both strategies for futures trading . There is no 100% reliable chart formation . Confirmation must be sought from various other indicators by chartists, such as production changes each year, business cycle variation, and deviations in sums that are quantifiable, such as commodity prices, brought down to a single summary figure to show all the 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 the chartist must be ready for thorough study and hard work and develop experience . It is an art due to the finesse and experience and the skill of a technician . These are all definitely the essential ingredients of profitable trading . A technician has to check, and check again .

Another weakness of charting comes from the thought that although all the facts of a commodity situation are known to the speculator the same facts are known by many others who are professionals .

However, some events can occur without prediction and all traders are affected . prices may not have totally discounted these happenings, in which case the chartist may be caught off-guard and little can be done to keep a position in this situation protected except to recognize quickly these sudden changes and to act fast. ( Such as all the oranges being lost to a hurricane ).

Technicians are well know for one week making huge profits and then lose big time the next week . The facts are that prices don't change according to their performance in the past , but you can get an idea on a daily basis if you use P&L charting.

Most systems are indictable when it comes to advisability because of the absence of a track record . Each approach has to be looked at as unsuccessful until there is other proof . To be upfront about it, there is very little objective explicit evidence available to support the commonly accepted rules of chart analysis . 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 have to wait until the demonstration of the trend has occurred. Even then, the motto a chartist needs to have is that a trend goes on until stopping . Yet again, he attempts to anticipate the direction of a trend reversal as it evolves . It is not possible. You can only realize an evolving trend as it happens. 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 going through a string of bad losses , many traders have abandoned their technical studies because they never work . Since it occurs fairly often , it is further proof that trading success has no short cuts and there is nothing that works better than experience, work, and knowledge.

All that is known is that there will be fluctuation of prices, but the amount of fluctuation isn't known.

Only in congestion areas are you protected since they define the projection of any losses . In congestions, prices fluctuate . Any technical approach that attempts to analyze congestion areas , and when a trading method evolves , will give the trader and the broker glorious profits , as commodity prices are in congestion , one form or another 85 % of the time .

The universal problem known to the professional and novice alike is when they need to get in or out of a market. Due to this, a stock technical analysis course should teach you that technical analysis has to a large degree encompass price fluctuations in the short term ( Once again pointing to P&L charting).

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