Charts don’t lie. Charts provide a visual display of the numbers that drive futures trading. Charting allows traders to effectively track and analyze price trends. Technical analysis of these price trends provides the solid basis on which traders base their buy/sell decisions.
Charts show you the here and now. Charts show what is actually happening, not what someone says is happening or wants to happen or hopes will happen. Each mark on a price chart shows what traders actually did, when they bought, when they sold and how much. Charts show facts — what IS, TODAY, NOW. Futures traders focus on what happens now, two minutes from now, an hour from now, perhaps a week from now. They watch their charts for indicators and patterns that they can use to guide their trading. Charts help a trader assess the merits and risks of making a particular trade at that particular moment in time.
Charts are not foolproof and provide no guarantee of success, but they do provide an accurate indication of the probability of what market will do. Futures traders study charts of past market activity, searching for patterns and noting what the market actually did at that time. They use that knowledge to help direct their decisions when they see a similar pattern developing in the here and now. Charts help traders see and find repetitive market cycles. Remember, the market is driven by greed, fear and uncertainty. Greed causes the market to soar, fear sends it plummeting and uncertainty shows up as a lateral holding pattern while prices stabilize. These events happen in regular cycles and are often precipitated by the same indicators or price patterns. Charts reveal these secrets to the astute futures trader.
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