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Chart vs. Technical Analysis

Is there a difference between chart analysis and technical analysis?

In my opinion there is. I am surprised at how many traders lump charting together with technical indicators into a category they call "Technical Analysis." I am often accused of being a technical analyst because I am not a fundamental analyst. In the past, I've often carelessly, and without much thought, allowed myself to accept the general view that if you are not a fundamentals trader, you must be a technical trader.

If it hasn't already been done by others, I want to create a category called "Chart Analyst." I am a chart analyst ("Chartist," if you prefer). I am not a market technician, I am not a fundamentals analyst, and I most certainly am not a technical analyst. I use technical indicators to about the same degree I use fundamental information for operating my trading business and making my trading decisions: very little.

My reading of charts does not preclude my use of fundamental information, nor does it preclude my use of a technical indicator when I deem such use to be appropriate to the operation of my trading business.

I refuse to be placed in a box of someone else's making. If I have to be placed in a box, and apparently for many traders I do, then place me in the box of being a chart analyst. Why am I a chart analyst? Because it is the best way to see what's going on that I've been able to discover.

I am not going to negate the value of fundamental information when such information can render a better result from my trading. I am not going to negate the use of a technical indicator when such an indicator can benefit my trading. But I am going to do the bulk of my trading from what I can plainly see on a bar chart showing me the open, high, low, and close.

Trading solely from fundamentals has too often gotten me in deep trouble. The same is true of trading exclusively from indicators. I want whatever gives me the best picture of reality.

 

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Sunday, 09 August 2020

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