The importance of Charts

,
Able Trading Opinion Forex

Charts are lagging indicators?

That is what we are told by fundamental proponents

 

You cannot argue with that statement.

However, you can certainly think about it differently.

Charts are lagging indicators to those looking at the chart but, the players that make up the market is expansive.

The smart, deep pocket players creating the chart will be way ahead of the herd.

Sure, charts document what has happened, we understand that much.

Whereby, money has been put to work, which has created the price chart for your chosen asset.

The speculators put their capital to work based on varying factors found during their analysis process.

This may be in part geopolitical, macro economic, carry, risk events, market dislocation and of course technical factors to name a few.

 

5 banks account for 40% of the $5.4 trillion volume in 24 hours in the Forex market

 

With this in mind, their capital will generally be put to work a lot earlier than the rest of participants in the market such as retail traders.

The point I’m making is, the smart money is way ahead of the curve, thus creating some telling signs on the charts.

So what is described as lagging to some degree is also leading depending on how you look at it and process it as part of your analysis.

This will better highlighted on Quarterly, Monthly and weekly charts.

It’s the rate of change, not just the price change that can give you the indications you need.

To see momentum push the price in the path of least resistance.

If you are so inclined, you can then look at the data behind the move to glean some information as to why.

Macro-Fundamental analysis can very complex, in-depth and a somewhat subjective area of analysis.

I find it really annoying when individuals discount a way to create ideas to trade.

If it works I say great. Could be technical, could be fundamental could be a bit of both.

 

The truth is there is plenty of ways to extract money from the markets.

You have to work out what works best for you.

Don’t be put off by the technical naysayers.

Equally, do attempt to gain information on the fundamentals that move markets.

Thanks for reading.

 

 

 

2 replies
  1. German measles
    German measles says:

    I think this is one of the moѕt vital information for me.

    And i am ɡlad reading yоᥙr article. But want tο remark on some general things,
    The web site style is wonderful, the аrticles is really nice : D.
    Good job, cheers

    Reply

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *