Why we look at charts in the first place…

• Posted by Raghee Horner
• on March 9th, 2012

As a trader, I try to live by this every day.

This is paragraph from a recent article I wrote about harmonics.

Actionable application of analysis (three three A’s a trader must live by) is often the most difficult aspect of trading. Chartists and technicians alike could pour over charts spending sometimes hours on their analysis but if the end product is not resulting in actionable price levels or as I call them “decision levels” there is no point in the analysis. Hence, the old saying: paralysis of analysis. The idea behind a “decision level” is not only that it is support or resistance but that it is a level that will be reacted to. There are three reactions that can be expected at any decision level – regardless of how it’s indentified – and that is to accelerate through it, stall at or around it, and/or reverse from it.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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