Some real hardcore retail Value investors will argue charts are not helpful and they don’t care about charts as holding the stock for long term makes charts irrelevant.
But to the rest of us charts are the best way to judge the emotions and psychology in the market as stock prices are primarily driven by investors' sentiment. Stock prices move because of what the Big Boys (Market Sharks) are currently feeling and thinking, and not just because of the fundamental numbers that have been released to the market.
The stock market is never a level playing field and will never be. The Sharks will always be more connected, better informed, and mostly likely jump in ahead on the rest of us. When they act, stock prices move, and the movement can be so drastic that leave you with your mouth open wide. But these Sharks will leave behind their footprints on a stock chart when they move and for you to study how other sharks will move.
Price and Volume Action
Basically by watching the chart for price and volume action, we may have ideas of what the Sharks are doing. When a stock price moves on a big surge in the volume and it is telling us that a lot of investors have suddenly become interested or disinterested and desperately want to get in or get out. And if you happen to be holding the same stock that is experiencing drastic price movement; it is sooner or later you will be either smiling or weeping.
Last updated : 14 Sep 2019
I am 63 yrs old uncle living in HDB heartland who has achieved financial independence @ 56 and finally retired @ 60 from full-time job as employee on 1 Oct 2016.
Single household income since 1995 with three children.
Currently, two sons and one daughter are working.
I have been doing 20 years of long-term investing and short-term trading in Singapore stock market only since Jan 2000 so I am that so-called Panda or Koala in the investment world.
I am currently executing my Three Taps solution model to maintain sustainable retirement income for life till 2038.
Disclaimer: Stock trading involves significant risks. Create Wealth trader is not a licensed Investment Adviser and will not be responsible for any losses which you incurred. You are advised to always do your own homework before making any trading decision.