Imagine if match.com and those other online dating sites could graphically represent a potential partner the way a chart does to a technical analyst.
To a chartist, price action is truth: total disclosure of all past ups and downs. To a chartist, past performance DOES predict future performance…
Analogy goes something like this: ‘His Chart’ would be a picture-perfect representation of the anguish and ecstasy of all his past experiences, relationships and reactions to events. Wouldn’t that be cool: to see them all–as far back as we want to look. What’s cooler: He would be incapable of lying for a good chartist can quickly size up if he is stable or volatile, easily manipulated or stubborn, a good reward or not worth the risk.
In order for this to work, a chartist’s judgment must be unbiased, even if he looks good on the surface or the crowd loves him. A chartist must weigh all the presenting patterns and timeframes against a backdrop of sentiment and value statements. It’s not always easy to trust our interpretation despite what others say about him. But one thing holds true to a disciplined chartist: If a chart doesn’t act right, don’t touch it!
If said chart holds our attention, because we see a pattern we like (and can manage), can we extrapolate his next move? His ‘aura’ of volatility even? Bigger question initially: Do we want to chase or have him come to us? Ah, the power to choose. Wouldn’t it help to preserve capital (both financial and emotional) to know how long to stay in the relationship? With proper chart reading, it may even be possible to avoid the waterfall events that suddenly dash all hopes when they come crashing down against the rocks. Some charts don’t do that.
The value shoppers/fundamentalists (otherwise known as ‘bounty hunters’ in the dating world) would only be interested in the size of his wallet and how he spends it. Sentiment traders would probably try to size up their commitment level, while highly skeptical, anticipating he will do the opposite of what he says. And we know what the scalpers would be looking for: a short-term hook-up; in some cases, as many as possible before they move on to the next ‘opportunity’.
To a technical analyst, a chart represents the potentiality of the future. Total disclosure of all ups and downs. A low-risk entry with good risk/reward and a favorable, high-probability outcome. Dating and Charting: the ability to ‘predict’ the future and the satisfaction of choosing wisely.
Man if it was only that easy!