Chartists are technical traders, theorists, and experts in charting, with the goal of better representing data and using charts to the greatest effect in trading. They attempt to find parameters and algorithms that can offer efficient trading signals and profits, using only the information present on charts – a type of technical analysis.
Technical analysis is a discipline that involves identifying price ranges, trend momentum, and points of possible reversals via graphical representations of the math behind price movements, examining information to the second or third derivative, and using trial-and-error with formulas. Geometry, calculus, physics, and finance all play a part in this methodology.
Technical analysts use past information about price, volume, standard deviation, and other metrics, translate it into useful charting tools using mathematical formulas, and construct systems for trading. The systems can bring discipline to a trader’s strategy by providing clearly defined circumstances in which a trader has reason to buy, sell, hold, and so on.
Technical analysis is different than fundamental analysis, which looks at the company behind the chart, its accounting and SEC filings, its market position among its peers, and other real-world information. Technical analysts focus only on the price and volume data, extrapolate as much information as they can from it, and attempt to find overbought and oversold conditions from that vantage point.
Chartists tend to believe that all the information you need to make money trading can be found on the right chart. They use oscillators and indicator lines, along with moving averages, trade volume information, and standard deviation bands, to find the optimal places to buy and sell. Chartists often find success with short-term trading, where technical analysis methods and well-vetted charting tools have a successful track record.
This discipline is closely related to robo-trading, which automates trading based on pre-programmed decision heuristics that identify buying and selling signals via technical analysis and charting. Successful traders look for tools that give them advantages: while no single indicator is 100% predictive, chartists and technical analysts will seek out ways to evaluate trade ideas, analyze signals, and provide key confirmation to help them make rational, emotionless, and effective trading decisions. Tickeron’s artificial intelligence offerings, like A.I.dvisor, can provide the confirmation, accuracy, and reliability traders need to make successful trades.
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