Use Stock Charts To Improve Your Profit Potential

Stock charts are the only unbiased source of information as to where a stock has been, and many believe, where it is likely to go in the future. This is especially important given all the confusing voices pro and con a trader gets bombarded with over time.

First, there are the brokerage firms who give all sorts of ratings to stocks that range from “initiating coverage,” to “market perform,” to buy, hold or sell, and so forth. Then there are the Jim Cramers and other personalities of the world who hold a disproportionate influence over the decisions traders make.

To some traders, the use of charts may seem like something that is better left to savvy market technicians. Or, they might dismiss them altogether.

The truth, however, is that stocks tend to form the same chart patterns over and over again before making explosive moves. To ignore them, deprives you of one of the best and most objective tools available to pick a viable entry point—namely just when a stock is positioning itself to make a big move.