Friday, May 28, 2010

Charts don't move markets

One of the things I heard Larry Williams say at the MTA syposium last week is that it's important to remember that charts don't move markets. This is true. Charts do many things—provide a visual price history, reflect patterns, diplay volatility—but they aren't the reason that prices go up or down. Things such as central bank policy (i.e. the Swiss central bank intervention we've seen in the EURCHF), international trade, and sentiment (is there anyone anymore who loves the Euro?) are just some of the factors that influence FOREX.

What the charts do, though, is provide a straightforward way (usually) for the trader to determine entries and exits. They provide clues as to market direction even though there are no guarantees the market will move in that direction. However, as you see if you read my blog regularly, trading these clues can be profitable. If you enter when the probability is greater that the market will move a certain way and if you use tight stops, charts are wonderful things.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.


  1. Charts are only the result which shows how the mkts moved in the past.


  2. They do this, yes, and they also provide valuable clues as to what markets are going to do in the future.

    Dianne Fecteau, CMT