Chris Rowe

Chart Your Way to a Lifetime of Profits

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Charting has been used for investing and trading for hundreds of years, long before the Internet, investing books, training courses and other resources that we have readily available today to enhance our trading profits.

Charting market transactions is very similar to charting human emotions like greed, fear, ignorance and hope. These human emotions have not and will not change, and there are certain patterns that emerge again and again.

Applying this predictability to the stock market, I believe that it makes sense to use charts to time trades in just about any market that involves human emotion ... and today's crazy market can definitely evoke some strong emotion, to say the least! (See also, Make a Ton of Money Trading in a Volatile Market.)

What most people fail to understand about it is that technical analysis won't predict the future, but it will help you to assess the current market's trend (direction) and condition (risk -- whether it's overbought/oversold).

I can't possibly explain technical analysis to you in one article. But for the sake of clarifying today's stock market, I'll go over one of the most basic parts of technical analysis: trends.

Profiting From the Trend Starts With Defining It

The stock market's trend is simply the market's direction (up, down or sideways/flat).

An uptrend is defined by successively higher peaks and troughs. A downtrend is defined by successively lower peaks and troughs.