Chartist

Chartists are analysts who stare at charts showing past performance of share prices and try to deduce trends which will give an indication of what the markets will do in the future.

Some people will tell you that chartists are the stockmarket equivalent of astrologers. This is not true! There are astrologers who try to predict share price movements using the heavens. Chartists try to predict future share price movements from past performance.

Patterns within charts created from share price movements are interpreted to provide 'buy' or 'sell' signals. They believe that all the significant information about a company's performance is already reflected in the share price - therefore the study of price movements will itself provide the key to investment decisions.

In practice most institutional investors use a mix of charts and "fundamental" analysis (such as the state of the economy, demand for a company's goods, etc.) and so, perhaps, should you.

Be warned, there's an old saying 'the markets will do what they have to do to ensure most people are wrong most of the time'.

See Also: Online share dealing service Stockmarket Centre

Last Updated: May 2007 © Moneyextra.com

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