Technical analysis of stock trends - 8th edition

12 Technical Analysis of Stock Trends
reader prefers to keep his own — can be posted easily from the Sunday
morning editions of those daily newspapers (e.g., The New York Times or
Barron’s Business and Financial Weekly) that publish a summary of the previous
week’s transactions.
In concluding this chapter on the construction of the charts that we shall
study in succeeding chapters, it can well be said that there is no special
virtue, certainly no magic, in the chart itself. It is simply a pictorial record
of the trading history of the stock or stocks in which we may be interested.
To the man possessed of a photographic memory, no chart work is necessary;
his mind records all the necessary data — he carries his charts in his head.
Many of the expert “tape-readers” who have no use for charts are gifted
with that rare memory talent which renders reference to graphic records
unnecessary. But most of us are not so blessed; to use the chart is necessary
and useful because it lends itself conveniently to the type of analysis which
indicates future probabilities.
There is a saying on Wall Street to the effect that “there is nothing wrong
with charts — the trouble is with the chartists,” which is simply another
way of expressing the truth that it is not the chart itself but its interpretation
that is important. Chart analysis is certainly neither easy nor foolproof. Yet,
it is not at all uncommon for some casual investor who has no idea whatever
of market technics to pick up a chart by chance and see in it something which
he had not hitherto suspected, something perhaps which saves him from
making an unfavorable commitment.
If you have never used stock charts, never paid much attention to them,
you may be surprised at some of the significant things you will quickly
detect as soon as you begin to study them seriously.