Some people will dismiss technical analysis and charting as just squiggly lines on a chart – and I for one am not the biggest fan of the chart pattern approach to trading or investing. That aside, there are often sound changes or shifts in investor sentiment that underpin the various patterns that are a major part of technical analysis for some chartists, so it is a topic that is worthy of coverage. Whilst technical analysis is a broad subject, one area that has been at its core since the beginning is the idea of chart patterns. Some of these can be quite subjective at the best of times, and easier to spot with the benefit of hindsight – which is not too helpful to those of us without a time machine as part of our investing toolkit. But they can still be useful for some – broadly speaking they can be divided into "reversal" or "continuation" patterns. |
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