What's the deal with chart analysis?

Howdy everyone,

Well, I'm brand new to chart analysis and I'm testing out strats and theories @ investopedia...but one thing I can't wrap my head around is chart analysis. How are shapes and figures in charts a reliable way to analyze the potential performance of a stock?

Much obliged for the help, thanks.

 

Pick up a book or two on technical analysis and see for yourself.

 

You've got to mix technical analysis with tape reading, market sentiment analysis, economic analysis, a little dose of contrarian analysis, and some basic fundamental knowledge of credit cycles to be able to trade consistently. Using charts alone is 50/50 in my opinion. I use it only as one tool in a toolbox.

 

Being right 50% of the time and wrong the other 50% of the time is okay as long as you earn a lot more when you are right than what you lose when you are wrong.

 

I agree, if the average risk/reward is 1:2 you can make a lot of money with a 50:50 probability.