I hear a lot about support / resistance and people make trading/investing decisions based on charts.
To my knowledge whenever big institution or big money want to invest in a particular stock they will pour a lot money so obviously it will break all resistance and vice versa when they sell in bulk it will break support.
Also, whenever there are big events like this covid or war …all charts are disturbed.
So charts follows big money or big events …than why people give so much importance charts?
Is it just money making fancy game for some people and brokers or what? @ksksat@maddy_Des
Charts are part of technical analysis that is simply a hope that a particular pattern which was applied multiple times in history will repeat in itself this time as well.
There are false break outs and breakdowns as well.
That is why always see the volume when a breakout happens. If it happens on huge volume that indicates multiple players have entered which will move the stock still higherer.
Normally if it is just one big institution it will cool off in short 4-5 minutes
A breakout at higher side if it happens it will trigger number of stoploss on short side which will further propel the stock. For eg infosys after results day. The moment it crossed 904 it triggered a chain events.
Take kotak mahindra promoter bulk sale. Even after it happened the stock moved high further
So we should not fix a breakdown point based on isolated events like that.
Most of the time charts help to get the trades successful. At least they provide a basis for taking the trade. These are based on historical data, advanced statistics. At least far better then trading randomly.
Because we need something objectifiable to look at & comprehend. I know even blind person being successful in trading. People used to trade and be successful at it even before there were computers, charts, candlesticks, indicators etc.
Yes dear. Highly rigged also. Thats why only 2% succeed. They might have cracked the code!