Psychology behind Chart patterns?

[Peter8519]

We don't know what the price will be tomorrow. As long as we are mindful of this fact, then we will be OK. We use chart, fundamental, model or whatever means to forecast or predict the future price. Try as we might, it's just a bet and we could be wrong. What keep us in the game is to minimize loss on the "wrong bet." I am sure everyone here has some big fish that he or she miss. Keep trying and we will catch a big one someday and that's the attitude. Cheers!

 

[Beerbeen]

Bullish chart patterns are characterized by a strong upward trend followed by a sharp decline. These patterns tend to occur after a period of stability where prices have been relatively stable. When the market begins to move upwards again, traders often look to buy at the top of the pattern.

 

[murray t turtle]

What is the psychology behind a traffic jam ?
How do you exploit it to take the lead ?

Uhu … Good luck

You definitely have feedbacks and loops,
Better read George Soros than Sigmund Freud.

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LOL WHAT traffic jam, most are early + late?? I aim to avoid them, that is when i can.
SEPT in farm country, tractors + combines accidently hog jam the road, so cant really predict.
I tend to ignore psycho-bable; except sometimes WSJ promotes something that may help a bit.[4] Four Factors, book by Mr Friedland.
Seems like in business, fried can be a either real good thing \ like KY Fried Chicken[KFC] Or some crooked bankmans Fried people\ like piece of burnt Bahama bacon
Like Zghorn notes study root + fruit. Stark fruit trees bear fruit , corp symbol = bear.
Average fruit tree bear time 3-7 years , assume right soil + rain which may or may not happen.

 

[Option_Attack]

Too true... Along with "I lost money when the stock dropped. Luckily it was on low volume!"

View attachment 299656

 

[Fiotrader]

The shapes that trading chart patterns frequently take can help predict price action, such as stock breakouts and reversals and can be really helpful for traders.

 

[proftradingjourney]

Idk if the op was getting at it from this angle, but it is an interesting to think about why these patterns keep occurring in the market. Some think it's a self-fulfilling prophecy others think its fear and greed of people during market extremes. I honestly don't know, but it's probably a mesh between these two factors and institutional buying at key moments when the price drops / when interest increases.

These patterns have occurred decades, even hundreds of years ago, before there was any charting, in-depth TA going on. I think its probable that these patterns work best in securities that have widespread coverage, be it media, stock analysts, etc.., that have made big price moves, are hyped to be the next big thing (some have become that), which increases interest from market participants big and small. The chop in price plays on peoples emotions, which either causes big moves up/down. Whether or not these securities stay the course for the long-term is another discussion, but you can probably trade off this element.