Since traders need profits, all charts
contain the same information and all traders operate with similar
assumptions about market behavior based on chart formations.
But in sort technical analysis show nothing than a reflection of past
prices, nothing more. In itself a graph cannot predict future price
movements. A currency does not trade up or down because of a formation on
It moves because market participants make basic assumptions about future
price behavior based on the record of past price action. A charted history
of price action is the cumulative story of thousands of trading decisions;
it is a record of the past behavior of thousands of individual traders.
Price information is meaningful because traderís decisions give it
predictive power. A simple proof of the limited forward intelligence of
historical price action is the well attested notion that technical
analysis can show that history always repeat itself.