A chartist is a trader who relies predominantly on charts to help them understand a financial instrument’s historical price movements, in order to better predict and to speculate on its future direction.
What is Chartist?
A Chartist is a devotee of technical analysis and a believer in predicting future price behavior for currencies, commodities, or stocks. This individual uses charts and graphs and interprets historical data to find trends, relying on their associated indicators to determine when to enter and exit the market. Critics of the technical analysis point to Random Walk Theory that suggests that all information, including past price behavior, is reflected in the current price and that any future price movement must be random, thus unpredictable. While academics refuse to budge from these arguments, forex traders have become very successful at applying technical principles to their advantage in very turbulent currency markets.
To academics and politicians' chagrin, markets gyrate and form wave patterns while they seek equilibrium. Technical analysis focuses on detecting these patterns, suggesting how the waves will play out, and generating high probability trading signals for achieving short-term gains.
Forex indicators are not infallible. False signals can occur. However, the forex trader's skill is his ability to assess the signs he is given, interpret their relevance, and then execute an appropriate trading strategy to secure profits. Consistency is the overall objective.