Chart patterns as tactics, not strategy

A chart condition is not a market thesis

A 1995 reader argued that applying mathematical techniques to price history does not, by itself, identify the commercial forces that could determine later price direction. The argument drew a line between treating a price history and specifying the commercial forces that could determine later direction.

Double tops, bottoms, and triangles

The same reader argued that scanning charts for double tops and bottoms in order to infer later price direction belongs with short-horizon betting and with entry-or-exit tactics, not with strategy. In the terms used here, a double top and bottom is a repeated high or low in the price structure treated as a chart condition that can frame a trade hypothesis, not as proof of later direction.

The critique applied the same tactical, not strategic, judgment to converging triangles used to deduce future price direction. A triangle pattern is a converging price-structure condition used here as an example of a short-horizon entry or exit cue rather than a substitute for a market thesis.

Bands as mathematical treatment

That critique used a Bollinger-style band, together with other mathematical transforms of price, as an example of treatment that is unnecessary for interpreting commercial demand information. Bollinger Bands, in this dossier, are a quantitative envelope around price used as an example of mathematical price treatment, not as a validated forecast.

Strategy before tactics

The reader held that planted area, yield, usage, substitution among competing products, and seasonal equilibrium should be understood before any mathematical treatment of those factors. Supply and demand, in that argument, are the commercial factors that should be specified before any mathematical treatment of price.

Tactics are rules for entering or leaving a market after a thesis already exists. Strategy is a view of why price should move, grounded in supply, demand, substitution, and seasonal balance rather than in a chart shape alone.

The publication's reply

The publication replied that regular reporting of fundamental supply-and-demand factors lay outside its technical-analysis scope, while noting that many traders combine both approaches.