“Charts do not predict price.” – Peter Brandt
If charts don’t predict price, then why do we spend hundreds of hours marking them up, optimizing setups, and perfecting technical analysis—believing we can beat the market with it?
The truth is simple: technical analysis does not predict the future.
What it does is give us a structured way to observe and interpret the historic footprint of market behavior.
The Fundamental Truth
Price action is the result of millions of human decisions. In the short term, it is almost entirely driven by psychology—fear, greed, impatience, conviction.
Markets are not deterministic. If there’s a clear, repeatable edge, algorithms will arbitrage it away instantly. That’s why “bots” don’t magically print money in liquid markets.
The best lens we have for understanding markets is auction theory, described by James Dalton. It’s not everyone’s cup of tea—it can be abstract and complex—but internalizing its core principles gives you a huge edge.
The Only Two Questions That Matter
As traders, everything boils down to two questions:
1. What is price trying to do?
2. How successful is it in doing so?
Example: Price runs into a key level.
• If it breaks through effortlessly → that’s strength.
• If it struggles, churns, and fails → that’s weakness.
But until the market shows its hand, we know nothing. Acting before confirmation is just gambling.
The Real Approach
Stacey Burke’s mantra sums it up:
• Timing
• Levels
• Behavior of price
We must wait for the right time windows, when volume and manipulation hit the market.
We must map the levels everyone is watching, where reactions and reversals often occur.
And most importantly, we must sit back and observe behavior in real time.
Patience is everything.
The trader’s mindset is not prey but predator.
The predator knows what he is waiting for, hides in the shadows, and only strikes when the target is exposed. Acting too early means death.
So What Are We Actually Doing on the Chart?
In my view, all analysis falls into three categories:
1. Market Structure
The foundation.
We study past price action to see who is in profit, who is trapped, and where stops may be. This builds bias, target zones, and risk/reward context and especially potential setups.
Low predictive value by itself—but essential for context and setups.
Tools & concepts:
• Highs and lows
• Opening/closing prices
• Ranges and expansions
• TrendPredator (automates much of this for me)
2. Liquidity Zones
As Stacey says: “Train your eyes to look horizontally.”
By looking left, we see how price last interacted with a zone:
Did it consolidate? Reject violently? Gap through?
This gives conditional insight: If price gets there and does this, then…
Tools & concepts:
• TPO profiles
• Naked POCs
• Order blocks
• Value areas
• Single prints
3. Momentum
The only category with short-term predictive power.
Here we judge whether momentum suggests continuation, consolidation, or reversal.
But momentum is fragile—it only works in short time horizons, and only if the trader reads it neutrally and without bias.
Tools & concepts:
• VWAPs
• EMAs
• LTF patterns (pushes, triangles, fakeouts)
• My TrendPredator fakeout & OpenBox approach
The Final Step
When we use technical analysis with clarity—knowing what it is and what it is not—we stop fooling ourselves.
It’s not a crystal ball. It’s a very valuable and essential framework for structuring our observation and preparing perfectly for the only moment that matters:
The decision to enter or pass on a trade.
No tool, mentor, or indicator can make that decision for you. That’s the trader’s job.