NOTE: This post was taken out from “behind the paywall” on December 20, 2022.

The realm of technical analysis is often presented in a way which is unnecessarily, and unhelpfully, complicated. The basic tenets around good charting focus on supply, demand, support, resistance, and trendlines. Using a very limited palette of tools, a skilled chartist can glean great insights from long-term charts about possible directions and their likelihood.

One interesting “twist” to the world of charting is using the same tools and techniques on ratio charts instead of standard charts with a single data series. Any given financial instrument can be divided by another, and although the resulting chart might be interesting, it might not be at all useful. For example, one could divide the price history of Apple (AAPL) on a daily basis for the past forty years by the price data for the commodity wheat over the same timespan, but as unrelated as those two things are, the resulting chart would likely be pointless.