chartist

Uche sells fabric at Balogun market, but by 6pm every day, he is a different person. He sits with his phone, squinting at a candlestick chart of Dangote Cement, drawing little lines with his finger and muttering about a pattern he calls a 'head and shoulders'. His wife thinks he is watching football highlights. He is actually trying to predict tomorrow's price using nothing but yesterday's price.

That is what a chartist does. They are not reading annual reports, checking how much debt a company owes, or asking whether the CEO is any good. They believe that price movement itself tells a story, that shapes and trends on a chart repeat themselves because human behaviour, fear and greed mostly, repeats itself.

This approach has a proper name, technical analysis, and chartists are its believers. They look at things like support levels, where a price tends to stop falling, and resistance levels, where it tends to stop rising. They watch for an uptrend, a series of higher highs that suggests momentum is building. Tools like the simple moving average or MACD help them smooth out the noise and spot when a trend might be turning.

Contrast this with someone in London who bought shares in a UK bank because they read the balance sheet and liked the dividend policy. That person is a fundamental analyst. A chartist in the same seat would not care much about the balance sheet at all. They would care that the share price just broke above a level it failed to cross three times last year, and treat that as a signal worth acting on.

Uche is not wrong to enjoy this. Plenty of professional traders use charts alongside company research, not instead of it. The danger is treating chart patterns as certainty rather than probability. Markets have surprised far more confident chartists than Uche before.