The questions of if, how and why technical analysis works are hotly-contested among traders. Understandably, it may be hard to wrap your head around why patterns on a chart would dictate the price movement of shares of a billion-dollar company.

In a recent episode of “Mad Money,” CNBC analyst Jim Cramer gave his take on the power of chart patterns.

“You must consider [charts] as if they are footprints at a scene of a crime. These footprints trace out what big money managers might be doing with their buying and selling of stocks,” Cramer explained.

The idea is that the charts aren’t influencing share prices directly — they are simply a reflection of what traders are thinking. Once you can determine what other traders are thinking, you have the opportunity to get one step ahead of their next move. Many top traders use…

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