Here is a good example of what I always take great pains to accentuate in the charting classes, as follows; Say your broker suggested you should buy this stock, after the price had halved. With your (even elementary) charting knowledge it would be very simple to throw a trend line on that downtrend. You simply do not need to even consider buying this stock until at the very least, that down trend breaks. Pretty simple. Something that can save you money and stress.

Do note though, you should not even have down trending stocks in your watch list. Unless of course you are on the short sell side.