Over the years, Cramer has found that charts can help investors to break away from the pack and spot a move before it happens.
"I would consider looking at the chart of the stock you like as part of the homework, making it ingrained into your thinking," the "Mad Money" host said. (Tweet this)
Part of looking at the charts is being able to spot the bottom for the best entry points and ceilings for the best places to exit from a stock. When an investor buys a stock, they are betting from the start that the stock will go up. That means understanding the historical patterns of the charts and where it might be headed.
"As long as sellers overwhelm buyers with their dumping, no base can form. A climax is a sign that those potential sellers who had been holding on for some time are finally giving up en masse," Cramer said.
Read More Cramer: Spotting a bottom after a long decline
The most simple and reliable pattern out there is the dreaded head-and-shoulders pattern. Cramer learned not to ignore this pattern when his charitable trust bought Alcoa in the low teens in 2010, and ultimately took a blood bath because it was a really early buy.
Alcoa's stock had a healthy run from winter of 2010 until February 2011, rising to $17 from $13. The stock ran to $18 on the eve of its quarterly earnings report, and Cramer thought it was a fine quarter when it reported.
Yet what worried him was that even after an initial positive reaction, the stock dropped. So a few days later, Cramer assumed it would take out its $18 level and went back to buy more.
Cramer was wrong — extremely wrong.
At the end of the day, patterns matter. So when you see a head-and-shoulders pattern, no matter how confident in the stock you might be, Cramer believes you should sell. And when the reverse head-and-shoulders develops, then consider buying it.
Read MoreCramer: Yikes! Scariest pattern in the charts
So in situations when a stock's fundamentals give little insight into the direction it is headed, the technicals could light the way. Another chart type that Cramer relies on is called the cup and handle pattern. In fact, he has used the reliance of this pattern to stay in stocks that he might have otherwise sold.
A cup and handle pattern is one that resembles a cup with a handle. The cup creates a 'U' shape with a downward drifting handle.
Cramer learned the lesson of the beautiful cup and handle opportunity in the stock of Domino's. He was thinking about selling the stock, when chartist Ed Ponsi set him straight and told him not to.
Ponsi pointed out that Domino's had reached a pivotal moment and was getting ready to launch into a bigger move. Sure enough, Ponsi nailed it—and Domino's proceeded to double and then some. It turned out that while Cramer was nervous about the stock, it was actually consolidating and getting ready to power higher.
"Technicians and fundamentalists can co-exist. Make peace with them both, and I bet you will make a heck of a lot more money than if you are blind to one or the other and certainly to both," Cramer said.