The following may not apply to you, but I think you will understand where I am coming from.
I see many investors are involved in the search for that one elusive indicator that has been missed by the investors in the marketplace up to this point in time which will give them access to easy and unlimited wealth. Let me tell you that there is no such thing. Nothing can replace experience. Matter of fact, alot can be done with resistance lines, such as trend lines, horizontal support/resistance lines, and MAs. But I do not think many TAers put the time into learning how to make intelligent use of these basic tools. They would rather have thier computer chart a mathematically based indicator in hopes that it will give them the answer they are looking for. I do not believe in magic, do you??
Now, I wonder how manyTAs are aware of the following. In my work with TA, I have observed the following that is not documented in any book that I have read on TA. First, there can exist resistance lines that are at an angle to the current trend channel of a stock. You can tell be the way the price "bumps" up against these resistance lines before passing through them within the trend channel. I call them a "weak" form of a resistance line. I am sure the price action around this type of resistance line is more evident on a intraday chart. Further, if the price action of the stock breaks through its trend channel, these "weak" resistance lines can form a new trend channel for the price of the stock. Further still, the trend lines of the former trend channel can in the futture still impact the price of the stock. Further, if an unanticipated event occurs, like that previous NASDAQ market correction (which is still occuring at a more leasurly pace), even though this can drag the price of the stock down causing it to break down through a trend channel, the stock price can resume its action in the trend channel as though nothing happened except for the brief detour of the price outside and back into the trend channel.
I can go on, but if any of you are not aware of this type of price action concerning resistance lines, then I am suggesting that you will find alot more can be done with this type of TA tool, perhaps more than any particular indicator.
At the risk of being off topic, I would like to suggest a thread that reveals this type of information about TA through shared experiences. I think alot can be discovered here that is not to be found in any product or book.
Another proposal of mine is to discuss the use of the "Tom Demark" indicators in conjunction with the more standard TA tools. It would be interesting to find the TD indicators that can be replaced with existing TA indicators and tools. Perhaps we already have what we need as investors to make the realistic profits we are interested in? This will also allow us to understand the concepts behind the TD indicators an dallow us to utilize them in our more traditional tehnical analysis software and methods. Does Tom Demark reveal the algorithm behind his "new" indicators? Perhaps there is value to be found discussing the underlying formulas and testing them for ourselves. I do believe that the available indicators of TA do offer an ample pallette of tools to analyze stocks.
Any feedback or comments?
Still, IMO, a package for $695 on top of my basic TA software is rather steep, particularily since technical indicators have been proven to be not anywhere near entirely reliable for all stocks and all markets all of the time. I believe that some stocks responds to a particular indicator better than other stock issues. Some stock issues do not respond well to any indicator. At best, a stock will only perform much of the time correctly with its best indicator, but not anywhere close to all the time. Usually it takes multiple indicators to cover the price action of the stock. However, even this approach I have not found to be entirely reliable. It has its drawbacks. In the end, TA turns out to be the weighted preponderance of evidence that culminates in a decision which is largely based on experience. If I am wrong here, please offer me a conrtary viewpoint by sharing your experiences.
Boy, this may cause a little stir-up that is not intended by me. |
